How Much Are Your Free Drinks?

Brave Gnu WorldAndrea Resmini

A Business Perspective on Free and Open Source Software

Internationella Handelshögskolan i Jönköping

September 2 2009

How much are your free drinks?Andrea Resmini

Internationella Handelshögskolan I JönköpingSeptember 2nd 2009

how much are your free soft drinks?a business perspective on free and open source software

Who am I,actually?



Information architectI design shared information spaces



Monday, 10:00 – meeting with the stakeholders



Associate editorJournal of Information Architecture



Tuesday 12:45 – Note to the board: is that guy DANCING?



F/LOSS advocatecontributed toFaceTag, OSCOM, FreeTes



Thursday 14:15 – Hey! That's my magazine you cut to pieces for those tags!



I'm also an advisor for the IAI, coordinator for REG-iA, chairman of the Italian IA Summit, founding member of the European IA / UX Network, a FatDUX consultant, a PhD student, blah blah blah

Many hats, but today ...



… very much like waking up the sleeping bear. Good penguin.



… today we speak offree + open source softwareor F/LOSS (FOSS)



What isthis thing then?A few examples



Free software you may already have heard of



Firefox, a web browser



Linux, an operating system. Ubuntu is a Linux distribution



OpenOffice, an office productivity suite



But it's not just software in your desktop



The just-announced Linux-based mobile phone by Nokia



The Apache Web server. One of many



The TIVo, a personal digital video recorder



And some free software you most surely haven't heard of



[http://www.microsoft.com/technet/interopmigration/unix/sfu/sfucustm.mspx]



Oh, yes.Not just software.Free beer as well



Free speechorfree beer?



or is it



And more important:are these any different?Let's go check



The free in free software stands for free as in free speech

Free software doesn't necessarily means you get to have free beers



YES! MAYBE?



Plenty of free software applications being sold or contracted every day: RedHat Linux Enterprise Premium is roughly $ 2499 per year

What F/LOSS really stands for is a different way of looking at what software is and should be, either technically or ethically



Differentsoftwareecosystems



FREE SOFTWARE

OPEN SOURCESOFTWARE

PROPRIETARYSOFTWARE

PUBLICDOMAIN



A rough, brief,sketchyhistory of F/LOSS



In the 60s and 70s, mainframe-times, programs usually were part of the hardware deals and generally then shared among small communities

In the early 80s, academic licenses started to be used for work on Unix systems

In 1985 R. M. Stallmann and others created the Free Software Foundation and the legal definition of free software under the GPL

In 1998, after the announce of the upcoming release of the Mozilla source code, B. Perens and others started using the term open source to seek fast commercialization and acceptance of free software



Then, when the European Commission started looking into this free software affair, they wanted to avoid the ambiguity of the word free and the misunderstandings carried on by open source. Their solution was to use an expression which was in use here and there since 1992, Libre Software

Hence, F/LOSS (Free/Libre and Open Source Software)



Free Softwareadefinition



Four freedoms define Free Software:

The freedom to run the program, for any purpose

The freedom to study how the program works, and adapt it to your needs

The freedom to redistribute copies so you can help your neighbor

The freedom to improve the program, and release your improvements to the public, so that the whole community benefits

Source: FSF



These freedoms are rights, not obligations, although respecting these freedoms for society may at times oblige the individual

Free Software does not exclude commercial use. If a program fails to allow commercial use and commercial distribution, it is not Free Software

Source: FSF



Open Sourceadefinition



Open source doesn't just mean access to the source code

There are other criteria which have to be respected for a license to be OSI (Open Source Initiative) compliant. These are:

Source: OSI



Free Redistribution

Source Code Available

Derived Works Allowed

Integrity of The Author's Source Code

No Discrimination Against Persons or Groups

No Discrimination Against Fields of Endeavor

Distribution of License

License Must Not Be Specific to a Product

License Must Not Restrict Other Software

License Must Be Technology-Neutral

Source: OSI



Oh, I get itIt's likepublic domain



Mh.Tweet this: #fail (1)

WRONG!



FREE SOFTWARE

OPEN SOURCESOFTWARE

PROPRIETARYSOFTWARE

PUBLICDOMAIN



F/LOSS is deeply rooted in Copyright Law

The GPL and other F/LOSS licenses rely on Copyright Law

You can only use and distribute the software under the terms and conditions of the license

The author strongly retains authorship and control



On theother hand,though



Public Domain has no Copyright

Works in the public domain has no person or legal entity who can establish or maintain proprietary interests within a particular legal jurisdiction: so to speak, it has no author but rather is considered common knowledge

There are no laws which restrict its use by the public at large

Proprietary rights are founded in national laws, so an item may be public domain in one jurisdiction but not another



But, wait a sec,the GPL is bad!F/LOSS kills squirrels!



