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May 28, 2006

Fair trade Software Development

Filed under: Business,OpenSource,Process,Software — stephane @ 11:34 pm

With the abuse of the opensource model by most IT companies, the huge failure rate of software projects and the low rate of software engineers. It has been decided to create a new standard based on the Fair trade principles.

Software engineers employed by affiliated companies will have long-term minimum rate considerably above the long-run average market rate based on the incomes needed to support community projects such as opensource projects. Companies that are certified to meet the standard may for a fee display the appropriate Fairtrade and opensource symbols on their marketing and business documents. (The fee supports the work of the national monitoring body)

Although Fair trade software services are typically somewhat higher-priced than equivalent non-Fairtrade software services, for many services the difference is relatively small (as long as sufficient volumes are involved). This is because although a considerable premium may be paid to software engineers (often 50-100% above market rate), this forms only a small part of the final project price; The Standish Groups reports that most of the price is determined by invalid requirements, unclear business objectives, poor management decisions, unproper planning, lack of executive support and NIH/reinvent-the-wheel syndrom.

Fair trade is incentive-based and rely on consumer choice. Consumers are therefore given the opportunity to increase standard of living and quality of living and quality of life of software engineers working on opensource products through a sustainable market-oriented approach.

Considering the huge success of fair trade goods over the world[1], it is considered that this model could be financially viable. However we suspect that so-called ‘opensource IT companies’ that have been surfing on the opensource wave and indirectly lurring consumers into such a similar idea of fair trade and extorquing huge rates to consumers (including governments) without actually contributing back to community projects may have already doomed such model by losing the thrust and confidence of customers and making them believe that opensource does not work.


[1] See Communication of the European Commission on fair trade

A EUROBAROMETER survey, conducted on behalf the European commission in 1997 reported that 74% of the EU population say they would buy fair trade bananas if they were available in the shops alongside “standard” bananas. A total of 37% of EU consumers said they would be prepared to pay a premium of 10% above the price of normal bananas for bananas of equivalent quality produced according to fair trade standards.

Further analysis of the survey replies revealed that people with previous experience of fair trade products are much more likely to buy fair trade bananas, and would be willing to pay more for them. More than 9 out of 10 (93%) of consumers who had already bought fair trade goods would be prepared to buy fair trade bananas, and 7 out of 10 (70%) would pay a premium of at least 10% over the price of normal bananas.

PS: This stuff is a joke and was devised by myself after a few glasses of Champagne over lunch with a group of friends. Still I believe there is some truth in it. 😉

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