An introduction to e-commerce and distributed applications
An introduction to e-commerce and distributed applications

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6.2.15 Free products and services

It might seem paradoxical to include sites which provide free products or services under the category of business models. Typical sites which come under this category include gaming sites where users can play computer games using their browser, sites which run free raffles and sites which offer free software.

Such sites do not earn any revenues from the products or services they offer; revenue is earned indirectly, for example by means of banner adverts or by receiving revenue from sites which you have to visit before experiencing a service or buying a product.

One of the largest free product areas is that of free software. Organisations in this area include those who raise revenues and those who do not. An example of a company in the former category is Red Hat. This is a company that provides free versions of the LINUX operating system (LINUX is a free variant of the venerable UNIX operating system). You can download LINUX from the Red Hat website and install it on your computer without paying a penny to the company. Red Hat raise their revenues through support, packaging distributions onto CDs and providing services to companies who employ LINUX for application development. Companies such as Red Hat are the analogue of those companies who sell a razor for little or no cost but make their profit from selling the razor blades.

There are a number of sites in the internet which do not make any money from issuing software. These are sites associated with Open Source development.

The Open Source movement

The Open Source movement is truly a child of the internet because it is only the Net that provides the communicational infrastructure to enable it to succeed. A typical Open Source project involves a number of programmers deciding to collaborate on the development of a useful piece of software. Initially the software might have been developed by one of them with some minimal set of functions. Over time the software is enhanced and undergoes a series of builds. The software is made available to the general programming community at no charge, including its source code. Other developers are free to modify the source code and release it. The Open Source movement has generated some very popular software systems which have gained a large number of adherents. The two most popular are LINUX and the Apache web server.

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