Oh, I see. Maybe you are thinking aboutthe viral thing and all?



The Measles virus. This is a virus.



This most certainly isn't



Let's check this outand debunk some mythsFor example:



F/LOSS is bad for governments

F/LOSS is a huge security risk

F/LOSS forbids commercial use

F/LOSS (the GPL) is a virus

F/LOSS forces you to release your changes

F/LOSS is against intellectual property

F/LOSS is untrusted

F/LOSS wouldn't stand in Court

F/LOSS offers no path to revenue

F/LOSS comes with no guarantee nor support



But how do we do that?



Let's have a lookat somebusiness case studies



French GendarmerieFranceMigration = flexibillitySource: OSOR, EU



The French Gendarmerie Nationale is composed of the police forces and the military policeTheir police work includes everything from criminal investigation to airport security and support of military servicesIt is one of Europe's largest public bodies, having over 100.000 employees distributed all over the countryDecisions are made in ParisNeed of a communication infrastructure that does not depend on third parties



In 2001 the Gendarmerie Nationale started introducing open source softwareThe main goals were to gain greater independence and flexibility than proprietary software could offer



The use of F/LOSS allowed more flexibility and made the introduction of new standards easierF/LOSS met their needs and offered greater transparency and was easier to adapt and changeIn 2005 the Gendarmerie replaced Microsoft Office with its open source counterpart OpenOffice, which not only was available at no cost, but also allowed for exactly this modularity and transparency the Gendarmerie required“We didn't want any of our software to force us to employ a special operating system”



When Microsoft announced its new operating system Vista in 2006, the Gendarmerie thought that at some point in the near future a migration of the whole operating system would be necessaryThe group had gained considerable expertise in working with open source software through the several projects implemented since 2001The desktop usability of several GNU/Linux distributions had also significantly improved since that timeThe decision to migrate all new workstations to Ubuntu Linux was finally taken in January 2008



In the year 2008 alone 5000 new workstations have been deployed, all running on UbuntuEvery new workstation will ship with the same setupDuring 2009 the Gendarmerie is planning to migrate close to 15.000 workstations in total



The LiMux ProjectMunich, GermanyMigration = independenceSource: OSOR, EU



The German city of Munich is migrating its computers to open source and GNU/Linux, both on desktops and serversRather than lowering IT costs, the main motive is the desire for strategic independence from software suppliers



The LiMux project puts great emphasis on becoming independent from software suppliers. “Microsoft has shown us what it means to be dependent on a vendor.”Until 2003, the city was using Microsoft Windows NT 4 across the board, and was by and large satisfiedThe City commissioned a study checking on both proprietary and open source solutions, with regard to their cost effectiveness, technical feasibility and strategic implications. The result of this was a tie match



The total cost for the proprietary solution were calculated to be 35 million Euro, against 37 million Euro for GNU/Linux These included all costs beyond the solution itself, such as personnel and training costs, over five yearsWhile the proprietary solution was deemed to be slightly more cost-effective over the full period, the strategic advantage of being free to take its own IT decisions led the city council to decide in favor of the migration to GNU/Linux



The city partnered with SuSE/Novell and IBM and worked out a detailed concept for the migration during 2003 and 2004The actual migration has been running since 2005 once all legal sides had been clearedFor most it has been a soft migration, first installing the open source applications Thunderbird, Firefox and OpenOffice on Windows computers, then rolling out the GNU/Linux basic clientThis gradual approach keeps the demand for training and support services manageableProprietary software will be used where a migrations is either impossible or not cost-effective, possibly migrating to platform independent web browser applications



This will also complete the internal move to the ODF document format and stop the incessant flow of templates being built all over different officesThe migration also offers an opportunity to standardize the city's heterogeneous IT environmentIn August 2008, 8500 of the city's 14.000 workplaces are using OpenOffice, and 1.200 workplaces LiMuxThe city goal is “80% + X by 2012”



Who writes Linux?A simple enough questionhas an unexpected answer



If you are like meyou are going to saysomething like this:



“Oh, I know, that's easyIt's that geeky guy whonever gets out of his room”



Mh.Tweet this: #fail (2)

WRONG!



