Players and driving forces

of the evolving Open Source landscape

and how to make use of them

eLiberatica 2009, Bucharest, May 23

V.MischenkoNLnet Foundation

Amsterdam, The Netherlands

This presentation does not necessarily reflect the official positions of NLnet Foundation

1) Overview types of players, their motivations, financial and other interests in Open Source

2) How they reach their goals by utilizing the interest of the others

3) Reveal the 'Microsoft trick' – earn money by doing nothing

4) Propose the scheme which helps corporates earn / save money and at the same time make our world better

Players and driving forces

of the evolving Open Source landscape

and how to make use of them

"It is not from the benevolence of the butcher,

the brewer or the baker, that we expect our dinner,

but from their regard to their own self interest.

We address ourselves, not to their humanity

but to their self-love, and never talk to them

of our own necessities but of their advantages".

Adam Smith, The Wealth of Nations

Economy is a Value-Adding human activity allowing sustainable growth of wealth(for those having access to restricted resources)

Maker User$

W o r k

Value

Added

Product

Source

Natural & otherrestrictedresources

Changing business model

Proprietary:characteristics the of “War model”

- World as battlefield

- Assault the market

- Kill competitor

- Occupy and defend territory

- Seal all ways out

- Spy (on customer)

- Keep all information secret

- Propaganda as important weapon

- Punish any freedom claims on the occupied territory

Open Source:characteristics of the “Open model”

- World as construction site

- Defend principles

- Encourage to join in

- Discover new free territories

- Open all ways

- Be transparent

- Keep all information open

- Advantages are evident, to one thinking

- Stimulate to take as much freedom as one can endure

Economy will remain the Value-Adding human activity where:

1) growth of wealth becomes more and more dependent on intellectual resources;2) access to these 'new natural resources' cannot be restricted by any concessions.

Maker User€

W o r k

Value

Added

Source

(Semi-finished)Intellectual

product

Creator(Hacker)

Brain

work

Product

- value is being added by participants,

- all participants benefit from their participation,

- new comers are encouraged to join.

Self-sustainability prerequisite:

participants acting out of their self-interest can reach their goals by utilizing the interest of the others.

Every Economy regardless of business models must be self-sustainable:

Who are the main participants nowadays?

- End-user

- Hacker

- Corporate

- Academia

- Public administration

- Product focused foundations

- Mission focused foundations

Private user (early acceptor)

Motivation / Interests: - cost savings;- support an idea, a product or a group doing right things;- interoperability;- addition to own experiments;- lack of proprietor solution.

Commitment: - short-term to zero.

Contribution (-): - testing / feed-back;- donations (“Here are some bucks I can, but you guys cannot miss”)

Earning (+): - cost saving.

Hacker / developer (one of the first inhabitants of the eco-system)

Motivation / Interests: - sharing and learning;- excitement by getting things working and working better; - reputation, positive feedback from users;- being part of community.

Commitment: - mostly short-term to mid-term

Contribution (-): - valuable ideas;- development / testing time;- produce documentation;- train / help others;- own hardware.

Earning (+): - working for companies developing open source technology;- making living out of consultancy, implementation, support, writing documentation;- getting grants and donations.

Corporate

Motivation / Interests: - free basis for their commercial products;- free improvements from community;- development is regarded as internal investment;- influence on the market via standards;- saving on cost of use within the company;- social responsibility / public image.

Commitment: - mostly long-term, to earn back investments made.

Contribution (-): - concepts;- development:

- intra-enterprise development,- extra-enterprise (“award” model);

- infrastructure;- documentation;- offer free support.

Earning (+): - selling 'packaged' open source product;- selling proprietory parts atop of open source;- selling related services and products;- selling knowledge.

Academia

Motivation / Interests: - of scientific research.

Commitment: - to long-term.

Contribution (-): - research;- prototyping.

Earning (+): - government funds for research;- cost saving.

Public Administration (late comer)

Motivation / Interests: - political: independence of foreign supplier, security;- continuity;- save money on commercial licenses;- get rid of vendor-lock;- stimulating scientific research;- establishing standards;- creating local skills and jobs.

Commitment: - long-term.

Contribution (-): - provide funding to developers;- create broader base of users.

Earning (+): - local public budgets;- government funds.

