Strategic Computing and Communications Technology MBA 290C, EECS 201, IS 224, E298A Open source...

StrategicComputing and Communications

Technology

MBA 290C, EECS 201, IS 224, E298A

Open source software

David Messerschmitt

Strategic technology Fall 032

Copyright notice

©Copyright David G. Messerschmitt, 2000. This material may be used, copied, and distributed freely for educational purposes as long as this copyright notice remains attached. It cannot be used for any commercial purpose without the written permission of the author.


Outline

• What is open source and what is its rationale?

• Where does (and doesn’t) open source make sense?

• Open source business models


Discussion items

• Are new forms of intellectual property arising?

• Can software ever start out as open source?

• Is open source applicable to applications?

• Are there unrecognized business models?

• Are there unrecognized licensing models?

• Where do “suits” add value?


What is open source?

• Licensing arrangement

• Community development process

• Populist movement

• Pragmatic response to the make-buy dilemma

• Service-based business model


Software license

• Licensor: owner of trademark, copyright, patent, trade secret

• Licensee: granted right to use

Terms and conditions


Terms and conditions

• Payments• The where and when of use• Modifications• Releases to third parties or commercialization• Risks and liabilities• Representations and warranties• Support, maintenance, upgrades


Generic source code licenses

• Public: free and unconditional• University (e.g. BSD): free, but credit the

licensor• Copyleft (e.g. GPL): free, but no

proprietary products can be based on it• Community (e.g. Java): control and

royalties• Examination: look but don’t touch


General public license

• An original work may be copyrighted provided that distribution terms are added giving everyone the right to use, modify and redistribute the program's code or any program derived from it, so long as the distribution terms are unchanged

• Viral effect for linked binaries


Community development processes

• Enabled by the Internet

• Frequent distributions (for testing) and releases (for using) of source code

• Anybody can examine and test the totality of source, propose source upgrades/fixes

• To avoid forking, governance to choose what is included in distributions


Community development is proven to work well when the software is…

• Widely adopted

• Undifferentiated

• Has many programmers among its users (only programmers?)

• Technically sophisticated


Open source addresses only part of the development process

• Addresses evolution (maintenance and upgrade)• Other necessary elements:

– Original contribution• requirements, architecture, working code

• licensing terms and conditions as basis of governance

– Respected and willing leader

– Support, documentation, training and certification


Open source as populism

• Programmers can create defect-free code and have satisfying careers without– Formal requirements– Schedules– Resource limitations– Patents and litigation– Suits– Speculators and monopolists

• “Open” and “free” are virtuous• Manifestation of free speech


The make-buy dilemma

• Software as infrastructure– More valuable when homogeneous

– Buy is always preferable to make

• Software as integral to organization and process: source of differentiation– Take charge: make it myself

• expense, risk

– The monolith: license common off-the-shelf (COTS)• externally imposed process, undifferentiated, lock-in


Open source is intermediate

Make Buy

Share resources with similar organizationsCentralize support and trainingModify to local needs


Question

• Do you believe that end users can “modify source to match their needs”? What are some problems with this?


Possible answers

• May violate license

• Creates forking, undercutting shared resources

• Every release creates a new integration challenge

• Bottom line: may work if modifications are minimal and mostly extensions


Other (maybe better?) make-buy workarounds

• Open standardization processes: establish reference architecture and interfaces– Open source, commercial, locally developed

modules can be mixed and matched

• Component software– Create a market at smaller granularity than the

monolithic all-encompassing solution


ActivityResults

to produceLevel 1:Just do it.

ActivityResults

to produce

Level 2:Think before you act,and think after you act, just to make sure you did it right.

Planning

Evaluation

input to

to improve

Where do Standards Come From? Software Project Management and

Standards Development

Source: Fred Beshears


Standards Activity Results

to produce

Planning

Evaluation

input to

to improve

input to

input to

Level 3: Establish In-house Process Standards


Use your lessons learned to create

in-house process standards.



to produce

Planning

Evaluation

input to

to improve

input to

input to Product Standards

Set product standards for the results you need and expect, and then create opportunities to get those results

Level 4: Establish In-house Product Standards




to produce

Planning

Evaluation

input to

to improve

input to

input to Product Standards

to improve

Level 5: Adopt Standards from Outside Organizations.

