Why companies don’t always freeride on open source projects

I presented on open source foundations earlier this week to economist friends at TU Munich. I naturally got the question about freeriding: Why does anyone contribute to open source projects, if they could do something else with their time? The cinch: This time we are talking about companies, not invididual people, so the arguments about altruism and signaling don’t apply. So, why do companies contribute and don’t just freeride? I don’t think this question has been answered well yet in economics, and I’m not sure established theory has a ready answer.

To make it short: I believe the most direct reason why companies contribute to open source projects is to lower their cost of consumption of that very project. Specifically, contributing to a project builds competence in that project, and employing committers builds additional foresight and influence. General compentence makes the company use the software more effectively, avoiding costly bugs and rework. Foresight and influence helps the company avoid misalignment of their products with the evolving open source software they depend on. Such misalignment can also lead to costly rework and missed market opportunities.

I’m not aware of any RoI model that helps an engineering manager determine how much to contribute to achieve how much lower consumption costs and risks. Because of the step function from contributor to committer status for the involved employees, the investment return is not a linear function, that much we can say. The rest remains imperfect science for now.

High-tech and the rights to your body

A friend’s post alerted me to the potential overreach of copyright and commercial law when it comes to the human body. The particular post was about tattoo artists who tried to make money of sport professionals who had integrated the tattoos into their professional persona: The company who had bought the tattoo artists’ designs claims that the copyright to the art extends to the performances of professionals showing the art. Hence they wanted money for any performance, here as part of the professionals appearing in video games.

It is easy to extend this to high-tech. The consequences could be dire, if the enhanced human body would become subject to overreaching intellectual property rights held by companies. Imagine a pacemaker for your heart that has only been licensed to you and you lack the necessary data and rights to make it work over time. I’m sure some company will come up with a pacemaker that needs to get a license key every year or so from the company’s license server. Would the company let the person die, if he or she fails to pay the annual license fee? In case you wonder whether anyone would accept such a pacemaker into their heart (pun intended): Just imagine being poor enough to not be able to pay for the medical procedure. Or imagine requiring a particularly innovative pacemaker function that only this one manufacturer offers and you can’t pay for the perpetual license.

If this seems far-fetched, you should note that this is already happening in other contexts. For example, John Deere, a leading manufacturer of tractors and other farming equipment is only leasing its tractors and the software to farmers. John Deere argues that farmers don’t own the tractor and its data any longer, John Deere remains the owner. As a consequence, all data from the farmers’ tractors is planned to end up in John Deere data centers and farmers who don’t keep paying might be cut of their equipment and its data.

The Internet and interconnectedness is making it happen. It is indeed time to clarify ownership and limits of ownership, in particular when it comes to the human body and its rights. Indeed an interesting time for lawyers (and everyone else).

Tech troubles of @Seagate Backup Plus Slim

About two years back, I bought a Seagate Backup Plus Slim 2 TB external 2.5 inch harddrive. I love it! So much so, that I tried buying a second one a couple of months ago. From the get go, that second copy behaved weirdly, The disk was slow and seemed to operate in intermittent sprints only. I finally got out a benchmarking tool and the the tests bore out that something was wrong, when compared with my original (older) copy. The original one is displayed to the left, the new one to the right.

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Costs of no or poor open source governance

When talking with companies about the use of open source, sooner or later we end up discussing the problem of license compliance. This is perhaps the most prominent aspect of open source governance for companies getting started with using open source. It can be surprisingly difficult to coherently explain the cause and effect chains that create the potentially high costs of not properly governing your open source engagement!

So here then is my take at teasing it apart.

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Open data is moving, slowly but surely

I’ve been participating in various workshops and working groups on open data now. It is hard scrabble, but things are moving. Today I participated in a workshop of the open data task force of Bitkom which I am a member of. The highlight of the day was the participation of Saskia Esken who explained some and handled questions and answers on the new open data for government law that is coming up in Germany.

In related news, the task force finished its open data manifest, a collection of quality attributes of what good open data are and what to ask of providers and the government. A small handbook is in work as well.

From a Student Business Plan

In PROD, my course on software product management, students can choose to develop a business plan for a software product. Not all of my students seem to take this as serious as I wished. Here is the opening sentence of the exec summary from one of the teams:

With a total loss of 388,987.50 Euros in the period of 2017 to 2019, we will increase profit by 2,123,121 Euros and the customer base by 1392% […] Break even will be reached by mid 2018.

Reminds me off the bubble days: “We will make 80 cents for one dollar spent and will be profitable in no time!”

Entrepreneurship Panel at IT-Gipfel Göttingen #itgipfelgoe

A few days ago, I participated in a panel on entrepreneurship in the beautiful but small city of Göttingen, Germany. While a university town, it isn’t exactly the Silicon Valley either, much like my current home town of Erlangen.

Thus, on the panel, I ran into the usual German morals on what makes a good entrepreneur, respectively, how to treat one:

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