Software Research and the Industry

In 2004, SugarCRM coined the term “commercial open source“. This term was intend to separate the commercially-oriented open source projects of venture-capital-backed startups from the then dominant community open source projects. The term was picked up quickly, by many. I (as well as others) define it the following way:

“A commercial open source firm is a software firm that provides most or all of its product as open source while maintaining the relicensing rights to the source code.” (Maintaining the rights has the purpose of being able to sell the product to customers under a commercial license.)

This type of software firm has quickly become important and stands to gain even more ground. According to Gartner Group:

“By 2012, at least 50% of direct commercial revenue attributed to open-source products or services will come from projects under a single vendor’s patronage.” From: Mark Driver. “Predicts 2009: The Evolving Open-Source Software Model.” Gartner Inc, 2009.

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Courtesy of SAP, here an English-language summary translation of the interview with Oliver Günther on micro-blogging and productivity.

Originally: “Das Microblogging kann die Produktivität durchaus steigern.” Computer Zeitung, June 15, 2009.

The integration of micro-blogging in corporations makes sense, concludes a project by SAP Research in Palo Alto and the Institute for Business Informatics at the Humboldt University in Berlin. In an interview, professor Oliver Günther says that a majority of the focus group that was interviewed in Silicon Valley regard micro-blogging as a collaboration tool that potentially enhances productivity. High potential is seen in the interaction between company and client, in advertising, public relations, and informal communications within a team. Possible applications could be in creative processes or just in the exchange of hints in the service team. Micro-blogging can substitute communication by e-mail or instant-messenger putting it on the micro-blogging platform which is an easy to use tool with broad distribution. However, micro-blogging is not regarded as suitable for every business or every department. It very much depends on the corporate culture: communicative corporate cultures such as in IT would profit. Conservative cultures such as in banking would have problems with integrating this communication channel into their culture. The same applies to the enhancement of productivity. In some cases it will lead to it, in others, micro-blogging only distracts. The communication channel exists and employees and clients expect management to address the right usage of it. Not just addressing and implementing the tool is necessary for making it a success but also management actively participating in it. Last but not least, the clarification of data privacy issues is of paramount importance for the acceptance of micro-blogging in a company.

Full article in German.

Oliver Günther, a co-author of our micro-blogging in the enterprise study and a Professor at prestigious Humboldt University (of Berlin, Germany), was interviewed by the German tech weekly “Computer Zeitung” on the subject matter. He re-iterated our main point that micro-blogging can improve productivity in enterprises (but also that more work needs to be done). Please see for yourself:

• Das Microblogging kann die Produktivität durchaus steigern (in German)
• Micro-blogging can increase productivity (translation courtesy of Google Translate)

If you’d like to know more you can meet me at the 2009 Theseus Symposium in Berlin, Germany, on June 30th this year, where I will be presenting our work on micro-blogging.

My AMCIS 2009 paper on the Commercial Open Source Business Model will be republished in an LNBIP (Lecture Notes in Business Information Processing) issue by Springer-Verlag. The reference is:

Dirk Riehle. “The Commercial Open Source Business Model.” In Value Creation in e-Business Management, LNBIP 36. Edited by M.L. Nelson et al. Springer-Verlag, 2009. Page 18–30.

If you feel like it, you can acquire a commercial license by purchasing the paper download from Springer. Alternatively, you can use the community edition linked to above.

Our ICSE 2009 NIER short paper on open source comment density had an accompanying poster presentation, provided here for ease of access. It conveniently summarizes some of our prior work. I hope it will be up soon on the ICSE 2009 NIER post-conference page.

If SlideShare fails you for some reason or another, here is the PDF file.

In software engineering, it is an old question whether you are “using” a component or whether you are “reusing” it. People tend to use these two terms interchangeably, annoying those among us who are trying to put precise meaning to terms. Alas, I don’t know of a good commonly accepted definition. I only know that “reuse” is an over-used term, mostly because “reusing” has more cache than “using”.

After reading some legal material, I’m wondering whether the copyright lawyers already solved this problem.

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I’m trying to create a pithy statement as to how commercial open source firms are superior to traditional (closed source) software development firms. For that, I need to define what the specific effects are that using an open source go-to-market strategy has on the bottom line. (If your answer is “it’s the community, naturally”—that’s not the intent of my question.) So far, I’ve been enumerating the benefits by business function, that is:

A commercial open source firm can

1. go to market faster
2. with a superior product
3. at lower overall costs, and
4. sell it more easily

than possible for traditional closed source competitors. I think that’s it: Faster, better, cheaper, and more easily.

As you can see, I’ve basically enumerated the various business functions as you might find them on a firm’s income statement. (1) and (2) address product management and engineering, (3) addresses pretty much all business functions, and (4) addresses marketing and sales. Anything that I should add? Rearrange things? Take a totally different perspective? Thanks for any thoughts you might have!

A couple of days ago, Red Hat filed a brief with the EPO (European Patent Office), arguing that patents hinder software innovation (as masterfully summarized by Glynn Moody). From Red Hat’s press release:

Today Red Hat took its efforts to confront the problem of software patents to new ground by filing a brief with the European Patent Office. The brief explains that software patents hinder software innovation, and that there is a sound legal basis not to expand availability of such patents in Europe.

I particularly liked that Red Hat uses Amit Deshpande’s and my work on the Total Growth of Open Source software as evidence of the significance of open source. An added bonus is that our little academic paper is referenced right next to the work of one of my heroes, Eric von Hippel’s Democratizing Innovation.

The good news is that I have tons of material to make an even stronger case for the economic significance and future impact of open source. The bad news is that time and resources are in short supply… but that will change eventually.

Author: Dirk Riehle

Abstract: Commercial open source software projects are open source software projects that are owned by a single firm that derives a direct and significant revenue stream from the software. Commercial open source at first glance represents an economic paradox: How can a firm earn money if it is making its product available for free as open source? This paper presents the core properties of commercial open source business models and discusses how they work. Using a commercial open source approach, firms can get to market faster with a superior product at lower cost than possible for traditional competitors. The paper shows how these benefits accrue from an engaged and self-supporting user community. Lacking any prior comprehensive reference, this paper is based on an analysis of public statements by practitioners of commercial open source. It forges the various anecdotes into a coherent description of revenue generation strategies and relevant business functions.

Reference: In Proceedings of the Fifteenth Americas Conference on Information Systems (AMCIS 2009), forthcoming.

Available as HTML or PDF file.

Authors: Oliver Günther, Hanna Krasnova, Dirk Riehle, Valentin Schönberg

Abstract: Despite a broad range of collaboration tools already available, enterprises continue to look for ways to improve internal and external communication. Micro-blogging is such a new communication channel with some considerable potential to improve intra-firm transparency and knowledge sharing. However, the adoption of such social software presents certain challenges to enterprises. Based on the results of four focus group sessions, we identified several new constructs to play an important role in the micro-blogging adoption decision. Examples include privacy concerns, communication benefits, perceptions regarding signal-to-noise ratio, as well codification effort. Integrating these findings with common views on technology acceptance, we formulate a model to predict the adoption of a micro-blogging system in the workspace. Our findings serve as an important guideline for managers seeking to realize the potential of micro-blogging in their company.

Reference: In Proceedings of the Fifteenth Americas Conference on Information Systems (AMCIS 2009), forthcoming.

Available as a PDF file.