Open for Business - Open Source Inspired Innovation

Jaap Bloem | Menno van Doorn | Erik van Ommeren

Open

for Business Open Source Inspired Innovation

Research Institute for the Analysis of New Technology VINT | Vision • Inspiration • Navigation • Trends

Open for Business Jaap Bloem | Meo a Door | Erk a Ommere

Open Source Inspired Innovation

2007 vint | Vso • Isprao • Nagao • r reds eds Research Isue for he Aalyss of New echology Soge Group

Tis work is licensed under the Creative Commons Commons Attribution-No Derivative Works 3.0 Unported License. o view a copy of this license, visit http://creativecommons.org/licenses/by-nd/3.0/ or send a letter to Creativ Creativee Commons, 543 Howard Street, 5th Floor, San Francisco, California, 94105, USA . We would like to thank the following for permission to use visual material: Brewtopia, BzzAgents, Cambrian House, ChicagoCrime. org, John Fluevog, Fast Company , Lego, Loughborough University, Nick Lowndes (Eastwing), Sun Microsystems and Treadless.

2007 Research Isue for he Aa Aalyss lyss of New echolog echologyy vin vint t translation copy editing production book design printing binding

Rober Olse George Hall ad Susa MacFarlae LINE UP boek e meda b, Groge (he Neherlads) Ja Faber Bare, Rue (he Neherlads) Abbrgh, Groge (he Neherlads)

ISBN 978-90-75414-19-6

Te Rise of Crowdsourcin Crowdsourcingg “Now the productive potential of millions of plugged-in enthusiasts is attracting the attention of old-line businesses, too. For the last decade or so, companies have been looking overseas, to India or China, for cheap labor. But now it doesn’t matter where the laborers are – they might be down the block, they might be in Indonesia – as long as they are connected to the network.” Jeff Howe in Wired Magazine , June 2006

“Just as it is now impossible to think about getting things done without at least considering the role that could be played by the internet, so will it soon be impossible to think about how to solve a large social problem without at least considering the role of methods originally and unintentionally pioneered by volunteer programmers just trying to build a better program.” Demos, think tank for everyday democracy, Wide Open, Open Source Methods and Teir Future Potential

“Te disruptive effects of the open source production process could be as great or greater outside the information sector, at first simply because of the increased efficiency of information processing that will effect effe ct many other economic activities, and second because of the spread of the model of production itself to other sectors of the economy.” Steven Weber, professor at the University of California, Berkeley and director of the Institute of International Studies

Contents

Foreword 1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 3 3.1 3.2 3.3 3.4 3.5 3.6 3.77 3.

9

Te relationsh relationship ip betwe between en open source andopen innovation Ope source has may faces See charac characers erscs cs of ope source Ope source spra sprao o for oao Crowdsourcg Te oul oule e ad sruc srucure ure of hs book

13 15 18 22 27 34

Open innovation – the new trend Ioao wr wr  large Value creao wh ope oao Hae ohers do he work Produc oao  he age of codg Ope oao s somehg y ypcal pcal of our geerao Webserces: lgh-wegh sofwa sofware re for busess oao Ope oao a Ama Amazo, zo, Google ad eBay Ope oao a oyoa Ope oao a Procer & Gamble Ope oao  seekerseeker-soler soler eworks Ope oao  he press Ope oao  aders adersg g ad marke markeg g Ope source beer from Brewopa Ope oao a Boeg Ope oao  buld buldg g ew compuers Ope oao à la CrowdSpr Ope oao a Wk Wkpeda peda Coclusos

41 43 46 48 50 57 61 63 67 70 71 73 74 77 80 80 82 84 85

Te software market has taken the lead Ope source has rasfor rasformed med he sofwa sofware re porfol porfolo o Te busess model of he org orgal al ope source orgaz orgazaos aos Te esabl esablshed shed order ad he ew wae ge ogeher Mcrosof: he faore arge of he “ope source moeme” Oracle does o bele belee e  ope source busess bu sl slll buys he compaes IBM s a ope source eagel eagels s wh eormous closed source eress HP specalzes  hardware hardware ad serces, serces, ad sezes ope source source opporues opporues

95 97 100 105 106 111 114 116

3.8 Su produces s ow hardware ad sofwa sofware re plaforms, compees wh Lux, Lu x, ad s pro-ope pro-ope  source 117 3.9 Coclusos o ope oao 121

4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10

What motivat motivates es an open source community? Ope source sofwa sofware re does o ad ca eer amou o much Hackg Hack g ope source ad he passo of he d ddual dual Who are hese ope source deelopers? Is here a aboo agas makg moey moey?? Ope source deelopers wa o belog o he commu commuyy I hs gf gf ecoomy ecoomy,,  s a maer of ge ad ake Te gf ecoo ecoomy my s a famly affar Te ulmae kck kow as “flo “flow” w” s he clcher Why ope source s a rush Cocluso

127 128 130 132 134 136 138 140 142 146 147

5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8

An open source cultu culture re is better Ope source: a cul culure ure  whch eeryoe seems o be dog somehg “Mer” s cruc crucal al ad users are oled owards a ope source cul culure ure  he sofwa sofware re deelopme secor From sofwa sofware re egeer egeerg g o ag agle/ope le/ope source sofwa sofware re deelopme Sofware Sofwa re egeer egeerg, g, compoes ad he huma dmeso Ope source sofwa sofware re deelopme  compaes Dffereces amog radoa radoal,l, ope ad ag agle le sofwa sofware re deelopme Cocluso

151 153 157 158 161 164 166 168 170

6 6.1 6.2 6.3 6.4 6.5

How open is the future? Publc ersus prae Neher me or yours, bu publc doma Permsso cul culure: ure: “ope” uder aack Prae plus publc  he sofwa sofware re secor Cocluso

173 173 175 181 185 187

7 Tirteen lessons for open innovation Idex

8

189 195

Open for Business

Foreword

Open Up to the Crowd!

I was workg for Red Ha  2001. We were o a corporae golf day wh mpora cles cl es ad dog our far share of drkg dr kg he  he sposor’s sposor’s beer. beer. I was o he sxeeh hole ha h a I made he ery presumpuous saeme ha he “premum” beer we were drkg was oerprced, badly markeed ad ased ee worse, ad ha I could do beer wh my eyes closed for ex o ohg. O ha ery hole a Alber Park Golf Course  Melboure Ausrala he course of my lfe chaged foreer. Afer spoug o all who would lse ha eeg, I awoke he ex morg wh a heay head ad ee heaer challege: How do I ge some cusomers (who do’ exs), o demad dema d my beer (whch I hae’ eed ye) from my compay (whch hey’e eer heard of) whou spedg ayhg ayh g o adersg adersg or radoal markeg, whou ay experece  he dusry, whou a brewery or ay dsrbuo les, ad ye be profiable? Of course he soluo was all aroud me. People. People. All I had o do was se up shop  my cusomers’ mds! Le hem hae ulmae corol – le  be her beer compay, o me! Tey make he decsos – I jus eac her srucos sr ucos!! I had see he Lux Operag Sysem sar ha ery way, wh he kerel beg hrow h row ou o mllos mll os of program programmers mers aroud he world world o mproe, sablze, ad ulmaely commercalze hrough guys lke Red Ha. A y drop of waer makes o de o he ladscape, bu ml los of radrops ogeher ogeher ca raze mou mouas. as. Te ask for me was collecg collec g he “radrops” ad geg hem all flowg  he same dreco. Te oher challege chal lege was ha o oe oe had doe h hss ype y pe of crowdsourcg ousde of he sofware dusry, ad ceraly o wh ay agble goods. Crowdsourcg as a s a erm had’ h ad’ ee bee eed. So oer he ex wo years I used a ficoal beer I called Blowfly as my “per-dsh “per-d sh”” o experme exper me wh coceps ad deas deas ad sudy he resuls. resuls. Sarg wh a daabase of oe hudred ad hry freds ad relaes, I jus hrew  a hem!  hem! Of course eghy fie perce of ha blew up  my face, bu he expermes ha worked became he bass of our busess oday. I was a markeg experme ha we horrbly rgh! From hs came my “7 P Beer Pla”: may of he pos/ps lsed o some degree are par of all successful crowdsourcg ad ope source

