Extinct Linux Distros...Is GNU/Linux Headed to Extinction?

As I was checking about 10 Linux Distros that are now gone, I noticed a pattern (at least on the ones I checked...there are many more that have been discontinued): Most of them had price tags attached. With the exception of Feather Linux (United Kingdom), Arabbix (United Arab Emirates), and Linux Loco (Argentina), the other discontinued Linux distros I happened to check had prices that went from $14 (Spanish Aslinux) to $100 (Canadian Xandros).

Again, I don't claim this is a valid sample to draw conclusions, but it still made me think, especially seeing that Linux companies are experiencing hard times (Mandriva, in spite of having such a fine distro, has experienced financial woes that made its community wonder about the company's future). Of course, Canonical is an exception but it is backed-up by a billionaire.

So, does that mean that attaching a price tag to Linux will kill Linux? Do Linux users see GNU/Linux as free software (free as in freedom and free as in speech) and thus will never pay a cent for it? Is building a business model around Linux then impossible? Stretching the idea a bit further...The lack of success of business models around Linux and the unwillingness of Linux users to pay will ultimately lead Linux towards extinction? 3 of the discontinued Linux distros were free and still they were gone.

I guess Ballmer would answer "YES!" to all those questions and probably he would elaborate a bit more on how open source is an unsustainable economic model and a threat to programmers...

However, a few details need further consideration:

1. Is it true that Linux users do not pay for software (and never will)?

This implies that Linux users are cheap. They love leeching poor software writers and give nothing in return while Windows users faithfully reward Microsoft for a job well done. Well...I'm not so sure about that. I know of a Mandriva user who gladly paid for his Mandriva Powerpack instead of giving that money to Microsoft. I'm also on my way to pay for Mepis Linux. Even so, this is not strong enough. How about an interesting observation made by an Ubuntu user concerning how much Windows, Mac, and Linux users paid for 5 games? The users had the freedom to choose how much to pay for the bundle of 5 games. According to his observation,

1) Current intake across Win, Mac, and Linux - $1,173,536 (which is just cool in and of itself)
2) Windows has the largest market share (no surprise there), with 86670 purchases.
3) Linux is the smallest number of purchases, with 21873 purchases, but that is only 8153 purchases, less than the Mac platform - 30026
4) The big news here is that Linux people paid more on average than either Mac, or Windows users.
Win: $8.06,Mac: $10.23, Linux: $14.53
So much so, that the total income from Linux users, outstrips that of Mac, even though Mac had more purchases (Mac: $307172.75, Linux: $317846.61)

So, the idea that Linux users don't want to pay for software may not be so accurate after all. What about the one saying that Windows users gladly pay for software? Windows gamers were the cheapest ones in the example above. Besides, Windows users pay for their OS because they have no option: You pay for Windows when you buy your computer. If Windows didn't come with the computer, will you buy that OS, even if there were cheaper options? Yes, you say? Then, I wonder why Microsoft pushed its anti-piracy interests into the law, which led to a market full of computers with Windows preloaded. And even so, there are lots of cracks and loaders available for Windows! Doesn't that mean that many Windows users don't want to pay? No? Then why is it that Microsoft created their infamous update for Microsoft Windows KB971033 (the one that "calls home" to check if your Windows system is genuine)? If illegal Windows copies were just a few, Microsoft wouldn't care.

2. Is it true that Linux will cease to exist when companies backing it up sink?

This one made me worry. If Canonical, Mandriva, Mepis LLC and all the other companies around Linux fade away, then Linux will say good-bye, too...
Not quite. Ganesh Prasad, in his article "Open Source-onomics:Examining some pseudo-economic arguments about Open Source," offers a description of the whole situation from the point of view of economics. The article is long, but it is worth reading indeed. I thought it would be discouraging news, but actually it is not. He stated that:

That's simply not the case with Linux. If Novell closes down, that pretty much means the end of Netware, unless another company sees fit to buy the product and keep it alive (On the other hand, Microsoft may simply choose to buy Netware and kill it!). Such things can't happen to Linux. As an Open Source operating system, Linux is teflon-coated against the commercial failures of the companies that try to build business models around it. Commercial entities are Johnnies-come-lately to Linux anyway. Linux managed without them for years, and will continue to exist even if they should all disappear. In fact, companies that claim to support Linux are wrong -- Linux supports them!

Some may say all that is pure theory but doesn't apply to real life. In real life, if a company fades away, so do its products. But again, open source is a rebel. Mandriva had financial woes and laid off a lot of their employees...what happened? Mandriva has managed to stay afloat now..but even if it hadn't, Mandriva Linux will keep alive in Mageia, a distro made by former Mandriva employees and supporters. OpenOffice.org might be closed down by the new buyer company? LibreOffice arrives. As far as individuals writing free software keep their spirits high, open source will keep on living.

3. Is it true that building a business model around Linux means financial failure?

Again, Ganesh Prasad elaborates on the subject from the point of view of economics. He says that those who say "Not paying for software will kill the economy" are just trying to make consumers worry about the global economy, but in a REAL market scene, consumers worry about the product that best fits their needs, not about the economy when they buy:

A generation of suppliers is threatened, and they try to convince the rest that society as a whole is threatened. If history is any guide, consumers will make the decisions that suit their immediate interests, and vendors will have no choice but to adapt as best as they can. Those decisions may decimate them, but civilisation will survive, as it always has. L'Etat, c'est moi.

So, according to the author, what happens is that open source is changing the economic paradigm surrounding the software industry. Software companies don't like it and are fighting hard to keep the traditional model--and their traditional revenues, of course. See Windows 7 Starter, for example. It is a way to force users to pay for a more expensive version of their software (I don't call that an upgrade, sorry if you think it is!) For building a business model around Linux, companies first need to realize Linux behaves differently in economic terms.

Then, those Linux companies that faded away with the distros they promoted might have disappeared because they were trying to play using the rules of a traditional business model which Linux doesn't fully support.