All right, welcome to a short talk on open source software and public policy.

What you or what a country can do to help its economy in particular, but not exclusively

through the use or support of open source software.

My name is Dirk Riele.

I'm a professor of computer science at Friedrich Alexander University of Erlangen, Nuremberg.

I'm a professor in the computer science department.

I focus on software engineering, building large systems, and have a particular focus

on open source software.

We look at that not just from a technical perspective, but also from an economic perspective.

I can do that because I long worked in industry for many years before I became a professor

about 10 years ago.

So as you are well aware, digitalization is in everyone's thoughts.

This guy, a Silicon Valley egghead, self-proclaimed egghead Marc Andreessen, put it succinctly

in 2011 by saying software is eating the world.

By that, in my interpretation, he meant that software is the driving force in digitalization

and everything is getting digitized, meaning all products in one form or another, all business

models for all products, have to incorporate software.

There's almost no product left that does not incorporate software and thereby has to deal

with it.

In addition, software is an ever-expanding frontier of new software-only products and

business models built around it, and that is how software is eating the world.

To this, I would like to add that the first derivative is often ignored.

Software itself has such a high innovation speed that people are changing existing product

architectures to incorporate more software because in software with techniques of so-called

techniques of so-called continuous delivery, you can turn the economic value, you can turn

the actual work, the labor of programming something into the economic value it generates

as part of a product out there in minutes, if not seconds.

So this really is a game changer for products.

Now we all know who benefits from it.

These are the largest companies in the world, according to Wikipedia, first quarter of the

last four years.

And you can see that the largest companies in the world are all American, and they are

also all software companies, almost exclusively software companies, multiple additional services,

but software therefore is, it's not only that it's American companies, it's also that it's

software companies who are the richest and most highly valued companies by stock market

capitalization who are leading this.

So how does this come about?

Well, it comes about because of the high profits that the software industry can acquire by

being in every product and by generating something called vendor lock-in.

Vendor lock-in occurs if you depend on the products of a particular vendor because it's

an important product component for you, and the switching costs to an alternative solution

are so high that you're just not doing it, or that if you were to do it, it would just

cost you dearly.

In the extreme case, you can't switch because there's only one solution owned by a monopolist.

In the classic case in the 90s, this used to be Microsoft Windows, there was software

vendor lock-in into Microsoft Windows because you could almost not do something else but

buy from Microsoft by Windows.

The consequences of vendor lock-in are dire.

First of all, if it's close to a monopoly or a monopoly, the license fees will explode.

Why?