9

busess models, ad may more are coaed wh he marellous book you are readg read g ow. Pint 1. Do It Wrong! Rewrite Rules of Engagement

Udersad he rules of egageme  your dusry he break hem all! If  feels wrog/ucomforable, you’re o he rgh rack! We bul our busess backwards. We sold a “rual beer,” go poeal dsrbuo, ad oly he worked our produco o mee demad. We lowered coss of acquso ad me cusomers’ eeds ha were o beg me by he cumbes. Pint 2. Polarize: Be Controversial

If o oe haes you he o oe loes you. Rejeco s o your bgges hrea o success – dfferece s. Sop ryg o ge eery cusomer. Focus o he oes ha loe you ad are emooal abou your produc or compay. Pint 3. Lift the Kilt and Let Tem Have a Fiddle

Ge Hjacked! Le your you r cusomers behd he  he scees ad ge ge hem oled  he deelopme of he produc ad sraegc dreco of he compay, he AC o her wshes. Ge hem boh emooal ad fiacal owerow ershp f you ca. We gae all our members who oed a rgh o a share  he compay were we eer o go publc  he fuure. Pint 4. Embrace Ambivalence

Look a your busess upsde dow ad back-o-fro all he me. Busesses are old o o be ambguous bu cosse, clear cu ad wh fixed posos. Ts s  s creasgly ueable  oday’s profoudly profoudly paradoxcal world, so embrace ambalece ad you wll foser a larger, more robus ad sable busess hrough your cusomer base. Pint 5. Embrace “Incongruent Consistency”

Pop up where you’ you’re leas expeced. ex peced. You You wll w ll sad ou more, arac more eyes, ad f he messages ad e of he busess are rgh, you wll arac he people you’re you’re lookg for for.. No beer compay has eer adersed  a premum fasho magaze, bu we dd. We’e doe so may cogrue sus ad aces ha people ow expec he uexpeced of us. Pint 6. Give Recognition

Forge echology, Vral, Vra l, Buzz Buz z Programs, Progra ms, Affi l laes, aes, SEM etc. Tey’re all secodary ad all chage a lgh speed. Wha does’ chage ad has’ for 5,000 years s huma psychology. Kow wha makes hem ck ad buld your busess owards . Buld curosy cur osy.. Buld a commuy of lkel kemded folk ad recogze recogz e hem publcly whe approprae. Look aroud

10

Open for Business

a he people clamorg clamor g o be famous. We all loe recogo recog o as a race, so use   your crowd. Pint 7. Suck Less

Ts s o cofied o ope ad crowdsourced busesses per se, bu  s a rule ha s esseal for success. success. Busess ad self-help books are geerally abou beg beer a somehg. Problem s, we do’ kow how o be. We hae bad habs; we focus o he egae (wha we do’ hae or wha we are o). So why o use ha as a ool? A Brewopa, we do’ ry o be beer, jus less worse ha our compeor, less worse ha we were yeserday.. If we are fie perce less worse  hree yeserday h ree areas of our busess, bus ess, he effec s compouded by more ha he  he fifee perce  hose areas parlayed. We eer had a book o ell us how o be “Ope for Busess,” lke he oe you hae before you, whe we sared Brewopa. Bu I was here a he bleedg edge, deelopg robus ees ad prcples. pr cples. So from firshad experece I hae dscoered ha, whe appled correcly ad wh dlgece, he pracces ad lessos descrbed  he ex see chapers wll ceraly help you  seg up successful ope source ad crowdsourced busesses. Liam Mulhall CEO Brewopa Lmed

1 • Foreword

11

1

Te relationship between open source and open innovation

Tis book explains why and how “open source” and “open innovation” are converging. In the context of sof tware development, we know of open source as an inspired manner of collaboration among motivated individuals working in “communities.” As a concept we know specifically from product development, open innovation is an extension of traditional R&D. Te new term for the convergence of both is “crowdsourcing”: an appropriate marriage of the terms “(out)sourcing” and “crowd surfing.” What this means is that “Te productive potential potential of plugged-in enthusiasts is attracting the attention of old-line businesses. It doesn’ doesn’tt matter where the laborers are, as long as they are connected to the network.” Tis is the way Jeff Howe puts it in his groundbreaking article “Te Rise of Crowdsourc Crowdsourcing,” ing,” which appeared in the June 2006 edition of the monthly magazine Wired. Te central concept of crowdsourcing will be discussed in further detail in Section 1.4. raditionally, R&D is the source of innovation. Companies, particularly large ones, have always painstakingly conducted R&D on their own. Tey sought patents on inventions in order to introduce their own unique products to the market. If necessary, and often only after a great deal of time, licenses were issued to cash in on discoveries. If market standards were involved, involved, as in the case of the DVD , collaborations followed, and ultima ultimately tely consolidation into competing consortia. Nowadays the situation remains more or less the same, although it is even more involved. Besides the company’s own R&D as a “source” of “innovation,” we are running into “open source” and “open innovation” ever more frequently. In addition, “open source” and “open innovation” are merging and consolidating. In both cases, this “openness” is based on an unusual form of collaboration that contrasts with the traditional way of doing things.

Ope source (ope source code) deres from sofware deelopme, where -house (propreary) deelopme had bee he orm ul recely. Ope oao orgaed  produc deelopme (alog wh he assocaed serces) ad oles a sroger collaborao bewee compaes, kowledge sues, ad oae users. For boh ope source ad ope oao, he PC, PC , ere, ad he approprae collaborae ad smulao sofware are esseal. esseal. Te suppor supporg g sofware comprses a mx of readly usable mulmeda sa-messagg, emal, groupware, workflow CAD/ CAD/CA CAM M, etc.

