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Background Economics Licences’ Strategies Business Models To be continued...
FLOSSA Pick-lock to Open the Market
Massimiliano [email protected]
EconomiX, University Paris Ouest
Paris October, 12 2012
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Introduction
The Non-Senses
For an economist it seems a non-sense that:
people decides to invest effort and time without an advantage
a producer assembles and manages experts to produce aquasi-public good (non-rival & non-excludable)
experts decide to work for free
...this is what happens in the FLOSS
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Economic dynamics
Economics
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Economic dynamics
Formal Institution
All organization structures are based on Formal Institutions:
understandable
accepted
shared
FLOSS licenses represent our Formal Institution
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Economic dynamics
Motivations
Intrinsic Motivation
activity itself (Lakhani and Wolf, 2005; Valentinov 2007)
ego motivation (Lerner and Tirole, 2002; Lakhani and Wolf 2005)
solve particular need (von Hippel, 1988, 2005; Johnson, 2002)
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Economic dynamics
Motivations
Extrinsic Motivation
Monetary
administrative commands and money (Valentinov, 2007)
Non-Monetary
reputation (Lerner and Tirole, 2002)
career concerning (Lerner and Tirole, 2002)
peer recognition (Lerner and Tirole, 2002)
sharing innovation (Harloff et al., 2003)
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Economic dynamics
The extrinsic non-monetary and intrinsic motivations compensatefor a lower salary and incentivise volunteering and donations
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
GNU/GPL
allows to modify, copy and redistribute with or without chargeas long as they reuse the same license
“do ut des”
I give so that you give (in a well-defined way)
persistent: constraint on the redistribution
viral: the union with a program under different license may bedistributed under the GPL
production disconnected from the diffusion
services are disconnected from the product
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
BSD(-like)
allows to be incorporated into proprietary products
allows to license derivative works under proprietary license
much of FreeBSD’s code base is integral part of otheroperating systems such as Apple’s OS X
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
IBM public
it places the liability on the publisher or distributor of thelicensed software code
the idea is to facilitate commercial use of floss
no risk of liability for the contributorsit reassures the customers
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
Netscape public
first commercial license
Netscape can re-distribute external modifications underproprietary terms
mandatory clause because of accords with clients
Mozilla Public License
no special clause for Netscapeit allows proprietary modules in derived projects, but core filesmust remain free/open
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Licenses
What was Netscape’s business model?
Adstremendous amount of downloadsNetscape portal as default browser homepage
ContributionsIBM and other Unix vendors paid to provide a browser
no client... no server!
Supportbug-fixing for customers
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Business Models
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 1/7
Loss-leader/Market positioner
Use open source software to maintain a market position for arelated proprietary software product.
Example
Netscape’s open source Mozilla web browser and proprietary serversoftware
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 2/7
Widget frosting
Sell hardware with open source driver software.
Example
Apple’s MacOS X
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 3/7
Give away the recipe, open a restaurant
Distribute open source software and sell service and supportcontracts.
Example
Suse
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 4/7
Accessorising
Sell accessories for open source software such as documentation.
Example
O’Reilly and Associates
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 5/7
Free the future, sell the present
Sell closed source software with a license that makes it open sourceafter a specified time period.
Example
Aladdin’s Ghostscript
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 6/7
Free the software, sell the brand.
Sell other developers a brand that certifies their implementation ofyour open source technologies is compatible with all others whouse the brand.
Example
Sun’s StarOffice
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
The Magic Cauldron - E. Raymond, 2000 adapted by A. Schiff, 2002
Business Models 7/7
Free the software, sell the content.
Develop an open source product that receives proprietary contentthat the firm sells.
Example
e-Learning platform
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Economies of Scale
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
The long tail
*
* http://www.leftclick.com/blog/online-marketing/chasing-the-long-tailMassimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Local Economy
Firms point of view :
niche markets
starts-up
State point of view :
innovation
funds in the territory
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
It’s so easy?
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
tons of similar and different software
asymmetry of knowledge among different actors
no time...
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Evaluation
* OITOS project in Italy
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Total Cost of Ownership
* local health authority - Rimini - Gambardella Master Thesis 2004
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
costs distributed in 3 yearsFLOSS 1y:
Total e436.262,381 PC e256,62
Closed 1y:Total e946.194,131 PC e556,58
Total Cost of Ownership
* local health authority - Rimini - Gambardella Master Thesis 2004
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Innovation is not an instrument...
...is a strategic variable!
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market
Background Economics Licences’ Strategies Business Models To be continued...
Conclusions
Thank you!
This document is under Creative Commons license 3.0 Attribution -
*picture undercc-by-nd 2.0
Massimiliano Gambardella [email protected] EconomiX, University Paris Ouest
FLOSS A Pick-lock to Open the Market