Open Source Business Models and Strategies

Research, Articles, and White Papers

about Open Source in general

• What Corporate Projects Should Learn from Open Source - onlamp. Project management secrets of successful open source projects.
• Interview with Debian's Branden Robinson - TUXJournal. Describes the ideas behind Debian GNU/Linux.
• Open Source Moves Up - CIO, November 15, 2005. Open source moves closer to business applications, including ERP, CRM, and BI.
• Open Source: Now It's an Ecosystem - Businessweek.com. Describes the eco-system of open source software and services companies now being funded by venture investors.
• Interview with Gary Edwards of OpenOffice.org - Mad Penguin. Discusses the OpenDocument format, services-oriented architecture, and how it will (hopefully) change the future of your office documents.
• The GNU GPL is Here To Stay - onlamp. Stallman discusses the future of the GPL, specifically GPL v 3.
• Unlocking the Enterprise for Open Source - State of open source software in the enterprise market today.
• Theo de Raadt on Industry and Free Software - A perspective on OpenBSD and OpenSSH: how the project works and why it is under a non-reciprocal license.
• Open Source and the Legend of Linksys - by Heather Meeker. The GPL and how it is policed.
• The Penguin Sees Red - CIO Australia. Open source software movements by the governments of Brazil, Peru, China, and India.
• Community Debates Microsoft's Open Source Agenda - eWeek. What is behind Microsoft's overtures to open source communities? Chances are, all of the motives discussed in this article are valid.
• Open Source - The Brave New world? - by Steve Craggs. Discusses open source software in general and its potential role in business applications.
• Open Source Business Model Design Patterns - Tim O'Reilly. Discusses how open source software should be designed, that the value is not in features but data, and how applications should encourage user participation. Also see this excellent summary.
• Open-Source Referees Change the Rules - eWeek. OSI decisions around open source licenses could be significant for open source business strategies down the road. Stay tuned.
• It's Raining Code - CIO, March 1, 2005. Describes open source cooperatives created by large enterprise users and software vendors.
• Fundamental issues with open source software development - Michelle Levesque for First Monday. Basically, the developers are not thinking enough about their end users.
• Microsoft Releases WiX Toolset to Open Source - Internet News, April 6, 2004 - Microsoft's first open source project.
• The Myths of Open Source - CIO, March 1, 2004. Balanced overview of the realities of using open source in an enterprise environment.
• Open-Source ERP Gains Users - CIO, February 1, 2004. Brief article on adoption of open source ERP systems.
• Your Open Source Plan - CIO, March 15, 2003. Cover story on enterprise adoption of open source software, primarily Linux.
• Linux Inc. - Business Week, January 31, 2005. General overview of Linux and open source.
• BCG/OSTG Hacker Survey - OSTG, 2002. Fascinating study about the motivations and mindset of open source developers. Some of it may be out of date today, but certainly worth reading. Reinforces the stereotypes of The Cathedral and the Bazaar (see below.)
• Something for Nothing - CIO, October 15, 2000. Discusses the concept of user-driven innovation, based upon studies of the Apache project.