13

Te seadly creasg egrao of sofware o huma acy ad, cosequely, cosequely, o busess oao explas expla s he growg grow g eagleme of prcples ad bes pracces from sofware sof ware deelopme wh hose of ope oao for produc ad assocaed serce deelopme. Converging openness

Eery player oled  he purely propreary sofware deelopme of e years ago ow embraces ope source as a useful usefu l suppleme suppleme o radrad oal sofware deelopme pracces. Ad eery radoal R&D deparme s currely parcpag par cpag  ope oao. I he mds of all hs acy, may flourshg commues ad compaes are ow adopg a mxure of pracces from ope source ad ope oao. Somemes hs egrao occurs  coeco wh markeg (here s ohg wrog wh ha, as markeg s a esseal grede for success), success ), as exemplfied by ope source shoes. Oher O her mes, we fid clearc learly alrusc aes, such as  he field of ope source pharmaceucal research. Commuy spr s a mpora commo deomaor  boh ope source ad ope oao. Te ews cocerg commercal uly are que derge, derge, howeer. howeer. Obag marke share s some somemes mes he drg force behd a “free” polcy. Bu o he more coserae R&D sde of hgs, h gs, cleer hadlg hadl g of paes paes sll s ll plays a large l arge role. Now Now ad he, hs meas ha sofware compaes release paes ad programmg. Tey do hs  order o curry faor wh cusomers ad wh he ope source commues commues  queso, ad ofe also al so o be rd of hgh ogog deelopme deelopme coss ad o acqure acqu re beer sofware sofwa re ersos more quckly. I produc-maufacurg secors, Procor & Gamble s jus oe of may compaes ha hae, for a lle whle, bee praccg a much less proece proece pae polcy ha hey had    he pas, ad a d reapg reapg a grea g rea deal of profi as a resul. Ts T s coergece coergece of “ope source” ad “ope oao”” promses o be a oao a  mpora feaure of our fuure. Inspiration from open source

Te am ad he core of hs book s o draw sprao from deelopmes  ope source sofware ad apply  profiably o busess oao. Ayoe ufamlar ufaml ar wh he  he produco produco of ope source source sofware wll wl l surely dsmss hs as a wld faasy. Afer all, oao s ypcally fraugh wh he dager of oer-ehusasc waes of freedom ad euphora. I would seem o be he las hg o whch he osesbly ucorolled model of ope source sofware produco ough o be appled.

14

Open for Business

A firs sgh, ewed from he perspece of he radoal orgazao, he commual characer ch aracer ad he o-commercal o-commercal approach of may ope source projecs projecs may look suspcously uruly. ur uly. Bu realy proes oherwse. IBM has esmaed ha s sofware produco could become 30 perce more effice by cula c ulag g a ope source culure. culu re. Ts culure c ulure ca oly hre h re whe sofware s cosruced  modules. Te relaoshp relaoshp bewee he fores ad he rees mus be crysal clear, or else deelopg commues may lose her dreco ad persoel may be uable o esure he couy of her work. I fac, ope source meas esurg ha he ales of programmers, esers, etc. are properly ul ulzed zed ad ha he eam fucos f ucos a s hghes leel. I redseg ope source projecs, such as Lux, Apache ad JBoss, here are leaders who make decsos; here s clear commucao; goals are made explc, expl c, ad here are ofe well-descrbed processes ad procedures. Messg aroud s o really allowed. Eery mproeme s ealuaed, ad f here s dsagreeme o some po,  s clarfied  umsakable erms. Wha cous s he resul. As a cosequece, ope source does o mea a ucorolled ad uruly process;  s syoymous wh precse kowledge of wha you are dog, ad wh eamwork  whch people kow her role ad udersad her place. Compeo amog he members of a ope source commuy o record he bes resul srogly affecs he qual y of he sofware produced. Te 23 perce growh of Lux o he serer marke  2005 (compared o 4.4 perce marke growh) would o hae bee possble whou sold ad raspare ra spare produco maageme.1 Nearly hree quarers of all websererss ad herefore early webserer earl y all al l ere er e raffi ra ffic operaes o ope source sofware. Due o he success of he ope-produco model  he sofware dusry,  has become worhwhle o esga  esgae e he possbly possbl y of usg such a model for oher busess oaos.

1.11 Open source has many faces 1. Ts book wll deal wh all he specal characerscs of a ope source process. Te mos mos basc eleme s emphaszed: he  he fac ha exper ex per users gude he oao ad produco of sofware, ad herefore, here s o clear dsco bewee producer ad cosumer. Ehacemes by exper users ca mmedaely exper m medaely be cluded  ew produc ersos, a possbly ha s obously here  he agble aure of sofware. Elemes of ope source are also foud  oher segmes seg mes of orgazaos ad of ere secors. Noe of hese are as far adaced as  he sofware dusry,  dusry, where ope source source has compleely alered he marke. Sll, a begg has bee made; may promsg examples exs, ad expecaos are ha hs red wll coue.

1 • Te relationship relationship between open source and open innovation

15

Ts book wll show how ope source has chaged he sofware secor, wha he prcples behd  are, ad how hey are beg appled elsewhere. Te eo s o lear from hese examples ad o re-exame he coeoal process of oao, as he coued spreadg of ope source culure ousde of he sofware dusry has mmedae cosequeces for he maer  whch producs ad serces are creaed. A ew ype of oao s emergg, spred by wha has already happeed  he ope source sofware sof ware moeme. Te power of open source

Ts book could hae sared by meog ha NASA dared o sed s Pahfider o Mars wh a srog dose of ope source sofware  crcal oboard sysems. Problems wh he sofware would hae mea a rreersble falure for he ere projec. 2 Would’ Would’ NASA hae h ae ake oly he mmum of rsk r sk wh such a bllo-do bl lo-dollar llar proje projec? c? Edely, Edely, ope source sofware s capable of workg a he hghes h ghes leel ad, hece, does o eed o be defeded. “Ope” s o opposed o “closed.” Ope source has ow bee acceped hroughou he sofware dusry ad embraced by all “closed” parcpas, cludg Mcrosof. Sll more mporaly, he success of ope source  he I secor has bee smply a queso of oercomg al opposo. Combg he adaages of “ope” ad “closed” has made he dusry sroger. Ope source sofware has proe self. Ope source culure, he lfesyle surroudg he maufacure of ope source sofware, s emergg as a rgug opo ha s aracg aeo ousde he sofware dusry. A ope source maer of dog dog hgs, h gs,  ay of s arous mafesaos, s becomg more he rule ha he excepo. Cosequely,  comes as o surprse ha hs ope maer of producg sofware sofwa re was a source of sprao for a more geeral opeess: ope oao. Ts book s o prmarly cocered wh wha ca ow be doe wh ope source sofware. I s o focused o ay ed produc, be  a operag sysem such as Lux, Lux , ERP sofware sofwa re such as Compere Compere or a daabase such as MySQL. We are eresed  he prcples uderlyg ope source: how  came o beg, wha moaes users o ake par ad how such classc marke players as Mcrosof ad IBM are hag o deal o jus wh ope source commues bu wh a ope source culure sde her ow orgazaos. Te core of hs book s ecompassed by he words “busess” ad “oao.” Our heory s ha he exraordary mpac of ope source o he sofware dusry wll also spread o oher ecoomc secors.

