A Monopoly Creates Less Jobs

Chad Dickerson the Infoworld CTO has quite a ridiculous spin on why you should buy Microsoft. He says:

For most server tasks, Windows 2003 is a solid piece of software, but many Linux-savvy IT managers don’t want to shell out a few thousand dollars when Linux is free. Open Office users don’t want to pay a few hundred dollars for Microsoft Office, so they use the “good enough” open source office suite. IT managers make these kinds of decisions every day to save money, but it’s the same basic line of reasoning that drives American IT jobs offshore. The cost of running a business should be as low as possible, and any reduction in IT costs (including labor) helps the bottom line.

It's completely absurd argument. First of all, making Microsoft richer doesn't increase the amount of jobs for IT. Microsoft already makes $32B a year on only 50,000 employees. The 3,000 to 3,500 new jobs is a drop in the bucket in the overall economic picture. On top of that, the author fails to mention thousands of jobs lost when Microsoft opted to go offshore for other technical services.

Also, by making microsoft richer, someone else gets poorer, and it's usually that little software development company that can't afford the overhead of going offshore. Monopolies like Microsoft in fact reduce the amount of jobs in an economy, the lack of competition reduces redundancy and therefore leads to less jobs. If microsoft owned the entire software market just think how much total jobs there would be doing software product development in a world without competition.

The truth of the matter is, most people in IT do not work for a software product company. Open source tends to compete directly with only software companies, however it's not a zero sum game. Software companies continue to leverage open source to build even better products in shorter time. Furthermore, the playing field is leveled therefore creating more competition and therefore more jobs.

Open Source does reduce the cost for the majority of IT. However this deflationary effect affects everyone globally. So its net effect to the equation of job outflow is zero.

The only true threat of open source is that it can destroy viable markets. However, once a market dissappears, it doesn't make sense to move to a lower cost source. No sense in cost reduction when you can't make a dime. In short, no jobs moving offshore, it just disappears. However, obsolescense due to market forces is a reality in the software business.

In short, the arguments presented by Infoworld's CTO has no basis in logic. It's what's otherwise known as "spin". It's extremely dangerous "spin", in the disguise of "saving jobs" we only accelerate our demise.