• If you are citizen of an European Union member nation, you may not use this service unless you are at least 16 years old.

  • Stop wasting time looking for files and revisions. Connect your Gmail, DriveDropbox, and Slack accounts and in less than 2 minutes, Dokkio will automatically organize all your file attachments. Learn more and claim your free account.



Page history last edited by zepter 12 years, 5 months ago

Open Source Business Models: Beyond the Code

Sunday, May 14th @ 12:00pm, South West


MarkKuznicki is planning to facilitate a session at BarCampTdot on Open Source Business Models: Beyond the Code. This is an open and participatory discussion, and all are welcome to contribute to the conversation.


This discussion is being framed in two ways:

  1. Business models around Open Source Software (FLOSS) projects
  2. Business models inspired by Open Source Software projects


Participating? Add your name here:

  1. MarkKuznicki
  2. (EstelleHavva)
  3. MishkinBerteig
  4. DeborahHartmann (scribe: anyone please add to or correct this page!!)
  5. DavidCharles
  6. JonathanResnick
  7. BryceJohnson
  8. DerekSzeto
  9. DanCharles
  10. PaulDowman
  11. ColinMacGregor
  12. PatrickDinnen
  13. BorisMann
  14. MatthewBurpee
  15. SunirShah
  16. Roland Tanglao
  17. JohnSechrest



Questions to be Considered:


  1. Why do developers contribute time/work/talent to OSS projects?


motivations: technical, economic, activist, self-educational/academic. Also social: professional pride (creativity and meaning) and IP protection: pre-empting copyrighting by others (ex: by university tech-transfer offices)

mostly in last 10 years has been funded by competitors of MS. but outside that, the indivitual developers: "turtleneck anarchy"

80% world's OS developers are in Europe (shifting to India etc now) - consider this a political or social agenda - it's a different paradigm (those turtleneck wearing anarchists who can't talk to the suits). US has leveraged these guys...

Yes, they hire one developer and build on the OS base. It's a bit disturbing...

To get attention by being visible, tackling difficult problems the community will notice - makes you a good hire. Also, those who want to build on the OS base will hire the knowlegable person... wino kredyt mieszkaniowy sprzedam mieszkanie sprzedam bilet

motivation differs by type of project...

create the things you need that are missing in commercial software - build what you need


  1. What distinguishes successful from unsuccessful OSS projects?
  2. What kinds of OSS business models exist, how and why do they work?


Wikipedia has a well-documented converstion about how it decided to fund itself.

php - no central body protects the project becaus there is no "head" to "cut off"

Mozilla Firefox browser - to provide opposition to the MS monopoly, and revenue comes from (largely) their branded Google search page. Mozilla corp (business entity) is owned by the Mozilla foundation, board composed of community influencers (social capital). Mozilla is a consortium of multiple competitors combining (funding?) to tackle a big competitor (MS). The for-profit portion allows them to hold capital (in the US). Different in Canada (non-profits must just re-invest).

Models: certification/training (ex: Linux professional institute), certification/compliance, ASP (non-linear growth opp.), publishing/documentation, conferences, OSS as foundation (OSX, Web 2.0), Ecosystem, consulting: customization, installation, support, managerial consulting



  1. What can we say about the present and future competitiveness of OSS business models versus closed source models?
  2. How could other aspects of creation/production adopt the methods of OSS? Should they?
  3. What are the implications of OSS business models on the future of technology and business?


  1. How does the ecosystem work? How does the firm work in concert with the community?


Models: a continuum - symbiotic, commencalism, Parasitic. Does the community define whether there is or is not "giving back", i.e. honoring the spirit of the GPL? TBD Mark what is the source of this list? Please fill in the blanks here :-)

Synergistic: good example is EasyPublish.

Commencalistic: living off the work of others without taking away from it or adding back to it.

Parasitic: Tivo tool OS components and "played games" not to have to give back (not technically in violation of the GPL, but violating the spirit of the GPL - how the community interprets it defines this case). Redhat, changed the structure of projects they wanted to have more control over. WebGUI: Software OS and free, but the doc is $50 and sw is hard to use without the doc... violates the spirit of OS.

Decisions: are we going to open-source X? Needs to be a strategic decision for business purposes. Community ROI - investing in interacting with the community, spending time... but we must ensure that more comes back than goes out.

Why OS it? to earn future revenue on whatever is built on top of it... Platform can't be underestimated...

MS allowed rampant piracy of Windows because it allowed students to learn and get hooked into the platform - a meme virus.

Mozilla: TBD Boris, write something here, I missed a lot of it :-)

Create a product, it becomes a commodity as a basic component of what eeryone is doing.

Disruptive innovation. Undermining the competition, the anti-MS thing... Not a broad target, ignored by the big players... until... but timing is critical (SalesForce disrupted existing CRM ecosystem, then Sugar came along wanting to disrupt SalesForce... Sugar is not growing as hoped).

Jasper reports (Java based business reporting sytem): one guy developed, who accepted patches. Whole project got bought, owner then had part OS and part proprietary products.


Central group can make choices that make it earlier or harder to pull people into the project... promoting the OS paradigm or not. Mozilla turning users into contributors, who also consume what others contribute (synergystic).

eZ publish CMS in php - launched in Norway - hired people, owned copyright. Gives option to relicense because there is a central copyright holder (also, works if all independent contributing copyright holders agree to assign the copyright to a given entity). This allows to distinguish between copyright and licensing. This distinguishes who is able to make changes going forward, define how decisions about the code can happen. This starts to get legal and lawyers can be useful.



Other Comments


There are many business models that work outside the normal SellCode model for software. In a class that I taught a while back, we looked at different models for earning money on the Internet. I think these models apply to the OpenSourceBusinessModel question in general.

Here at the Nine Ways To Make Money On the Internet:

# Get paid to do it - grants, contracts, donations

# Reduce the cost of an existing process that produces money (UPS)

# Increase the sales of an existing product/service (pepsi)

# Sell subscriptions - (porn, NYTimes, WSJ)

# Sell Ads - (google adsense)

# Sell a product directly (Amazon)

# Sell a product indirectly (Amazon affiliates)

# Enable a transaction - (ebay)

# Live on Float - (early pay pal)

-- JohnSechrest





Free/Open Source Research Community at MIT

Open Business


Developer Motivations to Contribute to OSS:








Firm Motivations to Exploit OSS:








Firm Approaches to Open Source Communities (Dahlander & Magnusson, 2005)


  • Symbiotic (firm gains & community gains)
    • often community is firm established (e.g. MySQL)
    • respect norms & values; obey licenses
    • devote personnel to work in communities
    • create and maintain reputation
    • provide fringe benefits
    • provide infrastructure and interaction tools
  • Commensalistic (firm gains & community indifferent)

  • Parasitic (firm gains & community loses)


Business Model Types & Examples


Open Source & Closed Source in Competition




General Notes!!


Centre for Social Innovation in Toronto has an Open Source business model available? (Boris)

(Richard Stallman - an originator of OS - extreme opinions)

Including different OSS products in one app,