16

Open for Business

Innovation à la Henry Ford

Ope source sofware has acually become raher commoplace, f we cosder he qualy of he producs, he serces surroudg hem ad he growg marke share. Te specal sgficace of ope source sems from he eormous chage ha  has produced ad sll produces  he sofware dusry. Rapdly growg ew compaes hae surfaced, alog wh ew parershps bewee radoal ad purely ope source players, as well as ope source aes uderake by he radoal players hemseles. I sofware deelopme, marke oao goes had  had wh ope source. I Calfora, Professor See Weber, whose ame wll appear seeral mes  hs book, descrbes ope source as oao à la Hery Ford. Ope source also has somehg o do wh he maer  whch hgs h gs are produced. produced. Te produc produc self (be  a car c ar or, as  hs h s case, sofware) s perhaps o so oae;  s he way of makg  ha represes he rue oao. I hs book Te Success of Open Source, Weber pus  hs way: “If I was writing this book in 1925 and the title was Te Secret of Ford, the argument would be about the factory assembly line and the organization of production around it, not about the car per se. Once we are talking about a production process, a way of making things, then the story is potentially of much greater importance than simply to a few specialists. Processes spread more broadly than do artefacts. oyota pioneered lean production in a factory that made cars. 20 years later this way of making things had spread broadly throughout the industrial economy. Similarly, open source has proved itself as a way of making software. Te question becomes, what are the conditions or boundaries for extending open source to new kinds of production, of knowledge and perhaps of physical (industrial) goods as well?” Steven Weber, 20043

Tere sprgs o md oe obous smlary smlar y bewee he ew produco produco mehod poeered poeered by Hery Her y Ford ad he way  whch ope source sofware s creaed: he dusres affeced by hese chages were ad are radcally alered. Te assembly le ad mass produco sparked grea chage  he auo dusry. Cars became so cheap ha “he commo ma” could afford oe. Te sofware dusry has also bee radcally rasformed by a mehod of produco. Ts produco process ad s characersc ope source culure are forcg sofware producers producers o recosder her sraegy ad maer of workg.


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1.2 Seven characteristics of open source Before gog o he lessos ha ca be leared abou oao from ope source, le’s firs cosder wha ope source s, exacly. ex acly. I has see dsc characersc c haracerscs, s, sarg sar g firs wh he fac ha  s he users who who ake he lead  oao. Tree dduals desere specal cosderao  hs regard. Te firs s Rchard Sallma, he perso who acually sared  all. Frusrae Frusraed d wh he fac ha sofware users were prohbed from accessg he sofware code because compaes waed o make as much moey as possble from f rom sofware, sofwa re, he fouded he Free Sofware Foudao (“free”  he sese of “lberaed”). Te moeme deeloped a ew ype of copyrgh o proec users who waed o parcpae  sofware oao. Laer, Bra Behledorf , he secod perso o our ls, worked wh a umber of ohers o deelop Apache webserer sofware, oe of he mos successful ope source sofware producs o dae. Behledorf he used hs kowledge k owledge ad experece o lauch a collaborae plaform called ca lled CollabNe: hudreds of housads of people ow work o ope source projecs o CollabNe. Number hree o he ls s Erc Er c Raymod. Ray mod. He smoohed smoohed ou he rough edges  he moeme sared by Rchard Sallma, producg refiemes ha eormously smulaed he furher fur her commercalzao of ope source. Nota bene

Te seven characteristics mentioned below are closely related to the thirteen lessons of open innovation that collectively constitute the concluding chapter of this book. Te reader could simply adopt all twenty without going any further, but that would miss the case histories and the analysis contained in the five intervening chapters. Instead, the impatient reader could obtain an overview by reading Section 1.4, which briefly sketches an outline and describes the structure of this book. Characteristic 1: Special licenses ensure that everyone can access the source code; they also protect the community of developers

A persse malfuco  he paper feed of a laser prer  he Arfical Iellgece Laboraory a MI played a mpora role  he geess of ope source source sofware. A programmer amed Rchard Rcha rd Sallma waed o resole he problem ad requesed he source code from Xerox, he suppler.. A he begg pler beg g of he eghes,  was o uusual  he  he academc world for users o correc appare flaws  he freely accessb accessble le sofware source codes. Howeer, Howeer, hs h s me Xerox refused o prode pro de he source code. Sallma, Sallma , howeer, howeer, who fel ha users had he fudameal rgh r gh o lear from sofware ad o creae ew hgs wh , opposed he Xerox sace. He was cocered ha he source code of sofware o whch a commuy

18

Open for Business

of users had made mpora corbuos was o loger commually aalable. I 1985, Rchard Rch ard Sallma Sall ma se up he  he Free Sofware Sofware Foudao (FSF FSF). ). Is Is purpose was – ad sll sl l s – o proec he rghs of sofware deelopers who who waed o work collecely o make sofware ad euralze eural ze he rsk of copyrgh copyr gh clams cla ms by hrd h rd pares. Terefore Terefore he FSF deeloped deeloped a ew ype of corac called he  he Geeral Publc Lcese (GP (GPL L). Ts became commoly kow as “copylef”  coras o he  he sadard “copyrgh.” I effec he GPL proecs proecs he rghs r ghs of sofware makers whle allow allowg g users o freely buld upo he producs. Free sofware bega o floursh – sofware delered alog wh a source code ha eeryoe could lear ad use o creae ew ersos, or ee ew sofware. I was a breakhrough whe Lus oralds oralds obaed a GPL for he Lux operag sysem  order o reassure “hs” Lux commuy ha whaeer hey dd would rema freely accessble ac cessble o eeryoe. e eryoe. Varous y ypes pes of GPL are ow he offi ca call bodg agreemes for parcpao  ope source commues. Characteristic 2: Users take the lead in the development of new software

A he begg of he ees Bra Behledorf, a youg sude a Berkeley, was kerg ker g wh he webserers  hs busess bus ess school’s compuer lab. Hs sklls were recogzed by some of he people a he magaze Wired , who subsequely ed hm o se up he ery firs ole magaze: Hot Wired . For hs webse, Behledorf Beh ledorf used a ope source program from f rom he Naoal Ceer of Supercompug Applcaos (NCSA ( NCSA), ), bu  dd o sere all he  he eeds of he Wired webse. Accordgly, he made some adjusmes, ad ohers dd he same for her specfic purposes. Tese paches (hece he ame “Apa[]che”) were se back o he NCSA , whch was’ able o mpleme ad suppor all he chages. Terefore, Behledorf decded o ake corol hmself. Workg Workg wh a small smal l group, he orgal NCSA code wh all a ll he  he paches was compled compled ad rewre as he firs fi rs edo of he so-called so-ca lled “Apache” “Apache” webserer. Behledorf laer reealed ha he co-ordaco -ordao of hs sofware projec was prmarly based o progresse sgh ad olueer corbuos of eeryoe who had he clao o ake par. Te users of he webserer sofware coued o deelop ew releases. Laer, Laer, esablshed sofware supplers came ou wh her ow webserer programs, bu Apache has remaed rema ed he dusry leader leader.. Characteristic 3: Te internet and virtual workstations are the driving force behind open source

Te dssasfaco of Behledorf ad ohers ulmaely led o he sofware of he Apache webserer. I currely domaes he marke wh


