Why do companies prefer proprietary products to GPL products?

I do understand why companies often prefer BSD and Apache products to the GPL.  But what I don't understand is why companies prefer proprietary over GPL.  Let me emphasize, I'm talking about a product that is not related directly to core business secrets such as content management or a database.  

The first reaction is, "with the GPL, we must make our changes publicly available."  But I would ask, how is that different than a proprietary product, at least in a negative way?  For instance, if we spend $100,000 on an IBM product, we have directly or indirectly paid for the development of that product.  If we pay for IBM to enhance that product, we have directly paid for the development of features we find valuable.  IBM will continue to sell that product to anyone that will pay, including our competitors.

If there is a competing GPL product that would require $50,000 to customize, and $50,000 in ongoing support (let's choose numbers that take cost out of the equation), most companies will take the proprietary route every time.  

In the GPL case, you've spent $50,000 on features you find valuable.  Indeed your competitors can now use that product and those features, but they can in the proprietary route.

There are additional benefits to the GPL products that seem to get overlooked.  We have full access to the source code.  We usually have a community full of examples and solutions to any problems we may encounter, which are only a Google search away.

Even fiscally, there are benefits.  We received a big chunk of value for free to start out with.  In the future we will, for free, be "paid back" in contributions from other parties.  For instance, other parties may fix bugs in code that we contributed.  Other parties may add features that we can now use (without the upgrade charge of the competing proprietary product).  Also, contributions to an open source product can earn us good publicity and good-will among developers.

Further, I would suggest, contributing to GPL will help in technical recruiting.  I believe many of the best software engineers are more likely to work for a company that uses and participates in open source software.

The reason companies stick with proprietary products, I suspect, is comfort.  We are comfortable buying products from vendors.  We know it, and we understand it.  The new world is a frightening place because we aren't as familiar with it as the old world. 

  1. JohnMc (not verified)
    Sun, 08/23/2009 - 3:52pm
    Martin, I think you touch some points that are valid, but you miss the biggest point of all -- risk. Look business, especially big business, second to a profit, wishes to mitigate risk. It is no different in the IT arena. Pawning risk off trumps everything else, even product superiority in the end. So the game that is usually played goes likes this -- * I can get a FOSS product and use it or buy a closed product. Do both provide support? If the FOSS product does not its out the door. * If I can get support for the FOSS product vs closed product, is the firm willing to assume some of my risk? By that I mean but not limited to -- if the product fails, cover me from loss, protect me from litigation if there is an IP challenge, has a track record that they will be around for years to come, etc. * If after that FOSS is still standing vs closed, who will provide me the deepest level of risk mitigation? The better man wins in that regard. This fact is why both Microsoft and Red Hat are successful. They are willing to enter into risk avoidance schema to get the business. Most other firms, FOSS or closed, are not. A positive case in point. During the SCO legal battles, they were suing everyone they could about Linux patents. HP on the behest of their customers flat out told them that they had the umbrella of HP against any IP claims in the use of Linux in their product line up. It was critical to HP to foster that perception as they were head long in an effort to get a % of their customer base off HP-UX and onto Linux. HP absorbed the risk. Risk avoidance is king in the Fortune 5000. I have negotiated 100s of IT products for a fortune 10 telco. Risk mitigation was always 50% of the equation.
  2. dmartin
    Sun, 08/23/2009 - 5:10pm

    You may be right, this may be another reason.  I think risk avoidance is over-emphasized.  Fearful companies pass up big opportunities due to doubt and uncertainty, even when the risk is extremely low.  Even the example you bring up, SCO was ultimately found baseless.

    The right way to look at it is the way Google does.  Google has a policy that they aren't going to avoid doing things just for fear of litigation.  They know, in the long run, they have more to gain than the risk. 

    I also think proprietary protection is over emphasized.  They've passed that cost to the customer.  There are plenty of insurance companies willing to sell idemnification, and I would be willing to bet the cost is less (though, I admit, I don't know for sure).

    It's safe to live life with our heads buried in the sand, but to get ahead we've got to bring it out and expose it to some risk.  I suspect if you did break down the real numbers of FOSS product usage versus tangible financial losses, the numbers would be extremely small.

  3. Anonymous (not verified)
    Sun, 08/23/2009 - 5:15pm
    Why do companies use the threat of using Linux/OpenSoftware to get better deals from M$ and others. Rhetorical.
  4. lefty.crupps (not verified)
    Mon, 08/24/2009 - 6:22am
    Further, I would suggest, contributing to GPL will help in technical recruiting. I believe many of the best software engineers are more likely to work for a company that uses and participates in open source software.
    If a technical user is concerned at all about the GPL, that user would be more likely to work for a company that uses, and understands, Free Software. Free Software is a license thing, Open Source is a development model.
  5. Why doesn't your blogs formatting allow for new lines, nor linebreak 'br' html tags? Very difficult to format a comment!
  • Anonymous (not verified)
    Mon, 08/24/2009 - 8:34am
    It is all about Money. Using FOSS software saves money. But that may not be the goal of our Government and company. They care what is going to be the next year/period budget. If they use FOSS software, yes, it saves money, but they also lose what management values the most --- budget. Isn't this one of big factor how our government/companies gets us in financial trouble -- never thing of saving, but spending.
  • Anonymous (not verified)
    Thu, 08/27/2009 - 7:26am
    Those costs also count for proprietary software. And this seems a very good problem you point out there.
  • Anonymous (not verified)
    Tue, 09/01/2009 - 6:37pm
    Another important reason may be ignorance:
    The first reaction is, "with the GPL, we must make our changes publicly available." ...
    That is only true if they distribute their modified version of the software. The GPL requires that if you distribute a program in some way, you must make the source available to recipients. Remember: freedom 0 is to use the program as you wish, if you don't wish to give away your precious enhancements you don't have to (it'd be nicer if you did though).
    It's another case if the software is licensed under AGPL and it directly interfaces with users while running on your servers; then you have to provide the source as well.
    Cheers, Anonymous.
  • The Mad Hatter (not verified)
    Sun, 09/06/2009 - 12:23pm
    And then there's the IT people who know Windows, nothing but Windows, and don't want to learn. I know several of them. They think that Windows is a good investment because they know what to do with it, and even if a Linux system would be more reliable, they wouldn't even know how to set it up, and they don't want to learn.