Keep in mind that, at this point, microsoft was pretty much nothing...

Here was a guy that built something with the intent to sell it, and people said "too bad". Of course he was upset about that.

Now, should he have been philanthropic enough to have just given it away to the community? Maybe, but it doesn't really matter...he coded it, and he did so thinking he would be able to sell it.

I equate those that copied BASIC then to the people that use adblock now. No, they're not really harming the author, but it is a bit discourteous. I think he was just trying to illustrate that "C'mon, guys...I worked really hard on this...I'm not suing you, but just please buy it instead :)"

If you're going to put something out there, free or otherwise, it's your problem to make sure that it's fit for my purpose.

If someone builds a website and puts it out there with advertising, they're saying "Hey everyone, feel free to enjoy what I've built without paying me for it, because I've got these other guys paying for it. Just look at the ads and click on them if you find them interesting, ok?" When you come along with AdBlock, you're making use of the website without allowing the author's arrangement with the advertisers to work. Ultimately, the advertisers will stop paying, and the website must either disappear or become paid-subscription only.

Of course, most people don't like ads, and the more obnoxious they are the more we dislike them and want to block them. But I think we'd like Xanadu less, where every website would have micropayments required to view it. I know that I'd rather put up with ads, especially the less obtrusive ones.

Now, this is practically a prerequisite for getting a job at a good company.

That's great--a perfect way to filter out companies that I would never want to work for.

Which companies? Why do you think they do?

This statement also sounds much more ironic from today's perspective, when there are thousands of open source projects that literally run off this concept.

What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free for a living?

That said, there really are very few people alive who haven't gotten mad and made an ass of themselves at some point, so we should probably forgive this "Open Letter to Hobbyists".

(I saw Gates talk when we opened a new building on Campus and someone asked him about the huge piracy rates in China so he brought up this letter in particular and said he's since learned to not get bent out of shape about it)

I once calculated my per hour wage from the work I did. About $1.50

Hang in there Bill!

Meanwhile the 'hobbyists' slowly grew in numbers until they outnumbered the 'professionals' (and plenty of them were professionals during the day and 'hobbyists' in the evenings and weekends). And then the web happened, and Microsoft blinked and open source took it and ran with it.

And now, because of that they're facing the first real competition since their inception.

Google would not have happened if it hadn't been for linux, and Sun and SGI would still be in business as well.

The world is changing, rapidly. Let's hope it changes fast enough.

"On, May 26, 1995, Bill Gates sent the "Internet Tidal Wave" memorandum to Microsoft executives. The memo described Netscape with their Netscape Navigator as a "new competitor 'born' on the Internet." The memo outlines Microsoft's failure to grasp the Internet's importance, and in it Gates assigns "the Internet this highest level of importance" from then on."

Read it for yourself at:

http://www.usdoj.gov/atr/cases/exhibits/20.pdf

That's an exhibit from the lawsuit, which came much later.

I argue that 1998 was the key year. Here are some highlights. In Feb the term Open Source was created. In April Netscape open sourced Mozilla. In May the Microsoft antitrust case began. In June IBM announced support for Apache. In July both Oracle and Informix announced support for Linux. And in the same month we got the first truly mainstream press coverage of Linux that I'm aware of, Forbes Magazine ran Linus on the cover, and had a good article discussing open source. (Wonderful goodwill that they later destroyed with their horrible SCO reporting.)

I submit that had the lawsuit not started in May, then we would not have had the big announcements from Informix, Oracle and IBM. And during that explosion we would have seen dirty tricks from Microsoft to leverage their browser market into controlling the server as well.

Of course, it's precisely their habit of using dirty tricks to force their way into new markets that got them into legal trouble in the first place, so there you go.

On the other hand, Microsoft can do excellent work when faced with real competition, so in a counterfactual world where they never abused their monopoly position they may have won the browser and server markets anyway.

That said, I don't know what would have happened without the monopoly abuse. Open source makes enough sense that it could have done well. However the meteoric rise in open source happened in large part because the whole industry was willing to do anything to make Microsoft lose. That is why everyone jumped on open source the second it became clear that Microsoft would be unable to retaliate for a bit.

Therefore I suspect that open source would have eventually succeeded, but not as fast, and likely not in webserving.

The fact that 'open source' got named in 1998 gave it a lot of publicity, but Linux and a whole bunch of other stuff would not have existed in their current form if not for the 1989 version of the GPL.

Open source/Free Software was a movement long before it had a name. MS took too long to take it serious, and the effect that universal net access would have on accelerating open source was very large.

I completely agree that the foundations were laid long before 1998. I'm sure we can both name lots of milestones. You cite 1989 for the GPL v1. I could cite 1985 for the invention of the patch utility and the writing of the GNU manifesto. You could cite 1978 for the first release of BSD. And so it goes. Open source software could not have had the breakout year it did in 1998 without being well along a path to success before then.

However I believe that 1998 was the critical year for the widespread acceptance and adoption of open source technology in the web industry. And a critical enabler for that was the fact that Microsoft got slapped with the anti-trust lawsuit, following which all of the major competitors realized that they had a limited time window to take down Microsoft, and therefore all jumped on the open source bandwagon. Do you remember how much it changed the game to have IBM and Oracle putting their reputation behind Linux and Apache? Obviously Microsoft was fully aware at that point that open source was a huge threat, however they couldn't jump on it because their hands were tied by the lawsuit.

Without the lawsuit the major vendors wouldn't have dared to get behind open source. That would have slowed adoption and acceptance significantly. Furthermore Microsoft would have been free use their control of the client to leverage control of the server. Which they were already starting to do, and which they had done to very good effect against Novell earlier. Could they have succeeded? I sure wouldn't have wanted to bet against them!

Thus I think that Microsoft's blinking at the lawsuit in 1998 was more important for the success of open source on the web than their missing the web before 1995.

Sun is still in business. They're just owned by another company now.

If you believe anything out of the BSA, last year was a record year with more than $50 billion in software piracy: http://global.bsa.org/globalpiracy2008/index.html

That letter probably didn't increase sales.

But this guy and his company managed to hang around making revenues until they were approached as a partner by some large company that knew how to get customers to pay through their noses.

He acknowledges that it wasn't universally stolen: the income was approximately $2/hr. If it was universally stolen, the income would have been $0/hr. But what he was missing was that it was universally wanted, there was a demand for it. This means he didn't set a price that the market was willing or able to bear, and the market told him the price that it was willing to bear. One way to adjust prices in the face of piracy is to take the total income divided by the total number of users (this is an iterative process, because this might not be immediately measurable). Considering what people had to go through to obtain copies on the Altair (making copies of paper tapes), the price set ($500 for the standalone version according to http://en.wikipedia.org/wiki/Open_Letter_to_Hobbyists ; approx $1900 in 2009 dollars) was way too high considering the effort of copying. At some lower price point, the effort of copying is too much for the price set.

While it's nice to be able set whatever price you want and think you're going to get it, that isn't the case. And banking on being able to sell at some arbitrary price is folly. Because you'd be in the same situation if the people DIDN'T even bother to copy it in the first place, the only difference is that you get to complain that people are using it without paying.

Charging $500 for something that is in high demand and is easily copyable, well, that's a huge mistake. The market is telling you there is interest, but you're not meeting the buyers, so they subvert you. And while it's unfortunate that all this effort and money and time was expended up front and now the bill comes due for, setting the wrong price, which discourages sales and encourages piracy, is bad market research. And Microsoft changed in that regard too, for a long time now Microsoft has been known for its marketing juggernaut.

Not sure if I am remembering my history correctly.