An introduction to open source and implications for management INF5890 Guest lecture Jan Fredrik Stoveland-Alfsen jan-fredrik.stoveland-alfsen@pwc.com

15.04.2016 3

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

15.04.2016 4

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

What is open source?

• Open source refers to a program in which the source code is available to the general public for use and/or modification from its original design free of charge, i.e., open. Open source code is typically created as a collaborative effort in which programmers improve upon the code and share the changes within the community. (Webopedia)

• Open source contains two aspects (O’Mahony): 1. Intellectual property strategy 2. Development methodology

• The Open Source Definition published by the Open Source Initiative describes what conditions a license must fulfill in order to be termed an Open Source license. https://opensource.org/osd

15.04.2016 5

The cathedral and the bazaar Proprietary software development • “Carefully crafted by individual wizards

or small bands of mages working in splendid isolation”

• Development occurs behind walls • source code is usually not provided -

kept locked up • Corporate hierarchy

Open source software development • "Given enough eyeballs all bugs are

shallow" • Code developed over the internet with

several others in public view • Source code open to all users

15.04.2016 6 http://www.catb.org/esr/writings/cathedral-bazaar/cathedral-bazaar/

Who is open source?

15.04.2016 7

Open source vs traditional software development

15.04.2016 8

Open source: Key questions for management

1. How to ensure contributions and an active community? 2. How to manage and govern distributed and voluntary

development? 3. How to protect the commons? 4. How to make money (firms)? 5. How to gain legitimacy (firms)? 6. How to ensure software quality and continued support?

(customer)

15.04.2016 9

15.04.2016 10

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

Early 1960’s: Origins of UNIX Dates back to the mid-1960s when the Massachusetts Institute of Technology, AT&T Bell Labs, and General Electric were jointly developing an experimental time sharing operating system called Multics for the GE-645 mainframe. https://en.wikipedia.org/wiki/History_of_Unix

15.04.2016 11

1983: Richard Stallman establishes GNU and the Free software foundation • 1980’s: Commercialization of

AT&T’s Unix triggered MIT professor Stallman to develop the GNU alternative as free software

• The Free software foundation was established along with the General Public License (GPL) – «Copyleft»

15.04.2016 12

1991: Linus Thorvalds publishes first version of the Linux kernel to an internet newsgroup • Linux 2.0 released in 1996

• The Linux kernel is still considered the most successful and active open source project to this day

• Linux forms the basis of multiple Linux distributions, including:

– Debian, Ubuntu, Fedora, SUSE, Gentoo, and hundreds more

15.04.2016 13

1995: Release of Apache 1.0

• Has dominated the market of web servers since

• Developed by a cluster of people later to form the Apache Group

• In 1999 incorporated as a nonprofit organization, the Apache Software Foundation

15.04.2016 14

1998: Foundation of the Open Source Initiative • OSI was jointly founded by Eric Raymond and

Bruce Perens in late February 1998

• The Open Source term was coined to accommodate use of open software in the commercial world

• Primary mission to maintain the open source definition and approve open source licenses

15.04.2016 15

1998: Netscape Navigator released as open source (later to be Mozilla)

15.04.2016 16

2012: Red Hat reaches $1 billion in annual revenue

• 2016: First Open source company to hit $2 billion

15.04.2016 17

Open source might have started as religion, but is now part of every software company - one way or another

2001 "Linux is a cancer that attaches itself in an intellectual property sense to everything it touches” - Steve Balmer, CEO Microsoft

2014 «Microsoft loves Linux» - Satya Nadella, CEO Microsoft

2016 Microsoft SQL is ported to Linux

15.04.2016 18

15.04.2016 19

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

Motivation for participation

15.04.2016 20

Individual motivation in the openSUSE project

15.04.2016 21

Open source business models

15.04.2016 22

Firms’ relationship to open source software

• Based on case studies relationships between firms and open source communities may be characterized as symbiotic or parasitic (Dahlander & Magnusson, 2005).

• The symbiotic approach: – co-evolution between the community and the firm. – Legitimacy is gained through status in the community based on its norms and values,

not from having a formal role in a firm.

• The parasitic relationship: – Clearer that the firms maximize their own benefits often in violation with the norms of

the community. – Could for example characterize a firm with a packaging or proprietizing strategy,

making large profits as a free-rider without contributing anything back to the community.