about Open Source business models

• The History of the Open Source Movement from a Business Point of View - openeo.biz: History of the Business of Open Source.
• What is an Open Source Business Model? - Roberto Galoppini's popular take on Open Source Business Models.
• FLOSS-based Business Models - A complete classification of FLOSS or open source business models, by Carlo Daffara
• Backcountry.com Bets the Shop on Open Source - CIO Insight, May 2006. Case study of a sporting goods retailer going to open source software for cost but staying for innovation
• The Givers and Takers of Open Source - Information Week, May 15, 2006 - Are big companies just free-loading off the creative genius of open source "hackers"?
• Free Code for Sale - CIO, February 15, 2006. Do CIOs and VCs want fundamentally different models of open source? Do communities like for-profit projects?
• Funding Free Software Projects - Mark Shuttleworth. How does one manage open source developers?
• Commercial Open Source, a Misnomer?. Potential negative reactions to the commercial open source business model.
• Interview with Bob Young. An interview with Bob Young, co-founder of Red Hat. Their secret? Not competing against the other distros but focusing on the opportunity.
• Rimer's Rules for Open Source - BusinessWeek.com. The three C's of open source business models: Community, Commodity, price Cushion.
• Will Profit Motives Fragment Open Source Community?. Indeed. Will it? Our take.
• Difference between Friend and Faux Open Source. Open source should be more than just "free software," and Bernard Golden discusses the importance of real community from a user's perspective.
• How to make money from open source by Con Zymaris. A step by step guide on how to start a business based on an existing open source project.
• Making an Open Source Living, Part 1 and Part 2. The story of an Apache Software Foundation member and developer of Cocoon.
• Seven open source business strategies for competitive advantage by John Koenig. Succint and well-written breakdown of major open source business models with examples. Highly recommended.
• MySQL Open Source Database in 2004 by Christof Wittig and Sami Inkinen. - In depth study of MySQL as a business. Recommended.
• Why I Love Professional Open Source (PDF) by Marc Fleury. - Describes the JBoss business model. Highly recommended.
• MySQL's Quid Pro Quo by Kaj Arno. - Describes MySQL's business model and their fine line of free software.
• Next Decade of Software (PDF) - Courtesy of Matt Asay of Novell. Excellent presentation about the current adoption of open source software and where it is headed in the future.
• The Emerging Economics of Open Source Software by Bruce Perens - Lengthy article about fundamental economic principles of open source software. A bit vague when it comes down to specifics of an open source business.
• The Street Performer Protocol and Digital Copyrights - Originally written about creating public domain artistic works, this article offers interesting ideas about how to finance open source development as well.
• Interview with SleepyCat President and CEO, Michael Olson - Sleepycat may well have been the first company to employ a dual-license business model, and its experiences are discussed in detail here. Highly recommended.

about Enterprise Software (ERP)

• The Enterprise Gets Googled - CIO, May 1, 2006. - Enterprise software has always been inward looking. Will Google and the rise of the "global network supercomputer" crack its facade?
• Oracle Users Group Survey - A global survey by the Independent Oracle Users Group discusses Linux, MySQL, and open source ERP+CRM.
• The Great Enterprise Applications Race, December 2005 - Managing Automation. The race between SAP and Oracle.
• Open Source Hype, April 2003 - Managing Automation. Does the open source community possess the knowledge and support strucure for business applications? This article doesn't think so.
• The Post-PeopleSoft Landscape - CIO, June 1, 2005. - Is ERP a commodity? Do CIOs no longer need the upgrade-maintenance-support cycles of the past? Will SOA replace the monolithic ERPs of the past?
• Extreme ERP Makeover - CIO, November 15, 2003. - The trend towards consolidating enterprise applications. As is typical of the publication, a balanced perspective.
• Kiss Your Apps Goodbye - Baseline, October 1, 2004. - Reducing IT costs by reducing the number of deployed applications. Some dramatic statistics.

academic research about open source

This is a selection of some outstanding academic research that has been done on open source software. For a more comprehensive list, see opensource.mit.edu.

• A Case Study of Open Source Software Development: The Apache Server by Mockus, Fielding, Herbsleb, 2000. - In-depth analysis of organization and processes behind the Apache httpd project, with quantitative statistics on defects, defect resolution, and developer productivity. (A more comprehensive version on Apache and Mozilla was presented at a conference.)
• Open Source Software Development by Greenberg, 2003. - Almost passed this one over because it is an undergraduate thesis. A very thorough analysis of open source and case studies of Apache, Mozilla, IBM, Microsoft (yes, you read it right), and Red Hat. Discusses history and business motivations.
• Open Source Community Building by Matthias Sturmer, 2005. - A massive (153 pages long) doctoral thesis on building open source communities, with best practices defined in the Conclusions section (page 102) and about 40 pages of interviews with open source project leaders. (This paper really is in English, even though the first pages are in German and French.)
• The Ecology of Open Source Software Development by Kieran Healy and Alan Schussman, 2003. - Examines the high rate of failure amongst open source projects and hypothesizes that successful projects require a combination of professional developers, management hierarchy, and an evangelizing force.
• The Economics of Technology Sharing: Open Source and Beyond by Josh Lerner and Jean Tirole, 2004. - A sweeping overview of the history, economic motivations, legal issues, and policy considerations behind open source software.

