Open Source Business Models

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15 Αυγ 2012 (πριν από 4 χρόνια και 11 μήνες)

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Open Source Business Models

Rafael de Albuquerque Ribeiro <rar@cin.ufpe.br>

IN953


Software Engineering 2007.1

July 23, 2007 :: Recife


PE


Business model definition


Key points for Open Source


Harnessing Community Power


Open Source Licensing


Business Strategies


Open Source evolution

What is a business model?


‘Business model’ is a term often used to
describe the key components of a given
business.


[...] unite finer aspects of strategy, such as
resource
-
bases, activities, structure,
products and external factors.


Hedman, J. and Kalling, T. 2003. The business model concept: theoretical underpinnings and empirical illustrations.

Key points for Open Source
Business Models


IPR, Copyright and product lifecycle control


Harnessing community workforce


Tailor revenue sources according to
licensing model


Location in the value chain

“Boss, let‘s start an Open Source group”


“OK”


Him:
-

But it must make economic sense


Me:
-

Sure


no problem


*gulp*

Langham (2005) Surviving the five year itch: A tale from the trenches of European Open Source business models

Innovation Happens Elsewhere



Lessons from the experience of setting up the an
open source like project at Sun


The JINI Project served as base for NetBeans,
OpenOffice, Project JXTA, and java.net.


“[...] Sun did not have the expertise to define Jini
services in areas like printing, digital
photography, [...]”

The community

6. Treating your users as co
-
developers

7. Release early. Release often.

10. treat your beta
-
testers as if they're
your most valuable resource

11. The next best thing to having good
ideas is recognizing good ideas from
your users.

Raymond, E. S. 1999
The Cathedral and the Bazaar
. 1st. O'Reilly & Associates, Inc.

Open Source Paradigm Shift


Commoditization of software


Network
-
enabled collaboration


Customizability and Software
-
as
-
Service

O’Reilly (2005) The Open Source Paradigm Shift. In Perspectives on Free and Open Source Software, eds. Feller et al., MIT Pr
ess


OSS Licenses


Licensing is such a complex subject that
we can find books about it *


New Zealand government has developed a
research in where the licenses where
categorized as:


strongly infectious


weakly infectious


permissive

*
Laurent, Andrew M. St. 2004. Understanding Open Source and Free Software Licensing. O'Reilly Media,Inc.

State Services Commission (2006) Guide to Legal Issues in Using Open Source Software. New Zealand Government Policy. [
http://www.e.govt.nz/policy/open
-
source/open
-
source
-
legal/guide
-
to
-
legal
-
issues
-
in
-
using
-
open
-
source
-
software.pdf

]

Strongly infectious licensing


Problem:


How to estimulate the return of the
enhancements of an open source software to
the community or author.


Solution:


Have the software or product licensed using
the GNU General Public License (GPL)



Known uses:


MySQL SGBD, Cyclades products

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Weakly infectious licensing


Problem:


How to estimulate the return of the
enhancements of an open source software to
the community or author without the huge
impositions of the GNU GPL


Solution:


Have the software or product licensed using
the GNU Lesser General Public License
(LGPL) or Mozilla Public License (MPL)



Known uses:


OpenOffice.org uses LGPL and Mozilla Firefox
uses MPL

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Permissive licensing


Problem:


How to protect the copyrights of the original
author of a software and impose that any
derivative work promotes the original software


Solution:


Have the software or product licensed using
the Apache License (APL) or Berkeley
Software Distribution (BSD) License


Known uses:


PostgreSQL uses BSD and Apache HTTP
Server uses APL

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Apache chairman: Days numbered for
commercial software


A license can ruin a perfectly good
piece of software

[…] A bad license
can make it so restrictive that nobody
wants to use the software

Krill (2006) http://www.macworld.co.uk/news/index.cfm?RSS&NewsID=14172

Licensing and Sponsorship


Several project characteristics may be important
to OSS success including


project age


project development status


programming language


type of software developed


intended audience


reputation of participants


licensing issues


organizational involvement in the project


Stewart et al. (
2005
) A Preliminary Analysis of the Influences of Licensing and Organizational Sponsorship on Success in Open
Source Projects. In Proceedings of the
38
th Annual Hawaii International Conference on System Sciences (HICSS'
05
)


Licensing and Sponsorship


147
projects on Freshmeat.net


Dependent variables:


Change in subscribers (popularity)



New releases (vitality)



Independent variables


License restrictiveness


Is the project sponsored?


Initial popularity


Control variables


Project category


Project age


Stewart et al. (
2005
) A Preliminary Analysis of the Influences of Licensing and Organizational Sponsorship on Success in Open
Source Projects. In Proceedings of the
38
th Annual Hawaii International Conference on System Sciences (HICSS'
05
)


Licensing and Sponsorship

Stewart et al. (
2005
) A Preliminary Analysis of the Influences of Licensing and Organizational Sponsorship on Success in Open
Source Projects. In Proceedings of the
38
th Annual Hawaii International Conference on System Sciences (HICSS'
05
)



Hypothesis
1
:

OSS projects that use a
nonrestrictive license will become more popular over
time than those that use a restrictive license.


Hypothesis
2
:

Sponsored OSS projects will become
more popular over time than non
-
sponsored OSS
projects.


Hypothesis
3
:

OSS projects using a restrictive
license will experience higher levels of vitality than
those using a non
-
restrictive

license.