Product focused foundations (e.g. Apache, Blender, Mozilla, NLnet Labs)

Motivation / Interests: - test a vision;- idealistic - help others;- implement exciting idea;- provide free / better alternative to proprietory product.

Commitment: - long-term.

Contribution (-): - vision and roadmap;- ready to use product;- support.

Earning (+): - donations;- get paid for features on-demand;- selling consultancy.

Foundations with mission

Motivation / Interests: - fulfil own mission.

Commitment: - mid-term.

Contribution (-): - cash for research and development;- own network of contacts.

Earning (+): - varying sources.

W

arning !

This l

ooks like

advertisement ! Avertisment !

Reclamă !

Dutch charity fund, which stimulates research and development in the domain of network technology

We are interested in your inspiring ideas!

+ Non-bureaucratic, straightforward and quick application procedures

+ Strict and clear criteria for assessing incoming project proposals

+ No requirements to organisational or legal status of the applicant

+ No requirements to the own capital of the applicant, neither to sponsoring from other sources

+ Great deal of our own technological expertise, as well as reliance on the broad network of experts

+ Dedication to Open Source principles and methods

(end) User

Hacker

Corporate

Product focused foundation

Public administration

Mission focused foundation

Academia

Netto Contributors

Netto Payers

Oper. Systems & extensions,embedded

Standard Applications

SolutionsResearch

Academia

Product foundation

Hacker

Corporate

Services

User

Playground of FLOSS contributors

Average profitability

If you as user need working tools to operate ...

End-user

Corporate

Product Foundation

Public Administration

Academia

- contribute ideas- test- donate

- get semi-finished product (code) for free- customize for fit

If you want something from an OSS project, put your money where your demands are

If you need to earn money ...

As long, as our worldwide economy requires me to pay my bills, I need someone to pay me for my work.

Hacker

Corporate

- customization,- implementation,- training for customized solution,- support,

- apply for donations, but never base your business model upon

keep awake, another noteworthy advise for corporates will follow shortly

If you need to save money ...

End-user

Corporate

Public Administration

Academia

- buy products with OSS- search for applications and features

- actively shop for customization- shop for support- these all might be cheaper than you think

The time of crisis is the time of change – not vendor change, but attitude change!

The message is simple:Acting out of your own self-interest

you can reach your goalsby utilizing the interest of the others

In the language of the hacker:

- If Bob needs something what Alice can make, Bob is ready to pay Alice for that.

- If Alice makes something what Bob needs, she can earn money on that.

This is universal, i.e. valid for both the old type and the new type of business model

Not everything is Economy and Commerce

So, if you have idealistic intentions:

Hacker

Corporate

Public Administration

Academia

- Establish your own Mission- or Product- focused Foundation

- Learn- Teach- Use- Stimulate- Promote- Donate

If you finally have €€ in excess

End-user

Advise to corporates: Learn the “Microsoft trick”

In most countries donations to a charity organisation are deductible from taxation

Microsoft and others do that:

>> Give you software packages to non-profits for free (preferably the most expensive ones)

- No costs involved – reproduction costs for the software nears zero.- Enslave even bigger part of the market and keep competitors away.- Keep non-profits away from Open Source.- Get great public relation without any marketing expenses.

>> Generate cash by doing virtually nothing! (not paying taxes is earning money).

“Microsoft trick” applied within the War model

Apply the “Microsoft trick” to make money and improve the world

Utilize “Microsoft trick” within the Open model !

>> Set up non-profit organisation or use an existing one

>> Donate development hours to this organisation(e.g. your development overcapacity)

>> Develop within these hours great Open Source products (software, hardware, creative work, everything)

>> Release these products to the whole world

>> Make world better and earn money on that!

This works very good in economic downturn, but will remain working for high-days too. Or even better.

Proprietary:characteristics of the “War model”

- World as battlefield

- Assault the market

- Kill competitor

- Occupy and defend territory

- Seal all ways out

- Spy (on customer)

- Keep all information secret

- Propaganda as important weapon

- Punish any freedom claims on occupied territory

Open Source:characteristics of the “Open model”

- World as construction site

- Defend the concept

- Encourage to join in

- Offer new free territories

- Open all ways

- Transparent

- Keep all information open

- Advantages are evident to one thinking

- Stimulate to take as much freedom as one can endure

Make the History – step out of the War model

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Make [code you] Love - Not War !