I just finished listening to Marten Mickos at PARC Forum on open source businesses. Below please find my list of key statements from this talk. Most are well-known, some remain controversial, however, as a researcher it is good to be able to pinpoint such statements.
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.
Available as HTML or as a PDF file.
2009 is coming to an end and so are my first four months as a professor. Time to take stock, if only shortly.
All in all, a good end to a year that most of us would prefer to forget. But as Matt Asay is suggesting, this may have been the year that Open Source made it big, so this is something to celebrate!
Stay tuned for upcoming research work on open source, using this blog’s RSS feed, or the OSR group’s home page and RSS feed, and of course the @dirkriehle and @osrgroup Twitter streams!
And of course a happy, healthy, and prosperous 2010 to everyone!
Yesterday, SAP’s CTO Vishal Sikka called for a more open approach to the Java standardization process (JCP), asking SUN to stop ruling it with a heavy hand. Not surprisingly, he got some pushback using the argument that SAP isn’t one to talk about being more open, given its slow involvement with open source.
I don’t think that this is a fair critique. SAP has always provided the source code of its main business applications suite to user-customers as part of a commercial license, and users have always customized SAP’s business suite to their heart’s content. In fact, it is the only way to make it work for their needs.
Yesterday, I participated in the local JUG’s discussion of the Sun acquisition by Oracle. Somewhat to my surprise, the general opinion was dismissive of OpenOffice’s future at Oracle. I haven’t spent much prior thought on this, but to me, OpenOffice seems to fit much better with Oracle than with Sun, at least on a strategic level. The reasoning is quite simple: OpenOffice can help Oracle’s application business.
It is difficult for many closed source software vendors to embrace open source. Why is this so? After all, over the last years we have come to understand the many business benefits of employing open source as part of a software vendor’s strategy toolbox. In this presentation, I make a first attempt at answering this question (and also include a few remedies). In a nutshell,
open source is hard for closed source vendors, (1) because they have a different risk/reward profile than startups and have a higher fear around legal uncertainties, (2) because they would have to undergo substantial and painful organizational change, easily involving lay-offs, and (3) because current sales incentives are not set up to support cross-selling open source.
This presentation is an alpha release, which is to say, I doubt I’ve nailed it all. Please tell me what you think I’ve missed or where you dis/agree with my thoughts! Because of this, I maintain full copyright of the presentation. Later revisions will hopefully include your feedback (and give proper credits) and will be released under the Creative Commons BY-SA 3.0 license.
The presentation is available as a PDF file.
For my AMCIS 2009 talk on the single-vendor commercial open source business model, first the abstract, then the slides:
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… [more]
The talk slides are available as a PDF file and are licensed under the Creative Commons BY-SA 3.0 license.
For a discussion of the talk’s contents I recommend reading the original article.
I guess everybody knows it but nobody ever named it, as far as I know, so I’m doing it here:
The Intellectual Property Rights Imperative of Single-Vendor Commercial Open Source Always act in such a way that you, and only you, possess the right to provide the open source project under a license of your choice.
You may have noticed the recent discussion about which open source license a single-vendor commercial open source firm should choose for its community offering. In this blog post I’ll argue that this choice depends on the state and speed of the firm.
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.