19

abou a 70 perce perce marke share. sh are. No oly s sofware sof ware deelopme a commuy eerprse, he commuy also al so prodes user suppor. suppor. As BehleB ehledorf ad he oher deelopers were uable o prode ogog echcal suppor, he users bega o orgaze hemseles. As  urs ou, hs “free user-o-user asssace” fucos remarkably well. Research by Karm Lakha L akha ad Erc o Hppel 4 shows ha a commerca commercall corac s o a all requred o oba good help for quesos ad problems. Te ere ad rual worksaos eable users o asss each oher effecely. Laer, Behledorf esablshed he rual r ual worksao CollabNe. Coll abNe. I I s a webse where people who wa o work o ope source projecs ca mee ad collaborae. Te umber of regsered CollabNe users has grow o more ha 700,000. Aoher rual plaform for sofware deelopme called SourceForge umbers oer oe mllo users. Characteristic 4: Self-determination and intrinsic motivation are the dominant open source principles

Web eromes eromes lke CollabNe Col labNe oly represe represe he echcal ech cal sde of he  he busess. Wha moaes people o make somehg lke Apache s a erely dffere sory. As already oed, oluary ad upad corbuos by dduals hae produced hgh-grade sofware producs such as he Apache webserer, he Lux operag sysem, he MySQL daabase ad he JBoss applcao serer. New sofware s “creaed” whou explc coracs or payme. Self-dreco by people who wa o parcpae whou dreco from a boss, as well as srog s rog rsc moao whou he eed for moeary moeary reward, makes ma kes up he “sof” power behd he ope source sofware sofwa re moeme. moeme. Ts self-maageme se lf-maageme esures ha he experse of parcpas  ope source projecs s employed  he bes possble maer. Eeryoe ca selec a persoal challege, whch aurally leads dduals o perform work  whch hey excel ad o w recogo for . Te rsc moao s prmarly ourshed by he work self. Te exe o whch sofware deelopme s foud o be sprg compesaes for he lack of come. Furhermore, a repuao bul up  a ope source commuy ofe creases he chaces of obag lucrae employme. Characteristic 5: Open source aims at commercial success

No eeryoe s happy wh he moralsc aude of he Free Sofware Foudao. A umber of pares are eager o brg b rg ope source producs o he marke, bu he GPL lcese somemes has a obsruce effec. Ts was why Erc Raymod se up he Ope Source Iae ( OSI OSI). ). Te

20

Open for Business

erm “ope source sofware” was roduced  1998. Gradually, “ope source” replaced replaced he erm “free “ free sofware, sofwa re,”” whch had bee wdely used up o ha me.  me. Te acce acce has ow shfed shf ed from “free” “f ree” o “ope” “ope” because free also meas “for o moey,” moey,” a o-commercal mplcao  mplcao ha he  he profidre ope source moeme sres o correc. Whereas he word “mus” occurs frequely  he defio of GPL lceses, we fid he word “may” more ofe  he defios of OSI lceses. Sofware ha sasfies he codos of he OSI “may” be called “ope source sofware” ad s ge a place o he OSI webse. I ay case, he followg hree pos are applcable, accordg o he rules of ope source sofware: . Te source code mus be proded or made aalable for a prce o hgher ha he  he dsrbuo coss. coss. . Eeryoe s permed o redsrbue he sofware whou payg ay royales or lcesg fees o he auhors.  he sofware ad o redsrbue he mod. Eeryoe s allowed o modfy he fied sofware, o whch whc h he same codos apply as are applcable o he orgal sofware. Characteristic 6: Management by transparent and meritocratic leadership

Alhough “free” ad “ope” mgh sugges oherwse, he produco maageme of ope source s carefully ageme ca refully orchesraed. I ope source projecs, here s a srog focus o rgorous procedures ad a clear dso of roles. Somemes decsos are made by holdg a oe, as s he case  he Apache commuy. Tere Tere are compleely uambguous gudeles gu deles for resolg coflcs. o s o a projec maageme commee, you mus firs be ed. Tese people are graed og rghs ad joly deerme wha s he bes soluo. I s ee possble o speak of a “merocracy”: auhory auhory s allocaed al locaed o he bass of mer. Ayoe parcpag  a ope source projec s awarded greaer sadg ad has greaer say. Jus as  ordary orgazaos, he ope source commuy has s heroes ad leaders. leaders. For example, Lus orald oraldss has hs h s saus sofar as he Lux kerel ker el s cocered. He heads ha parcul par cular ar ope source sofsofware projec. Uder hm are hs “leueas.” I s absoluely clear how decsos cocerg he Lux kerel are made. Descrpos of he processes ad procedures of ope source projecs ca be foud o relea ere ses. Aoher mpora characersc of he cleer maageme of ope source projecs s opeess o feedback ad muual crme cr csm. Ee he merocrac leaders are somemes exposed o fierce crcsm. Te ope produco produco mehod s characerzed by hs aude, whch s he key o he mehod’s success. Eeryhg reoles aroud he code


21

ad he qualy of he work. Polcal games are slghly less easy o play  he ope source world. Characteristic 7: Te success of open source has generated a hybrid model

Sce 1998, he ere free/ope source ladscape has bee rasformed o a mxure mx ure of boh closed ad ope source commerce. Large commercal sofware compaes hae become progressely more ameable o ope source. Salared Salar ed employees employees a Su Mcrosysems, IBM IBM,, Mcrosof, Oracle, SAP ad HP hae bee sruced by her employers o collaborae  ope source commues. Te free ad ope source lceses are creasgly used for wha was oce closed sofware produced “ house” ad whch has ow become aalable as ope source. For example, Su has made s Solars operag opera g sysem aalable aal able uder a ope source source lcese, so he orgal housad deelopers ow collaborae wh e housad programmers ad esers  he ope source commuy. IBM has ow fully embraced he ope source produco model, wh self-deermao ad rsc moao as a gudg prcple. Ts ope source culure s see as a way o mproe a compay’s producy by a leas a hrd. Uder he labels of “commo source,” “shared source,” ad “commuy source,” he ope source cocep s spreadg hroughou he closed sofware facores of he commercal sofware gas. A he same me, a creasg umber of ope source compaes are workg wh wo lceses: a ope source lcese ad a regular commercal lcese. Lle seems o rema of Rchard Sallma’s dealsc free-sofware phlosophy,, bu we should o forge ha may ope source producs – Lux, losophy Lux , for example – are sll aalable hrough a GPL lcese.

1.3 Open source inspiration for innovation Te characerscs defied aboe – user oleme  oaos, a ew ype of lcese, upad work, a commuy of srogly moaed parcpas, parc pas, raspare ad merocrac maageme, closed ad ope models ha suppleme each oher – are all aspecs of ope source sofware. Howeer, hese feaures were o geeraed by ad are a re o uque o he ope source sofware moeme. For sace, good compaes ofe hae excepoally moaed people amog her employees. Upad work has bee aroud for ages,  he form of arous olueer aces.  es. No ee he egrao of ope ad closed models s a ew pheomeo, as here s hardly ay compay ha uderakes ay form of moderzao purely o s ow. Ad creae lceses are o oly assocaed wh ope source sofware.

