The Economic Case for Open Source Foundations

Abstract: An open source foundation is a group of people and companies that has come together to jointly develop community open source software. Examples include the Apache Software Foundation, the Eclipse Foundation, and the Gnome Foundation. There are many reasons why software development firms join and support a foundation. One common economic motivation is to save costs in the development of the software by spreading them over the participating parties. However, this is just the beginning. Beyond sharing costs, participating firms can increase their revenue through the provision and increased sale of complementary products. Also, by establishing a successful open source platform, software firms can compete more effectively across technology stacks and thereby increase their addressable market. Not to be neglected, community open source software is a common good, creating increased general welfare and hence goodwill for the involved companies.

Reference: Dirk Riehle. “The Economic Case for Open Source Foundations.” IEEE Computer, vol. 43, no. 1 (January 2010). Page 86-90.

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