Organizations that create software development methodologies (e.g. Extreme Programming) and/or software product standards.



Organization1

Organization2

OrganizationN

Domain SpecificStandard Setting Organization

Level 6: Establish Standards Setting GroupFor Multiple Organizations in a Domain



Some weaknesses of open source

• Limitations of “technical heroism” as a motivator– Not all (many?) challenges are technical

• Non-programmer users are outsiders– Programmer lack of empathy– Open source lack of usability

• Incomplete as a process– User needs and requirements

• Abandon benefits of intellectual property to recover investments


Beggars roaming the commons

• Civilization allowed specializationCommons bartering money

• Programmer’s motivation– Contribute to the community (of programmers)

– Technical heroism

• Non-programmer users– Non-contributors to the commons; little influence

– Commons provides little attention to needs or usability


Is software strongly differentiated?

• If so, some software may be much more appropriate for open source


Integrative services

Processing Storage Connectivity

Common representations

Generic services

Segmented application services

Diversity of applications


Diversity of applications

Diversity of processing, storage, and

connectivity technologies

Common services andrepresentations

and structures forinformation


Open source sweet spot


Single homogeneous solution adds valueDifficult to differentiateWinner-take-allHighly technical

Emphasis on user needs and usabilityDifferentiated needsDevelopment increasingly automated

Divorced from user needs and usabilityOpportunities to differentiateHighly technical


Open source business model

• Moves from product to service model


Product business model

Series ofversions

/ testing

Productmarketing

Documentation

Distribution

Support

DeploymentIntegration

TrainingCertification


Product revenue

Supplierproduct revenue

Supplier cost of business

Third party service revenue


Product cost

Upgrades priceor

Ongoing subscription

Time and materialsor

Negotiated price

Bundled


Service business model

Communitysource

/ testing

Evolution

Documentation

Distribution

Support

DeploymentIntegration

TrainingCertification

Originalcontribution


Service revenueCreator

Community collectiveresponsibility

Third party service revenue


Service cost

Voluntaryin-kind

contribution

Upgrade feesTime and materials

Subscription


Question

• Can you think of other industries that are built on services surrounding a “free” product?


Answer

• Financial services

• Tax preparation

• Airport transportation

• …


Building a business around open source

• Many models are possible based on different value added and bundling– Distribution (Walnut Creek CD-ROM,

SourceForge)– Integration and distribution of binaries (Red

Hat Linux)– Porting and hardware integration (Linux on

IBM platforms)– Bundling with commercial software (Red Hat)


Building a business around open source (con’t)

– Professional version with derivative enhancements while owning and maintaining open source (Sendmail)

– Bundling in an information appliance with proprietary extensions (Tivo)

– Perpetuate unprofitable commercial software while reducing costs (Netscape-Mozilla)


Building a business around open source (con’t)

– Marginalize a monopoly with a community based alternative (Linux, Java)

– Create an open-source base and build revenue business around it (Java)

– Create an application while sharing development resources (???)


Generic business models

(Source: Fred Hecker, “Setting up Shop”)• Support seller – provide missing elements as

services (Red Hat)• Loss leader – sell commercial enhancements

(Sendmail)• Widget frosting – embed in hardware/systems

(Tivo)• Accessorize – books, documentation, etc.

(O’Reilly)


Generic business models

• Service enabler – downloadable to support an online service (Real Networks)

• Brand licensing – charge to use trademark (Java)• Sell it, free it – start out as commercial, but

offload costs as it loses differentiation (Mozilla)• Franchising – encourage geographic or vertical

markets with branding fees (Java)


Issues to address

• Code sharing with other commercial products (contamination)

• Licensed third-party code (contamination)

• Code sanitization (comments, etc)

• Export controls (cryptographic)

• Supporting infrastructure (tools, repositories, etc)


A few things to remember

• There is free software, but not zero-cost software• Open source eliminates one source of

differentiation for either supplier or customer• Open source obviates exclusion based on

intellectual property• Open source is incomplete as a process• Open source is viral


Discussion items

• Are new forms of intellectual property arising?

• Can software ever start out as open source?

• Is open source applicable to applications?

• Are there unrecognized business models?

• Are there unrecognized licensing models?

• Where do “suits” add value?

Date post:	22-Dec-2015
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Strategic Computing and Communications Technology MBA 290C, EECS 201, IS 224, E298A Open source...

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