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Open for Business

Te mos mpora oao does o ole he facors hemseles bu raher how hey are combed  ope source sofware. Ts success, he success of ope source sofware, should appeal o eery busess maager.. Te aural expecao ager ex pecao s ha h a hs success, he combao of facors ha makes ope source such a compellg pheomeo, s also applcable,  oe way or aoher, o oher fields: sde orgazaos srg sr g for oao, bu also ousde of hem  ecoomc secors oher ha he sofware dusry. Open innovation

Wh ope source  he suble of hs book ad a d he lk beg be g made o oao  geeral ad o oly  he  he sofware doma, doma ,  s empg o use he  he erm “ope oao. oao.”” Esseally, wha we call cal l “oa“ oao” here may jus as well be cal c alled led “ope oao.” oao.” Terefore, here s “ope source” ad “ope oao”; oe, howeer, ha he wo do’ always do’ alway s mea he same sa me hg. h g. Hery Chesbrough, affi a ffi laed wh w h he Uersy of Calfora Cal fora ad Drecor D recor of he Ceer for Ope Ioao, publshed he sadard book o ope oao. Te expresso “ope source” does o occur  hs book ad ohg s sad abou he opeg of oao by olg users  he oao process. Howeer, here are ceraly mpora parallels, because he oo uderlyg ope oao as ewed by Chesbrough o oly emphaszes he eed for a ouward-lookg sace bu also urges compaes o abado he dea ha hey mus keep all a ll kowledge k owledge o hemseles  order o dsgush dsgu sh hemseles  he markeplace. Ts s  s coeced o he maageme of a compay’s ellecual propery, whch demads beer ad more cleer sraeges, f oly o accou of he cos requ red o acqure ad maa paes all aroud he world. Neerheless,  s he opeess geeraed by ope source sofware deelopme ha we are cocered wh, ad whch prodes us wh a sarg po o refie he defio defi o of he cocep “ope oao.” I I oles maagg ellecual propery ad aracg (exper) users, ad jus as  ope source sofware produco,  s a maer ma er of adopg a ouwardlookg sace. sa ce. I 2006 Chesbrough publshed Open Innovation: Researching a New Paradigm5  cojuco wh Wm Vahaerbeke ad Joel Wes. Paers Paers of ope oao  oao  ope source sofware are also al so dscussed  ha book. Alog he same le, he flueal Dgal Dga l Coecos Coucl Coucl (DCC ( DCC)) of he Commee for Ecoomc Deelopme (www.ced.org), a busess ad uersy-led publc polcy group, ssued Open Standards, Open Source, and Open Innovation: Harnessing the Benefits of Openness  Aprl 2006.6 Ts repor exames ope sadards, ope source sofware, ad ope oao. Te repor cocludes ha “opeess” should be promoed as


23

a maer of publc polcy  order o foser oao ad ecoomc growh    he U.S. ad world ecoomes. ecoomes. Te DCC s chared by Paul Hor, Hor, seor VP Research a IBM. IBM . I coras o closed oao, ad keepg he see characerscs characers cs of ope source  md, classc cl assc ope oao ges us sgh o how boh forms of opeess mgh reforce each oher. A able ake from a preseao from Phlps, exraced from he 2004 cosulacy repor eled Vitalizing the Knowledge Economy (Vitalisering van de kenniseconomie) makes hs po clear. Te ew s dered from he Duch Ioao Plaform by Herma Wjffels ad Tomas Grosfeld.7 I he alzao repor, ope oao s cluded alog wh hree oher facors: “eraoalzao.” “kowledge ecoomy as a ecoomy of learg,” ad “muldscplar “muldscpl aryy ways of approachg research ad problem resoluresoluo.”

Closed innovation

Open innovation

Te brightest people in our field work for us.

Not all the clever people work for us: we must find a way to tap into these other human resources.

o profit from f rom R&D, we have to invent, develop and produce for ourself.

R&D by others can provide significant added value. Our own R&D is necessary in order for us to apply a part of this added value.

If we invent something ourself, we will be the first to bring it to the market.

Research does not have to be ours in order for us to profit from it.

24

Open for Business

Closed innovation

Open innovation

Te first to announce an innovation is the winner

A good business model is more important than being the first to market.

Whoever has the most and the best ideas, wins.

If we make the best use of internal and external ideas, we will come out on top.

We have to protect our intellectual property so that other companies cannot make any use of our ideas.

We must profit from the use of our intellectual property and we must use us e the intellectual property of others that suits our business model.

Here, ope oao s clearly preseed  a beer lgh ha h a closed oao. Te po a he op of he rgh colum  Phlps’s able (“No all he cleer people work for us; we mus fid a way o ap o hese oher huma resources”) s key o a ope source approach. I eals makg good use of he ere ad g users o parcpae,  order o ake adaage of all aalable experse ad experece, ad herefore o profi from rsc moao ad self-deermao. Cosequely, he ceral prcple of ope oao s ad remas makg cleer use of kowledge ousde he compay’s ow doors ad possbly from mpora users of he producs as well. If you speak o Phlps, you wll hear ha hs compay has bee busy for decades wh pae maageme ad collaborao wh parers  order o operae more effecely. So Phlps was log ago praccg hs form of oao, bu has ow also al so ploed a clearer course sofar as he  he oleme oleme of ed users s cocered, as demosraed by he followg ewspaper clppg: Philips experiments with consumer-led innovation Producers who are open to suggestions from lead users [or innovating consumers, ed.] can improve their products faster, states MI professor Eric von Hippel. Philips puts the theory into practice by means of the website Leadusers.nl, which has been operating out of Eindhoven since August. Te company has already used the website to conduct research into video telephony and is currently undertaking a study on the quality of sleep. Emerce, 20068

Te Duch Scece ad echology Polcy Coucl AW ( Adviesraad voor het Wetenschaps- en echnologiebeleid, AW ) s clear abou wha s mea by ope oao, ad edorses our poso:  s he ackowledged ope oao pracced for decades by such compaes as Phlps, ogeher wh he oleme of users  oao. 9


25

Te central principle of open innovation according to the Dutch Science and echnology Policy Council, AW Te shift from closed to open, collaborative, innovative processes means assembling various types of knowledge to form chains and networks. Tis not only involves technical and social-scientific knowledge but also and primarily the experiential knowledge of end users. Terefore the innovation will have greater relevance to services, experiences, and users than to products alone.

