OPEN SOURCE projects - how are they organized and financed
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Transcript of OPEN SOURCE projects - how are they organized and financed
Adam Walczak - www.adamwalczak.info
Adam Walczakwww.projektyopensource.pl/ksiazka
There are many myths about the Open Source Community
Adam Walczakwww.projektyopensource.pl/ksiazka
There are many myths about the Open Source Community
that most of them are working the as volunteers ...
Adam Walczakwww.projektyopensource.pl/ksiazka
There are many myths about the Open Source Community
that they are driven by an utopian ideology ...
Adam Walczakwww.projektyopensource.pl/ksiazka
There are many myths about the Open Source Community
that they make a living from donations ...
Adam Walczakwww.projektyopensource.pl/ksiazka
There are many myths about the Open Source Community
?!
Adam Walczakwww.projektyopensource.pl/ksiazka
According to the research done for the European Committee
Economic impact of FLOSS on innovation and competitiveness of the EU ICT sector
The scale of open software
● It was estimated that services and products based on open source software will make up to 32% of the IT sector till 2011. This would be about 4% of the whole European market.
● Open software supports in a large scale 29% software projects in the UE and 49% in the USA.
● Open source lets the world economy cut 36% of costs in software research and development projects.
● The value of resources invested in open source is estimated to be 22 billion euro which is 20.5 % of the overall investment in software produced in the UE; in USA its 36 billion euro which makes up to 20 % of the overall investment.
Adam Walczakwww.projektyopensource.pl/ksiazka
According to the NBER resource centers report
The economics of sharing: Open source and Beyond
The history of the Open Source and Free software movementIs divided in to three eras:
A little history lesson ...
● the 60' i 70' – First era of collaborate software development
● the 80' – Expansion of closed software
● From the 90' – Rise of the net, mass collaboration and Open Source
Adam Walczakwww.projektyopensource.pl/ksiazka
A not obvious division
free software ≈ open source
Richard Stallman
Moral choice
Restrictive licenses
Eric S. Raymond
Practical choice
Permissive licenses
Adam Walczakwww.projektyopensource.pl/ksiazka
A not obvious division
Richard Stallmans speech when receiving the Linusa Torvaldsa Award for his input to Open Source at the Linux World 1999 conference:
Giving the Linus Torvalds Awardto the Free Software Foundation
is a bit like giving the Han Solo Awardto the Rebel Fleet
Adam Walczakwww.projektyopensource.pl/ksiazka
Motivations of open source participants
Paid jobs or contract
Knowledge and experiance
Ideology
For fun
Future job/business opertunities
Received donations
0% 20% 40% 60% 80% 100%
Very large Significant Small None
Adam Walczakwww.projektyopensource.pl/ksiazka
General organizational culture in open source projects
● Treating software users as developers
● Short release cycles
● Open forms of communication in the project
● Higher motivation of open source participants
● egoless programming
● No deadlines
● A informal type of collaboration
Adam Walczakwww.projektyopensource.pl/ksiazka
Biggest threat in an Open Source project
Adam Walczakwww.projektyopensource.pl/ksiazka
Biggest threat in an Open Source project
FORK
Adam Walczakwww.projektyopensource.pl/ksiazka
Biggest threat in an Open Source project
FORKpropozycja spolszczenia:
FOCH:)
Adam Walczakwww.projektyopensource.pl/ksiazka
Biggest threat in an Open Source project
project death
Incubating Usable0
20000
40000
60000
80000
100000
120000
ActiveDead
Stopień zaawansowania oprogramowania
Num
ber
of p
roj e
cts
Adam Walczakwww.projektyopensource.pl/ksiazka
Organizational structures
● Communities with benevolent dictators
● Meritocratic communities
● In house development, community feedback
● Specification based community process
● Fork
● Umbrela project
● Distribution
Adam Walczakwww.projektyopensource.pl/ksiazka
Communities with benevolent dictator
Adam Walczakwww.projektyopensource.pl/ksiazka
Communities with benevolent dictator
Examples:
● Python – Guido van Rossum.
● Blender – Ton Roosendaala.
● Slackware – Patrick Volkerdinga.
Adam Walczakwww.projektyopensource.pl/ksiazka
Meritocratic communities
● Every day based consensus based decision making
● Votes done when necessary
● Votes are NOT democratic
● Both votes and advances in the communities hierarchy are done in a meritocratic manner
Adam Walczakwww.projektyopensource.pl/ksiazka
Meritocratic communities
Apache Software Foundation
Adam Walczakwww.projektyopensource.pl/ksiazka
In-house development, community feedback
● Mixed practices
● Easy control
● Examples: MySQL, Qt
Adam Walczakwww.projektyopensource.pl/ksiazka
Specification based community process
● Very formal
● De facto develops specifications
Adam Walczakwww.projektyopensource.pl/ksiazka
Specification based community process
Adam Walczakwww.projektyopensource.pl/ksiazka
Specification based community process
Adam Walczakwww.projektyopensource.pl/ksiazka
Specification based community process
Java Community Process
Examples
Internet Standards Process
Adam Walczakwww.projektyopensource.pl/ksiazka
Fork
Full departure
Relationship with the mother project
Symbiosis
Adam Walczakwww.projektyopensource.pl/ksiazka
Fork
● GNOME - GoneME
● GCC – EGCS
● Xfree86 - X.Org
● Debian – Ubuntu
● OpenOffice – LibreOffice
Examples
Adam Walczakwww.projektyopensource.pl/ksiazka
Umbrella project
Examples:
● GNU
● GNOME● ...
