TIM Lecture Series – The Business of Open Source

The TIM Lecture Series is hosted by the Technology Innovation Management program (carleton.ca/tim) at Carleton University in Ottawa, Canada. The lectures provide a forum to promote the transfer of knowledge from university research to technology company executives and entrepreneurs as well as research and development personnel. Readers are encouraged to share related insights or provide feedback on the presentation or the TIM Lecture Series, including recommendations of future speakers.

An open source business is a business built around an open source offer.Thus, open source is not by itself a business model; rather, it used by the business as a strategy to strengthen its business model (Bailetti, 2009;timreview.ca/article/226)with open source (i.e., from primarily just using open source assets, to contributing to projects, to championing particular development projects, and finally to collaborating strategically within the ecosystem), whereas a given pattern relating to licensing and architecture typically may be used in all stages (Figure 1).
Examples of open source business patterns discussed in the lecture include: 1. Bootstrap: This use-stage pattern refers to the reuse of existing open source components to develop products.This pattern allows a company to shorten the time it takes to create a first version of their product, while keeping costs low; however; it also increases the complexity of the software and the breadth of knowledge needed.

Contribute back:
By contributing resources (e.g., code, people, money) to the projects they use, companies can: i) build trust with the community, ii) influence the development of the project, and iii) demonstrate their competence.

Credible promise:
When championing a project, building a critical mass of functionality into the project from an early stage can mobilize contributors to a company's project -it helps the company demonstrate that the project is doable and has merit.

Feed the community:
A company can build legitimacy with a project community by nurturing the community without any expectation of immediate return, for example by: i) giving to the community (e.g., contributing code, writing documentation, participating in the discussion forum); ii) establishing a clear licensing practice; iii) establishing a clear process for making contributions; iv) making decisions in the open; and v) not treating community members as prospects.

Sell complements:
An open source product can be monetized through the selling of services (e.g., hardware or support) that complement the open source product.

Run a tight ship:
To keep control of a project's direction, companies often retain full ownership of the code.

Dual product (open core):
To entice commercial users to pay for an open source software product, a company may sell a commercial version of the open source produce with exclusive features.

Pool resources:
To optimize the use of resources in the collaboration stage, a company may jointly develop a common stack of open source assets with other companies.Each company can then develop their own differentiated products based on these common assets.

Foundation: A company can attract other companies
to contribute its open source project by transferring ownership of the code to an independent foundation.A foundation creates an arms-length relationship between the project creator and the project itself, and it centralizes common functions that all members can access (e.g., legal, marketing, project management).Creating a foundation builds trust and facilitates collaboration among the contributors.
Examples of patterns related to licensing include:

Play by the rules:
The risk of a licensing problem arising after a product is released can be mitigated by ensuring license compliance for open source components that are combined.

Dual license:
To encourage commercial users to pay for an open source software product, a company can offer the same product under two licenses: commercial and open source.Non-commercial users still benefit from the rights under the open source license, and buyers of the commercial license are released from some of the obligations of the open source license.

IP modularity:
Alignment of its intellectual property with the product architecture can help a company manage the complexities of having both open source and proprietary versions of a dual product.

Michael Weiss
Examples of patterns related to architecture include: 1. Modular architecture: External contributors may have difficulty contributing if they require deep knowledge of the project.A company can overcome this problem by partitioning the code base so that different parts (or modules) can be worked on and managed independently.

Lessons Learned
In the discussions that followed each portion of the presentation, audience members shared the lessons they learned from the presentation and injected their own knowledge and experience into the conversation.
The audience identified the following key takeaways from the presentation: 1. Patterns help you recognize and find solutions beyond your expertise, and they help you collaborate 10.The value of the disruption that open source represents is threefold: i) it allowed companies to make money in new ways; ii) it enabled software to be produced and distributed in completely new ways; and iii) it reduced the barriers to entry while increasing the potential for collaboration.
11.There is a trend towards the creation of open source toolsets that allow for the early and simple creation of applications.This technical capability enables others to quickly solve real-world domain-specific problems.
12. In the future, we need new ways of innovating around business models.The landscape is now different; we need to look forward and not worry about what did or did not work in the past.
driven by volunteer effort, today most of it is carried out by companies.How companies leverage open source ranges from the adoption of open source development practices, the use of open source development tools, and the integration of open source components into products to active contributions to existing open source projects, and the initiation of their own company-led open source projects.Open source furthermore enables companies to collaborate on the creation of common assets that they can jointly use in product development.

Figure 1 .
Figure 1.Open source business patterns : A governance model and regulatory tools can help manage the quality of complements developed by the community.To conclude the lecture, Weiss speculated about what the future might hold for open source.The discussion focused on the shift away from desktops and servers onto what are -for open source -non-traditional platforms of mobile, embedded systems, and hardware.The role of open source in the "Internet of Things" (tinyurl.com/5qr2nq)was also explored.Finally, Weiss reflected upon the ongoing growth of "open" beyond software (e.g., open hardware, open data, and open science).

" " TIM Lecture Series -The Business of Open Source Michael Weiss
. Typically, open source businesses use open source to: i) develop new products; ii) build products or services around open source offers; iii) initiate their own open source projects; or iv) leverage open source as a form of co-opetition (i.e., cooperation with competitors).Indeed, close study of the way in which businesses have leveraged open source has led to the identification of common patterns used by open source businesses.