I he Neherlads ad elsewhere aroud he globe, ope oao  s arous guses gu ses s a major ssue. I December December 2006, he Duch Msry Msr y of Ecoomc Affars,  cojuco wh he Orgazao for Ecoomc Co-operao ad Deelopme, OECD, OECD , held a eraoal coferece o he opc,  he  he coex of globalzao. global zao. Te coferece coferece was aeded by Hery Chesbrough, Wm Vahaerbeke ad Erc o Hppel, all of whom were meoed earler; Erkk Ormala, who acs as Noka’s Drecor of echology Polcy ad s a former Secreary of he Scece ad echology Polcy Coucl of Flad; Yuaka Yoshmoo, a Chef Represeae  he  he Pars Par s Office of he Japaese Ms M sry ry of Ecoomy, Ecoomy, rade ad Idusry; r y; ad las bu o leas he Duch Scece ad echology echology Polcy Coucl AW, AW, represeed by Peer Adraas. Ts clearly shows ha ope oao s a ho opc o he ecoomc ageda  may dffere d ffere coures. Ope oao ad ope source mrror each oher well. Te Duch Scece ad echology Polcy Coucl, AW, AW, defies precsely hose eerprses  whch whc h ope source sofware s prome as coformg o wha Chesbrough cocees as ope oao. Ad he possbly of cludg ed-user experece has grow eormo eormously usly  rece rece years: firs of all due o he ere, whch faclaes facl aes coac coac more easly ad allows ohers o parcpae  oao; ad secod, because more ad more people are profice ad eager o be dgally ace. As a resul,  s creasgly easer for users o parcpae. Te raoale behd ope oao s o hae all ellge people workg for oe compay. compay. Ts s represeed o he lef sde of Fgure 1.1 1 .1 ad s ake drecly from Phlps’s able. Ope source sofware prodes he buldg blocks by whch more smar people ca become oled  he orgazao. O he rgh are a few characerscs of ope source ha fuel oao wh a mpulse o acually ole he ecessary experse. exper se. Te dagram suggess ha aracg hs  hs oleme oleme becomes becomes creasgly easer. Ts s also a lso he reaso why  s possble o speak of a escalag escala g red. echology makes  possble, ad a d eer more people people are wllg o ake par. Ts form of ope oao would o hae bee possble f ere use had o become so preale worldwde. Te dagram also reeals he eso ha has bee creaed olg propery rghs. Paes ad he proeco of ellecual propery belog o ra-

26

Open for Business

doal approaches o oao, o he lef sde. Obously, compaes compaes wa o ear as much moey as possble from her dscoeres. Bu f hese dscoeres creasgly come from ousde he compay, frco resuls. Afer all, who ca clam o be he ower of a good dea: he compay or “he commuy” ha produced ? I legal erms, “copylef” meas ha o excluse rghs are permed ad eeryoe has he opporuy o ear moey from collecely deeloped deas. Te fac ha moey ca be made  hs h s way s demosraed by ope source sofware. Specfically, compaes ha ca add alue o he sofware acqure payg cusomers. Te wo forms of propery rghs are a re herefore herefore compable ad each ca be used o ear ear  reeue. reeue. Neerheless, a eso exss ex ss bewee hem, a subjec o whch we wll reur  Chaper 6. Organizing

Not all clever people work for us; we must find a way to tap into these other human resources

Users take the lead Leading principles: • expertise • self-determination • intrinsic motivation

Patent and copyright Open innovation

Copyleft

It is increasingly easier for users to participate

Open source

Figure 1.1: Open source revitalizes classical open innovation

1.4 Crowdsourcing I he coex of ope source, ope oao ad user-dre oao, crowdsourcg s a ew geeral label ecompassg he specfics of he oher erms. Crowdsourcg s all he rage, especally a he ed of 2006 ow ha ime Magazine has chose c hose YOU YOU as he  he perso of he year. 10 Peer-o-peer commucao s he leadg prcple behd hs moeme, ad he moder ere he moor powerg . Te erm “crowdsourcg” suggess, aboe all, ha orgazaos ough o buld brdges o commues ad acely collaborae wh hem. Crowdsourcg s shared acy! Addoally ad perhaps more mporaly, crowdsourcg crowdsourcg frees us from he sgma sg ma aached o free ad opesource-spred oao: he oo ha such oao oly oles


27

ope source sofware. Of course, hs s o he case. Crowdsourcg ca be performed by ay orgazao  ay secor, wh o eed for ope source sofware. Oly he produco prcples are he same.

Open for Business

Currely, he mergg of oao wh ope source sofware s ceraly a ly ery relea. For sace, he le of hs book, Open for Business: Open Source Inspired Innovation was bor ou of a exese ope source projec called “Ope for Busess.” Te Apache Ope for Busess Projec11 s a sofware sue complee complee wh all al l he rmmgs, r mmgs, cludg ERP (Eerprse (Ee rprse Resource Plag), CRM (C (Cusome usomerr Relaoshp Re laoshp Maageme), e-busess/e-commerce ad SCM (Supply Cha Maageme). Ioao  a ope source erome s herefore becomg creasgly easer.

All well ad good, bu a greaer effor ceraly eeds o be made  order o reach a broader audece. audece. Beyod he crcles crcl es drecly drec ly ad professoally oled  ope source ad commuy source, or  ope oao12 ad user-dre oao, 13 hs ype  ype of oae oae acy has bee fraugh f raugh wh w h dffi cu culy. ly.

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Open for Business

Crowdsourcing

Ts all chaged  Jue 2006. Ta s whe he erm “crowdsourcg” suddely surfaced  Wired Magazine.14 A ha me,  me, we were were researchg he orgal source of crowdsourcg, ope source sofware produco. Jus lke Jeff Howe, we had oed ha ope source produco prcples were spreadg o oher ecoomc secors: early saces s aces of crowdsourcg. I he meame, crowdsourcg was becomg he le uder whch all ypes of ope-source-relaed oao were beg caegorzed. “Crowdsourcg” brgs br gs a whole array of opeess, ragg from cocep deelopme o produco, uder a sgle oerarchg cocep ha ca be mmedaely ad uely udersood.

Jeff Howe, the editor of Wired of Wired , was the originator of the term “cr “crowdsourcing” owdsourcing”14

“Crowds” are ere crowds, ad hey ca collaborae esely whou crowd members members acually beg be g  close proxmy or ee ole a he same me. I fac, beg ole smulaeously s ofe coee bu,  mos cases, o absoluely absoluely ecessary. ecessar y. Of course, o eery ere crowd s made up of housads or ee dozes of people; jus hk of he expresso “Tree s a crowd.” I realy, real y, crowds are jus defie umbers of people locaed somewhere  he world. Ad eedless o say, may cases or process phases are subjec o he prcple ha h a he greaer he obsesso, he greaer he producy – especally where he esg of sofware compoes s cocered. “Indeed, there’s nothing wrong with a buzzword if it actually signifies a meaningful trend or development.” Jeff Howe, Wired Magazine


29

Innovation happens elsewhere

Ulmaely, ayoe wag o ap o he publc’s creay ad hag ge approprae cosderao o seg he process  moo ca jus allow crowds o work o her ow ad see wha comes of . Te Cambra House sofware compay operaes  such a maer. You, he crowd member, do he hkg, programmg ad esg. Ad you, he crowd member, hae a large share  he profis as well. Seleco ad sales s wha he compay s especally especal ly good a 15. Te resulg collaborae produc s wha hey call “crowdsourced sofware.” Te sofware dusry has bee o o hs for wey years, oly ow he crowd s sharg drecly  he profis.

Howeer,  s also possble o choose o hae greaer corol ad secrecy. Howeer, Tere are all kds of aras, alhough he doma mara remas, “Ioao Happes Elsewhere.”16 Beg ope o hs h s ousde oao esseally requres you o look beyod your mmedae cy, o use he ere o faclae collaborao amog he rgh faacs ad o allow hem “o do her ow hg.”

