Three Reasons Why Companies Are Creating Their Own Open Source Consortium

Most open source these days, certainly the most widely used open source, is developed by companies. Open source, by definition, is competitively non-differentiating, so companies can join forces in its development. To so do peacefully, however, they need good governance that preempts conflicts among the participating companies. Such governance is usually provided under the auspices of an open source foundation, of which the big three are the Apache Software Foundation, the Eclipse Foundation, and the Linux Foundation. Despite these existing foundations, many companies interested in developing a new open source software keep opting to create their own consortium.

The reasons are not fully understood, but as someone who has guided such consortia, I can offer at least three reasons. Before I present these reasons, I need to distinguish three types of companies and their situation that influence the decision on whether to create an open source consortium or not:

  • The software vendor. Companies whose main product is software understand open source well and have no problems contributing to or leading the development of open source software within the set-up of an existing open source foundation.
  • The non-software product vendor. Companies whose main product is not software, but contains software (e.g. car manufacturers) in the past have opted to go it alone (e.g. GENIVI) or join an existing foundation (e.g. openMDM of the Eclipse Foundation).
  • The service provider. Companies, who use software in their operations, but otherwise do not deliver a product to customers that contains software (e.g. energy distributors, transport providers, advertising agencies) may have the most unique requirements.

Of interest here are only the non-software vendor and the service providers, who would like to establish consortia which I call user-led or user consortia (as opposed to the software-vendor-led foundations).

Now, without further ado, three reasons why companies have created stand-alone user consortia rather than joining an existing foundation:

  1. Lack of specialized governance. The original reason for creating their own consortium is that existing vendor-led consortia did not take into account the special needs of user-led consortia. Examples are the Kuali Foundation and the GENIVI Alliance. This reason has mostly gone away, now that the Linux Foundation and the Eclipse Foundation are catering to these needs. Only the Apache Software Foundation keeps insisting that one size of governance fits all and hence is missing out.
  2. Not seeing eye-to-eye in existing consortia. Another reason is the mistrust (and sometimes grandeur) of the budding user-led consortium which thinks that existing foundations, still vendor dominated, won’t have their best interest at heart. Specifically, a mismatch in company size creates this mistrust and makes small companies wanting to keep to themselves and join forces first before engaging with a larger player through a secondary incorporation.
  3. A third reason is simply price. Both the Linux Foundation and the Eclipse Foundation charge for membership, and for some companies, the costs are too high. Given that the provision of governance services through existing foundations is a fairly transparent market, price discrimination is hard to pull off. An example is the openKONSEQUENZ consortium of energy distribution network operators, which started out as a working group of an established foundation, but then decided to create its own cooperative.

There you have it. I’m not saying that these are good reasons, but these are three reasons I observed in my dealings with user-led consortia. In my professional life as a professor I’m doubling down on this phenomenon, because it is truly important in its effects on industry and business as a whole. For this, I’d love to hear about more known examples of user-led consortia (whether stand-alone or part of an existing foundation)–so far we counted more than a hundred.

Also, I am looking for Ph.D. students to work on this topic; background and research skills should be information system and computer science education. A Ph.D. student in Germany is paid a full salary, so this is a sweet deal. Please spread the word!

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