The Modern Issue With Free Software
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Note: I love free software, and this is an issue with how a lot of how modern tech runs more than an issue with free software directly.
The Past
Back in the day the biggest issues with software were that it was expensive and proprietary. People could easily come in, make a libre1 word processor, and then have it released with few issues (except for maybe issues that would trigger anti-trust lawsuits). The actual creation of the software didn't require much more than what was needed to run the software, and if the maintainer decided to stop maintaining the package all that would need to be kept up was a website where someone could download the software, something that could just be done out of your closet with a PC set up as a dedicated server. Only ongoing costs being the electricity to run it, and any maintenance.
The Present
Nowadays it's not quite the same. Free software can't replace much of what proprietary software is doing, because it now requires hardware on the backend. It's hard for someone who's producing free software to make SaaS and still have it be free on their own. This issue gets worked around with the idea of self-hosting, which I'm a fan of (see: this blog existing and me hosting it on hardware I'm leasing, but more on that later), however it's not a general-purpose solution for a few reasons.
Reason the First: Desire and Time
A lot of people are put off the moment they have to do anything besides install a piece of software on their PC. I'm not here to demean these people, as not everyone wants to dedicate their time to learning how to use software, which is entirely valid. This reason, however, is the shortest to explain.
Reason the Second: Hardware Leasing
Hardware leasing ain't exactly cheap. For cloud storage it's not too bad, you can get an object storage bucket to host downloads on for like $5/mo starting, but that's essentially just an internet-based hard drive. If you need to do anything complicated, like serving a word processor, or email, or anything else that requires server-side calculation, you need servers. These do start cheap, but the use is limited, especially when we're talking about the files of dozens of users. The cost for that alone will be prohibitive for most developers, who really just wanted to make their own cloud-hosted word processor so they didn't need to become a product2.
Reason the Third: Internet Service Providers
Note: I live in the states, so this may not be an issue elsewhere.
Where I live there isn't much choice in terms of ISP. Generally any address will have one provider. This is an issue more generally, but for this it's also an issue because if your ISP won't let you forward a port you can't host things on your own hardware either. With IPv6 this might be less of an issue (I've read that every device gets a public IPv6 address that can be accessed from the outside), but you also run into the issue where in the terms of service for both major US providers you can't host your own web server.
The usual response to this is "They don't care for small-time services", and while true, you can still get your internet cut off for hosting a friends & family Minecraft server on paper, which means it could happen with anything. The wording's generic on those, and it applies to any kind of inbound traffic.
Final notes
While it's not exactly a necessity to have every service be always-online, it's becoming more of an expectation due to things like Google. I largely don't use online services for word processing (I use Emacs, LaTeX, and LibreOffice), but it's still kind of frustrating that if I wanted to (and many do), I couldn't feasibly host, say, an OnlyOffice server out of my house that I could access from the local grocery store. My solution for this is object storage and plain text, which works for my usecase of reading outside of the house when I don't have a PC, but that's not everyone's usecase.
Footnotes:
Libre: Free as in freedom, not free beer
User-as-product isn't a new philosophy, but generally with services like Google you're the product being sold to advertisers.
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