● NUI Group
● fundacja Apache
Adam Walczakwww.projektyopensource.pl/ksiazka
Distribution
● GNU/Linux: Debian, Ubuntu, Red Hat, SUSE
● *BSD: NetBSD, FreeBSD, OpenBSD
● Java application servers:
● Oracle Glassfish
● Apache Gieronimo
● Portable Apps
Examples
Adam Walczakwww.projektyopensource.pl/ksiazka
Distribution – Debian example
Adam Walczakwww.projektyopensource.pl/ksiazka
Business models
X: How to gain profits if we give all for free ?
Y: Did we really give all for free ?
X: All our intellectual property ...
Y: Does IT only sell software licenses ?
Adam Walczakwww.projektyopensource.pl/ksiazka
Business models
According to Bruce Perensa from George Washington University art.
The Emerging Economic Paradigm of Open Source
profits from selling software licenses
in the USA only make up to:
25%
of the IT market
Adam Walczakwww.projektyopensource.pl/ksiazka
Business models
● dual-licnesing
● up-selling and cross-selling
● selling related services
● donations
● other business goals which are not directly profitable
Adam Walczakwww.projektyopensource.pl/ksiazka
Getting a client
Rule: 2% of your users generate 95% of your profits
Adam Walczakwww.projektyopensource.pl/ksiazka
Open Source as a distribution model
Open Source generates a lot of business of business risks but is also a light distribution model
Adam Walczakwww.projektyopensource.pl/ksiazka
Dual-licensing
● User segmentation
● Large control over the project
According to the FLOSS Metrics Consorcium5% of open source companies gain profit from this model
Adam Walczakwww.projektyopensource.pl/ksiazka
Dual-licensing
Examples:
Qt MySQL
Founded in the end of 90'
Bought by large IT companies in the last yers
by Nokia for 100 mln $ by Sun for 1 billion $
Adam Walczakwww.projektyopensource.pl/ksiazka
Up-selling
● De facto a selling technique
● Base if open source, a more complex product is closed
● Also known as freemium
● Up-selling + dual-licensing = phased approach
According to the FLOSS Metrics Consorcium12% of open source companies gain profit from this model
Adam Walczakwww.projektyopensource.pl/ksiazka
Up-selling
Examples:
● SugerCRM
● Eclipse:
● JBuilder
● IBM Websphere Studio Workbench
● JBoss Developer Studio
Adam Walczakwww.projektyopensource.pl/ksiazka
Cross-selling
● De facto a selling technique
● Arguments sales of other products
IBM Software Cross Sell Reference Guide
describes 871 products and about 3400 relations among them
Adam Walczakwww.projektyopensource.pl/ksiazka
Selling related services
● Most popular model according to the The FLOSS Metrics Consorcium 29%
● Mostly done by business active in the project, only 2% of the market is occupied by not participating companies
● Service types:
● Certified versions,
● Consulting,
● Support,
● Integration,
● Custom development,
● Training and certification,
Adam Walczakwww.projektyopensource.pl/ksiazka
Selling related services
Examples:
● IBM, Oracle
● Red Hat, SUSE, …
● MySQL
● ....
Adam Walczakwww.projektyopensource.pl/ksiazka
Donations
Free Software Foundation
Mozilla Foundation
Apache Software
Foundation
WikiMedia Foundation
Goals Free software promotion and support
Support of Mozilla projects
Support of meritocratic open source projects
Support of the free encyclopedia
Yearly income 1 mln $ 86,5 mln $ 200 000 $ 8,6 mln $
Founded by companies and institutions
>20% 96,60 % >80 % BD
Personal donations BD 0,05 % BD >53 %
Biggest founders Sun, IBM, HP, Google
Google (about 70%), Yahoo, Amazon
Google, Yahoo, Microsoft
BD
Administration costs 9 % 19 % 5 % 26 %
Promotion costs 10 % 12 % <0,01 % 7 %
Infrastructure costs BD 4 % 49 % >60 %
Development costs BD 62 % 0 % 0 %
Adam Walczakwww.projektyopensource.pl/ksiazka
Not directly profitable business goals
Przykłady:
● Tokeneer System – biometric security system
● Maemo – mobile software stack developed by Nokia. 10 mln lines of code 85% from open source code, 15% written by Nokia
● Google found 70% of Mozillas budget
● loss leader strategy
Adam Walczak - www.adamwalczak.info