Why Open Source is Good for Your Economy (FOSSC19 Recap)

It is no secret that software is everywhere. No traditional product has remained untouched, whether the product is being produced using software or whether software is an integral part of it. As part of this wave of digitization, established vendors from outside the software industry need to avoid that someone else will reap all the profits from their products. That someone else would be software companies that supply needed components. In particular software platforms can have such network effects that their providers can reach a monopoly position so that dependent vendors who need the platform will face a diminishing profit margin.

One counter action for traditional product vendors is to build up software development capabilities and develop the software components they need themselves. And one certainly should do so to not be left behind. Sadly, some ecosystems, most notably Silicon Valley, are so far ahead on the curve that a pure game of catch-up will be hard to play except for the most determined companies and economies.

A better strategy is to remove some of the outsize profits from the software industry by replacing closed source software components with open source software components. Such open source components can be developed jointly with other companies and even between countries.

A good organizational form to make such joint work sustainable is the open source user consortium. A long running example is the Kuali Foundation, which guides the development of software needed for operating universities. Another more recent example is the German openKONSEQUENZ cooperative, which guides the development of software needed for the smart (energy) grid. I initiated and helped setup this second example.

Many more are in the making. At the recent Open Source Leadership Summit, the Linux Foundation announced the ASWF, a foundation-like project with its own governance to guide the development of software needed to produce movies, and LF Energy, a foundation-like project to guide the development of software for long-distance energy network operators. The Eclipse Foundation, another umbrella open source foundation, offers industry working groups, which are also foundation-like projects. Examples domains covered by the Eclipse Foundation are the automotive, the geographical, and the science domain.

It is not always easy for non-software companies to actively shape their software future. For this reason, governmental support and policies can be helpful in the form of education and organizational support. Once companies understand the impact of reducing their dependency on foreign software vendors by way of community open source software, however, important gains can be made that strengthen both the companies in need of the software as well as the local supporting software industry.

In a talk at FOSSC 2019 in Muscat, Oman, on Feb 12, 2019, I laid out the fundamentals of such an approach (as I have done before). If you are interested to learn more, you can find the slides online. Feel free to comment or send me email!

Also, on March 19, 2019, at the German Forschungsgipfel (research summit), I hope to present the same argument. Seek me out!

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