15.04.2016 23

15.04.2016 24

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

How it started

• Netflix became big user of Apache licensed open source software.

• When Apache Cassandra was picked as data storage solution Netflix started to contribute fixes and extensions to optimize Cassandra’s capabilities on AWS (Amazon Web services)

• This led to Netflix see the benefits of releasing their own projects and created a central Netflix account at netflix.github.com

15.04.2016 25

Netflix now host over 50 open source projects

15.04.2016 26

Netflix rationale for going open source

• «Paying back in kind»

• Can benefit from the scale effects of other AWS users adopting similar patterns and technologies

• External community contributions

• Improved code and documentation quality

• Durability

15.04.2016 27

15.04.2016 28

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

What is an open source community?

In general, an open source community should include (O’Mahony, 2003):

1. The source code and binaries to the software product

2. A collaborative information platform

3. Communication channels

4. Development tools

5. A governance structure

6. Collaboration protocols

7. A unifying identity

15.04.2016 29

Characteristics of autonomous communities

15.04.2016 30

• Community and code base scale in parallell

• Initiated by individuals

• Governance ranges from autocratic to meritocratic to democratic with decentralized decision-making

• Norm-based rationale

• Needs to ensure protection for project and software

• Independent

• Pluralistic

Tactics for guarding the commons

1. Licensing terms that restrict proprietary apporpriation

2. Legal and normative sanctions

3. Incorporate (create legal entity)

4. Transfer individual copy rights to a foundation

5. Trademark brands and logos

6. Assign trademarks to the foundation

7. Actively protect brand

15.04.2016 31

Challenges for autonomous communities

• «The initial leader must assemble a critical mass of code to whitch the programming community can react» (Lerner & Tirole)

• Attracting talented software developers

• Acquiring resources for legal services, marketing and production

15.04.2016 32

Characteristics of firm-sponsored communities

• Initiated by sponsor firm

• Massive code base is released to minor community

• Ambiguous control and ownership, usually held by sponsor firm

• Community product forms basis of or complements commercial software product

15.04.2016 33

Managerial challenges for sponsored communities

• Steep learning curve when releasing a mature product to an infant community (West, 2005)

• Respecting norms and values • Supplying resources for community development • Attracting developers and users • Aligning different interests about the nature of work • Resolving ambiguity about control and ownership • Getting acceptance for using community software for commercial

purposes (Dahlander & Magnusson, 2005)

15.04.2016 34

Considering what you now know about open source communities, answer the following:

• What is required by management of an open source community in order to ensure successful software development and governance?

• Spend 5 minutes in discussion with you neighbor

15.04.2016 35

Suggested answers:

• A sponsor with legitimacy and authenticity • Charismatic leadership • Community management: stroking, grooming and encouragement • Respected software developers as community members • Public recognition for contibutions • High quality software product • Unifying identity and culture • Effective interaction tools • Mechanisms of ‘subtle control’: Devoted personell, reputation building,

fringe benefits, selling development tasks (Dahlander & Magnusson, 2005)

15.04.2016 36

15.04.2016 37

Topics

Introduction: Main questions for management

History of open source: From hacker communities to big business

Motivation for the individual and the enterprise

Case: Netflix

Open source communities: Software development and governance

Case: Novell and SUSE Linux

Novell and SUSE

• Novell was a large, traditional software provider of operating systems and other IT application services

• 1994: First version of the SUSE Linux distribution is released

• 1997, SuSE, LLC was established • 2004: Novell aqcuires SUSE Linux • 2005: Novell launches the openSUSE

project • 2011: Attachmate acquires Novell and

continues SUSE as a stand-alone business

15.04.2016 38

15.04.2016 39

Novell enters the open source communities

The new development model is to benefit from community contributions

15.04.2016 40

Forces of separation add pressure to the business model

15.04.2016 41

Forces of system connectivity

15.04.2016 42

Have we answered the questions?

1. How to ensure contributions and an active community? 2. How to manage and govern distributed and voluntary

development? 3. How to protect the commons? 4. How to make money (firms)? 5. How to gain legitimacy (firms)? 6. How to ensure software quality and continued support?

(customer)

15.04.2016 43

QUESTIONS? Thank you for your time

15.04.2016 44