Bruce Perens, a Senior Research Scientist at the George Washington University, has written quite the extensive piece on the economics of open source.

It’s not immediately obvious how Open Source[1] works economically. Probably the worst consequence of this lack of understanding is that many people don’t understand how Open Source could be economically sustainable, and some may even feel that its potential negative effect upon the proprietary software industry is an overall economic detriment. Fortunately, if you look more deeply into the economic function of software in general, it’s easy to establish that Open Source is both sustainable and of tremendous benefit to the overall economy.

I’m not going to lie — I didn’t read the whole thing (it’s freakin’ long). I did give it a decent scan, and it seemed to present good information including a comparison of software development models. It should be noted that this isn’t exactly an objective look at the open source paradigm as Perens is a co-founder of the Open Source Initiative.

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