[Interest] Digia to acquire Qt from Nokia

Thiago Macieira thiago.macieira at intel.com
Thu Aug 16 14:00:28 CEST 2012

On quinta-feira, 16 de agosto de 2012 07.12.23, Atlant Schmidt wrote:
>   Please don't distort my argument. My argument, boiled down,
>   is that switching to any open-source licensing approach
>   destroys the owner's direct value in a software property.
>   I don't argue whether that's GPL, LGPL, or the actually-
>   free licenses.

We are arguing that this argument is wrong.

You've taken one of many definitions of value: future cash flow from licensing 
revenue. And even with *that* definition, using a freer license may increase 
the licensing revenue, since the market expands.

That did happen for Qt, so it's not theoretical.

Just think of another analogy: elasticity. If I have a product that costs P 
and I sell it Q times, my revenue is Q * P. If my product demand is inelastic, 
if I lower the price by ΔP, then my revenue will be reduced by Q * ΔP. That's 
a bad decision.

However, if my product is relatively elastic, a decrease in price of ΔP will 
cause an increase of unit sales of ΔQ such that the total revenue 
	(Q+ΔQ) * (P-ΔP) > Q * P

With most goods and services, demand is relatively elastic. Remember when HP 
decided to dump the TouchPad stock by lowering the price to $99?

In Qt's case, you have to think of it like this: out of a population of N 
total users, a fraction x (0 < x < y; for example, x = 0.1 means 10% of the 
users buy licenses) of them will choose to buy the commercial license. That's 
Q = N * x. My revenue is Q * P = N * x * P.

If I choose a freer license for the Open Source version, then the fraction of 
people who will choose the commercial license will reduce by a factor of y 
(with 0 < y < 1; for example y = 0.6 means 40% of commercial licensees 
switched to Open Source and 60% stuck with commercial). 

However, at the same time, the population of total users increases by a factor 
of z (z > 1). That means Q' = N * z * x * y. Since the price P didn't change, 
let's focus only on Q.

This is a good deal if
	Q' > Q
	N * z * x * y > N * x
	z * y > 1

Remember what Chuck said: the market was on its way to a 10x expansion (z = 
10). That means any retaining anything above 10% (y = 0.1) of the original 
licensees means that the value of the asset actually increased, by *your* 

Thiago Macieira - thiago.macieira (AT) intel.com
  Software Architect - Intel Open Source Technology Center
     Intel Sweden AB - Registration Number: 556189-6027
     Knarrarnäsgatan 15, 164 40 Kista, Stockholm, Sweden
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