1. Red Hat: 12.3%

2. IBM: 7.6%

3. Novell: 7.6%

4. Intel: 5.3%

5. Independent consultant: 2.5%

6. Oracle: 2.4%

7. Linux Foundation: 1.6%

8. SGI 1.6%

9. Parallels 1.3%

10. Renesas Technology: 1.3%

11. Academia: 1.2%

12. Fujitsu: 1.1%

13. MontaVista: 1.1%

14. MIPS Technologies: 1.1%

15. Analog Devices: 1.0%

16. HP: 1.0%

Source: Who writes Linux: Big Business [http://ow.ly/nDyG]



Linux is not techies for techies

Major computer companies like IBM, Intel, Oracle, Fujitsu, and HP, spend hundreds of millions in making Linux better

They don't think Linux is "cool"

Linux makes good, hard business sense for traditional hardware and software companies



Ha!



Generalbusiness advantagesin the use of F/LOSS



Try before you buy as much as you need

Lower startup costs

Lower licensing and auditing costs

Possibility to profit from an enormously large pool of existing software

Possibility to adapt for local needs

Possibility to deploy on demand

Higher share of added values remains local

Can drive ICT and innovation

No single-vendor lock-in and your data stays yours



Payoffsfor developersfor merchantsfor entrepreneurs

Source: OSI



Development Speed

Commercial developers using the bazaar mode might have a substantial initiative advantage over those that don'tFirst commercial developer in a market niche may gain substantial advantages over later ones, as pool of available talent is limited

Lower Overhead

Significant overhead reduction in per-project software production costs. The open-source model allows software shops to more easily outsource some of their work, paying for it in values less tangible than money

DEVELOPERS

Source: OSI



Closeness to the Customer

Management advice often repeated is "Stay close to the customer." If you sell software, what better way to do this than by co-opting your customers' engineers to help your development?

Broader Market

An important side-effect of the open-source model will be a much wider platform range for your product. Open-source authors frequently find themselves receving, for free, port changes for operating systems and environments they barely know exist and can't afford developers to support. Each such port, of course, widens the market appeal of the product.

MERCHANTS

Source: OSI



Grab mind-share

The best new concept in the world won't make money unless people know it's interesting

Value in service and integration

Whether this makes sense as a strategy depends on whether you think your main value proposition is in the software itself or in service and the expertise associated with the software. Software easily becomes a commodity, though

ENTREPRENEURS

Source: OSI



Higher levelbusiness' and investor'spoints of view



1. Support Sellers2. Loss Leader3. Widget Frosting4. Accessorizing

[http://www.opensource.org/advocacy/case_for_business.php]



Support Sellersor "Give Away the Recipe, Open A Restaurant"

In this model, you give away the software product, but sell distribution, branding, and after-sale service. This is what Red Hat does

Source: OSI



Loss LeaderIn this model, you give away open-source as a loss-leader and market positioner for closed software. This is what Netscape did

Source: OSI



Widget FrostingA hardware company for which software is a necessary adjunct but strictly a cost rather than profit center goes open-source in order to get better drivers and interface tools cheaper. Silicon Graphics, for example, supports and ships Samba

Source: OSI



AccessorizingSelling accessories - books, compatible hardware, complete systems with open-source software pre-installed. Easy trivialized but books and hardware underly some clear successes: O'Reilly Associates, and SSC are among them

Source: OSI



Source: OSI

Support / service sellers and Loss leader have so far proven to be reliable business methods for commercial success in the free and open source software arena.

Nevertheless, there is good reason to believe that the clearest near-term gains in open-source will be in widget frosting

For widget-makers (such as semiconductor or peripheral-card manufacturers), interface software is not even potentially a revenue source. Therefore the downside of moving to open source is minimal



Conclusionsand a short storyconcerning free soft drinks



Me: “Hello, what can I get for you today?”

Customer: “Yeah, how much are your free soft drinks?”

Me: “… I’m sorry?”

Customer: “Are you deaf son!? HOW MUCH ARE YOUR FREE SOFT DRINKS!?”

Me: “Oh, I’m sorry sir. I couldn’t hear you and thought you said something stupid. The free drinks are $5 each.”

Customer: “That’s f***ing highway robbery! You people should be ashamed!”

Me: “Oh, we are…”

Source: Not Always Right, http://notalwaysright.com/just-tell-%E2%80%98em-what-they-want-to-hear-part-three/1124



You might give them what they want, but knowing your options always pays off



And thank you!

Questions?It's either now or mail: [email protected] read: http://andrearesmini.com tweet: http://twitter.com/resmini/

How Much Are Your Free Drinks?

Education

Transcript of How Much Are Your Free Drinks?