"...may even translate through to the vendors that develop, sell and support open source, since rather than sheer economic value, their open source software and development projects and communities, including developers and users, represent potential innovation and opportunity, rather than money in the bank, which at this point has diminished value."
The value of FLOSS for NGO's isn't necessarily the reduced cost, instead it's the involvement of the community in the core of their organizations mission. The tools that help you serve the community are best when they are created by the community itself.
This economic downturn may result in NGO's flocking to FLOSS because they think it is an inferior good like the classic economic example of the potato. The idea behind inferior goods is that when times are good and there is disposable income, people will demand and buy fewer of these items. Potatoes, interstate bus service, and ramen noodles are good examples of inferior goods. When incomes decrease or people expect their incomes to decrease, the consumption of these items increases relative to previous consumption.
FLOSS, with the perceived high learning curve to adopt it, is viewed as an inferior good. Many large NGO's do not use FLOSS because of the percieved opportunity costs of engaging an open source community around their organization. Traditional software procurement policies also inhibit the creation of open source communities. (see FLOSS myths debunked here)
The economic downturn, with the resultant and harsher impact on the NGO community, may force NGO's to take a harder look at FLOSS to achieve objectives with a smaller budget. If the NGO's decide to start up and maintain an open source community, they might find themselves not only with cheaper software, but a broader and more engaged volunteer base.
Don't be surprised if FLOSS is a normal good in an inferior goods clothing.
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