What killed the shrink-wrapped market was first piracy and secondly the way people use their computers change. Then add on the easy sharing that e.g. Google docs enables and it's all over but the shouting.
The SAAS model also has the benefit of aligning value delivery with outlays temporally. No more wait a year before shipping: instead get quick iteration with an ongoing revenue stream. You can recover from missteps in a way that the old model could not.
Not sure how to respond to that. Emacs is around, the latter two I believe not, but approximately nobody is using them anyway. And I say that as someone who lives in Emacs.
> OS vendors still make money despite Linux and FreeBSD.
Apple makes money on hardware. Microsoft makes money on cloud, and has been desperately trying to turn Windows into a subscription service for a while now. They even non-humorously said exactly this in some message in (IIRC) installer or update screen - I remember Windows 10 telling me "Windows is a service" as if that was a good thing.
> The GIMP didn't kill Adobe.
No, but again, GIMP and Krita are used by approximately no one, meanwhile Adobe switched to a quite abusive subscription model.
> And if you want to sell proprietary libraries your market is going to be limited because OSs will distribute them and it will be hard to keep up when customers are fixing their own problems.
I don't see how. Think about the 100 (or 10 000, if you're doing webdev) dependencies your product uses. Most of those could be a licensed product, creating a cottage industry of small vendors making a living from developing specialized libraries. This thing is real in some areas, e.g. industrial software, where there are e.g. protocols that are too complex and boring for Open Source community to care about supporting in full. But it's something impossible in general, because popularity of open source simply prevents this kind of market from forming.
Now, to be clear: I don't have a strong opinion on whether this is good or bad. Still trying to fully understand that one. But what I know for sure is that open source is a huge disruption to how the market would've worked otherwise.
> What killed the shrink-wrapped market was first piracy
I'm not convinced about that. Maybe video games had a problem, but money in software in general was in B2B, not B2C, and there the piracy was effectively mitigated by the legal system. In fact, both Microsoft and Adobe used piracy as opportunity because of that - kids would grow up using pirated copies of professional software, and then as adults, their companies and their employers would have to buy the properly licensed versions of that same software, because that's the only thing anyone has experience in using.
> The SAAS model also has the benefit of aligning value delivery with outlays temporally. No more wait a year before shipping: instead get quick iteration with an ongoing revenue stream. You can recover from missteps in a way that the old model could not.
SaaS has some benefits, but they tend to be single-sided, unless the customer and the vendor are comparable in power, which usually isn't the case. So while e.g. IBM or Microsoft can force Google or Adobe to behave, my small business will be taken advantage of by large SaaS vendors.
Computers always allowed you to copy code for free and any new concept that took six months to be made up, can be duplicated for free in one second.
The real problem is that you have to ship code that can be disassembled and read by another human being, to sell software. This fact annihlates any incentive and control an author-of-software has over their conceptual labor.
What we need is a method to sell a binary (and source-code) that are completely free of human-perceivable information AND authorized against a purchase server. Identify the code author or not, both are fine, what matters is the conceptual labor is protected.
That's it. We do that and it becomes viable to do hard mental work for a long time, and take risks on bold moves. Make the concept work and sell the baked end result without giving away the recipe.
Every other industry keeps the means of production to themselves.
But for some awful reason, programmers are expected/required to ship the means of production, the understanding of the code and the concepts of the code AND be ready to answer anything, in a relationship with the purchaser.
The balance of effort between software developers and the benefit everyone else gets from them, is completely messed up.
That sounds impossible in principle, not without taking away ownership of the machine from the user. I guess TPM + homomorphic encryption might allow this one day, but that doesn't feel like a win for society.
> But for some awful reason, programmers are expected/required to ship the means of production
Pedantic, perhaps, but I wouldn't classify code as "means of production". Dev tools and supporting tooling, maybe, which no one is required to ship.
I sort of agree with you're saying overall - you're pointing out the fundamental issue, open source is just something enabled by it. I focused on open source because, arguably, this reality of "messed up balance" was still manageable through the legal system, and it's the FLOSS becoming a cultural phenomenon in the industry that broke this.