Hypothesis
4
:

OSS project popularity will have a
positive effect on OSS project vitality.


Guide to Legal Issues in Using
Open Source Software



A guide to help New Zealand government
departments assess and mitigate the legal
risks of using open source software.

New Zealand’s State Services Commission (2006) [http://www.e.govt.nz/policy/open
-
source/open
-
source
-
legal/guide
-
to
-
legal
-
issues
-
in
-
using
-
open
-
source
-
software.pdf]

Guide to Legal Issues in Using
Open Source Software

New Zealand’s State Services Commission (
2006
) [http://www.e.govt.nz/policy/open
-
source/open
-
source
-
legal/guide
-
to
-
legal
-
issues
-
in
-
using
-
open
-
source
-
software.pdf]

Guide to Legal Issues in Using
Open Source Software

New Zealand’s State Services Commission (
2006
) [http://www.e.govt.nz/policy/open
-
source/open
-
source
-
legal/guide
-
to
-
legal
-
issues
-
in
-
using
-
open
-
source
-
software.pdf]

How open is open enough?


Leveraging openness while keeping
differentiation


Apple


Reuse and leverage


IBM


from platforms to applications


Sun


opening new platforms



J. West. How open is open enough? melding proprietary and open source platform strategies. Research Policy,
32
,
7
(July
2003
),
1259
--
1285
.


Towards a Product Model of Open Source
Software in a Commercial Environment

Deng et al. (
2003
). Towards a Product Model of Open Source Software in a Commercial Environment. In
3
rd International Workshop
on Open Source Software Engineering. ICSE
03
.

OSS Business models


Based on the seven business models
identified on (Koenig, 2004), seven
business patterns were proposed


Koenig (
2004
) Seven open source business strategies for competitive advantage. IT Manager’s Journal

Patronage


Problem:


Share the cost of developing a common kernel
for an specialized software accross several
companies


Solution:


Foster the development of an open source
product on top of which you can derive your
specialized software


Known uses:


IBM incentive to Eclipse Foundation

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (
2007
) Padrões para Negócios Open Source.
6
ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil,
2007
.

Optimization


Problem:


Have a software which has optimal
performance in relation to the commodity
layers that it runs on top


Solution:


Adjust the software to have optimal
performance when running on top of an open
source software


Known uses:


Oracle SGBD and Linux

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (
2007
) Padrões para Negócios Open Source.
6
ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil,
2007
.

Dual Licensing


Problem:


Increase installed base for a software without
loosing revenue from licensing


Solution:


Offer the same software with two possible
licensing options depending of its usage.


Known uses:


MySQL

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (
2007
) Padrões para Negócios Open Source.
6
ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil,
2007
.

Embedded


Problem:


Develop a multi
-
platform embedded solution
minimizing the costs


Solution:


Develop the product on top of an existing open
source solution


Known uses:


Cyclades

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Subscription


Problem:


Have a business based on the new
perspective of the software industry where the
revenues are mainly based on services


Solution:


Give the software away for free and charge for
value added services


Known uses:


Redhat

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Hosted


Problem:


How to offer a services platform that is
platform independent


Solution:


Implement the services platform on top of
open source software in order to reduce costs
and increase interoperability


Known uses:


Google and Amazon

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (2007) Padrões para Negócios Open Sou
rce
.
6ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil, 2007.

Consulting


Problem:


How to offer services for a software market
where investments in software lincensing is
declining


Solution:


Establish partnerships with open source
software developers to offer consulting
services such as migration services for their
products


Known uses:


Covalent

Ribeiro, R. A., Guimarães, R. A., Moraes, A. K. O., Albuquerque, J. O., Meira, S. R. L. (
2007
) Padrões para Negócios Open Source.
6
ª Conferência Latino Americana em Linguagens de Padrões para Programação, Porto de Galinhas, Brasil,
2007
.

The Transformation of Open
Source Software


Open Source is shifting from community
driven to business driven


Presence of concepts such as product
roadmap


Cathedral like design and development and
bazaar like distribution

Brian Fitzgerald (
2006
)The Transformation of Open Source Software. MIS Quarterly, Vol.
30
, No.
3
,
2006

The real development community?


The myth of a global, expansive open source
development community is just that: a myth.


Even JBoss and MySQL are overwhelmingly developed
by those respective companies
, and not by a crowd of
outside developers (95% and 85%, respectively, I
believe) [Asay 2005]


Between 80 percent and 85 percent of people working on
Eclipse projects are paid salaries by their employers who
send them to work for Eclipse.

Asay (
2005
) So you want to build an open source community... [http://asay.blogspot.com/
2005
_
09
_
01
_asay_archive.html]

Krill (
2006
) Death of the software salesman? http://www.infoworld.com/article/
06
/
02
/
16
/
75460
_HNdeath_
2
.html


In the end…


There is no “right” business model for
Open Source


Whatever works for you, your customers and
the community you participate in, is
right
.


SURE?


What should be a business model for
open source software factories?

Langham (
2005
) Surviving the five year itch: A tale from the trenches of European Open Source business models

really GOOD business model?...

MSFT vs. RHT

MSFT vs. RHT: o futuro
[visto do passado]

Open Source Business Models

Rafael de Albuquerque Ribeiro <rar@cin.ufpe.br>

IN
953


Software Engineering
2007.1

July
23
,
2007
:: Recife


PE