Open Source Business Blogs

• Commercial Open Source Software blog. - Blog by Roberto Galoppini specializing in the business of open source.
• Carlo Daffara's blog. - Blog by Carlo Daffara of FLOSSMETRICS.
• Matt Asay on Open Source. - Blog by Matt Asay of Novell, Novell's open source evangelist.
• JBoss Blog. - Blogs by the JBoss team.
• Kaj Arno's Blog and The Open Force - Open Source business blogs from MySQL.
• Jonathan Schwartz's Weblog. - Sun Microsystem's CEO is an advocate for open source and commercial software.
• Once More into the Breach. - Blog on open source, intellectual property, etc.
• Mitch Kapor's Weblog, Kapor's Work In Progress. - Founder of Lotus, open source advocate.
• The Enterprise System Spectator. - Not really about open source, but simply outstanding.
• SpikeBlog - An interesting blog by SpikeSource about open source and software in general.
• Open Source Strategies blog. - Our own blog/newsletter.

Recommended Books

about Open Source

• Open Source Licensing by Larry Rosen. Excellent book on open source licenses with in depth analysis of major open source licenses.
• Understanding Open Source and Free Software Licensing (online version). More focused on paraphrasing and describing the open source licenses, with some additional material at the end. Very readable.
• Open Sources (online version). An excellent compendium of essays by the major open source leaders, including Torvalds, Stallman, Raymond, O'Reilly. A bit older now and somewhat quaint (especially the references to SCO), but definitely well worth reading. Features a great essay by Bob Young, co-founder of Red Hat.
• The Cathedral and the Bazaar (online version) by Eric S. Raymond. Most cited book about open source. In light of the increasing roles played by major software vendors in open source projects, I'm not sure I agree with his theory of how open source software is created.
• Suceeding with Open Source by Bernard Golden. Describes the Open Source Maturity Model, a comprehensive analytical tool for evaluating open source projects. Very useful resource for developers, users, and investors.
• The Success of Open Source by Steven Weber. A socio-economic expose on the open source phenomenon. Theoretical and very long.

Also see O'Reilly Open Books for other books on open source.

about the Software Industry

• The Business of Software by Michael Cusumano. A must read. In depth analysis of the software industry, from production to marketing to financial analysis, drawing on Dr. Cusumano's extensive research at MIT and consulting assignments with major software companies.
• The Mythical Man-Month by Frederick Brooks. Most frequently cited book on software development, from the building of the original IBM OS/360. Still relevant after forty years.
• Direct from Dell by Michael Dell. Dell's story of how he focused on the customer and created a strong, successful business first, before raising capital or going public.
• Who Says Elephants Can't Dance by Lou Gerstner, Jr. With his outsider's perspective, Gerstner revitalized IBM and helped spark corporate adoption of Linux and open source.
• High St@kes, No Prisoners by Charles Ferguson. Want to know what a startup is really like?
• Startup: A Silicon Valley Adventure by Jerry Kaplan. Another CEO's startup story.

about other related topics

• Coming to Concurrence by J. Walker Smith. Talks about the general trend across many industries of consumers participating in the brands and products they use. Sound familiar?
• The Support Economy by Shoshana Zuboff. A very long book about how the economies of the future will be centered around decentralized groups which support its members. CIO magazine published a succint summary which is worth reading.

Open Source Links

• Open Bar. Non-profit legal group for open source community.
• opensource.mit.edu. Meta-site for academic research on open source.

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