Innovation Happens Elsewhere: Open Source as Business Strategy is an important book by Ron Goldman and Richard Gabriel published in 200516

ypca ypcally, lly, such pracces rage from bloggg 17 ad You You ub ubg g 18 o payg a few ces o use Amazo’s Mechacal urk 19 o perform a few asks; from drawg craers c raers o help NASA deerme he age of areas o Mars 20

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Open for Business

o guded effors such as he  he Global Ioao Jam Jam 21 a IBM; IBM; from deel22 opg he Wkpeda ole ecyclopeda o asssg  he deelopme of medce as par me par  of he ropcal Dsease Iae 23; ad from he Apache Ope for Busess Projec 11 o user-dre user-dr e oao11 a Phlps, 3M ad oher orgazaos. I s remarkable how may people are ace o he ere  ere hese days,  ery dffere crowds. Tey are workg ogeher for a good cause, for scece, for a compay, purely for moey, or  ay umber of pursus, cludg deelopg faser ad beer oao for compaes ad suos. Peer-to-peer e-mancipation

Peer-o-peer (abbreaed p2p) s a buzzword ha s ofe heard  hs coex24 . Lerally, p2p s he drec e-commucao of oe ddual “peer” (lke or lke-mded perso) wh aoher. Such perso-o-perso coac wh he ere populao mus o, howeer, be cofused wh a complee p2p ecoomy.

Anyone can begin a second s econd life on the internet by becoming active in communities, for example in “Second Life” itself

Te ere ceraly makes  easer for us o fid ohers wh cera commo ad compleme complemear aryy eress. Marke mplcaos are ceraly cer aly o rrelea: que he corary. Te fac ha,  may saces, p2p commucao bypasses or parly bypasses radoal ermedares meas, firs of all, al l, ha  ha he marke m arke works more effi cely    erms of lower coss ad faser delery mes.  mes. Bu  s also more effece sce, 


31

prcple, creasgly more dduals ca be sered ser ed o demad. I fac, p2p sads for he creasg ere oleme of he ddual ad of he may wdespread lke-mded l ke-mded people who are co-prese. I a word, word,  sads for a “e-macpao” “e-macpao” ha more ha eer urs ur s he ddual d dual cusomer o he kg, especally whe such ddual kgs amass o soereg crowds. Te sgfica ecoomc acy assocaed wh hs form of crowd rule s  s perhaps bes demosraed by he well-kow example ex ample of he Secod Lfe rual world 25. o beg wh,  could eer hae bee bul whou he effors of a ehusasc crowd. Besdes he dduals ddual s who acqure all ypes of rual commodes, ragg from clohg o real esae, more ad more real-world compaes are becomg ace  Secod Lfe, compaes such as ABNABN - AMRO, AMRO, IBM, IBM, Phlps, Nke, Reuer R euers, s, ad Nssa. YOU!! YOU

Wh all hs  md, m d,  s o surprsg ha ime Magazine10 has eleaed YOU o a place of hoor, jus as Busess 2.0 had preously doe 26. YOU are a ddual who s acely corbug o he emergece of he Iformao Age. YOU represe a class of people, rapdly creasg  umber: all hose dduals whom we call “prosumers,” oherwse kow as dgally produce cosumers. A few of hese prosumers, whom ime Magazine surely had  md whe  eleced YOU as perso of he year, are he makers m akers of he  he Chumby 27. ake a look a he webse. I’s a compac geerc elecrocs dece ha ca ac lke a clock rado ad also exchage phoos ad messages wh your freds. Bu firs ad foremos, YOU ca add fucoaly ad, of course, chage s looks accordg o your whm. Te mos mpora po s ha he Chumby C humby does o come come from he desg deparme depar me of a large elecrocs maufacurer. I was smply hough up by a couple of hackers ad made by hackers for oher hackers, who wll subsequely ker wh  furher, f urher, maly o erch her Ne lfe: “We invented the Chumby because we, like most people we know and especially like most younger people we know, have at least two often-incompatible lives. We have our real life: life: being with our family, friends and co-workers; doing activities; running errands; making dinner. We also, and increasingly, have our Net life: life: answering email; posting to our blogs; sharing digital photos or the latest joke; and just letting Web whimsy wash over us.”

Dgally ace dduals ad crowds are reformg he world. ime lyrca l abou hs rasformao, rasformao, bu he realy s slow Magazine waxes lyrcal

32

Open for Business

ad gradual, complee complee wh ups ad dows, as well as a hype-cycle hype-cyc le rhyhm 28 ha we kow so well from Garer . visibility

Mashup IPv6 Speech Recognition for Mobile Devices Corporate Semantic Web RSS Enterprise Model-Driven Architectur Architectures es Collective Intelligence Event Driven Architectur Architecturee Telepresence Speech-to-Speech Tran Translation slation Offline Ajax Augmented Reality Prediction Markets

Web 2.0 Folksonorries Digital Paper E-Paper Social Network Analysis RFID (item)

Ajax

Corporate Blogging

Wikis

Mesh Networks: Sensor Tera-architectures DNA Logic

echnology rigger

Peak of Inflated Expectations

VoIP

RFID (Case Palet)

Biometric Payments

Quantum Computing

Internal Web Services

Grid Computing

Smartphone Location-Awaree Applications Location-Awar

Enterprise Instant Messaging Location-Aware Technology Mobile Phone Payments Tablet PC As of July 2006

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

time Years to mainstream adoption: 2 to 5 years less than 2 years

5 to 10 years

more than 10 years

obsolete before plateau

Tis hype cycle was devised by Gartner in August 2006 and charts the new technologies of the modern internet

Crowdsourcg s o lerally meoed o he aboe hype cycle, alhough “collece ellgece” comes awfully close ad occurs ear he cycle’s peak. Moreoer, crowdsourcg s srogly relaed o Web 2.0, whch s precsely a s summ. Te producy plaea plaeau u has o ye bee reached – or has ? For where would you place Lux ad Apache? Te sofware secor s far ahead. A world whou crowdsourced sofware has become uhkable, ad crowdsourced ayhg s gag eormous momeum. Crowdsourcing and open innovation

We decded o deploy he erm “ope oao.” Te erm s a aluable cocep ad ecessary addo because  allows crowdsourcg o eer he field where he game s beg be g played. Ioao apples o he ere process, from cocepualzao o deelopme ad use – from “eo” o “cashg-” so o speak. Ope oao  oao meas ha compaes hae o ope her processes o hrd pares. Te may examples foud  Chaper 2 show how he crowd ca prode a oable corbuo a


33

eery sage s age of hese processes. ake ake ogeher, hese examples reeal he  he maer  whch prod produco, uco, R&D ad markeg compaes are beg chaged by hs ope model.

1.55 Te outline and structure of this book 1. Followg hs roduco roducory ry chaper chaper,, we ake a closer look a ope oao ousde he sofware secor. Subsequely, we reew he successes of he ope source moeme wh he sofware secor. Ts marke has ake he lead    embracg he ope model, wh a degree of accepace ha s descrbed  Chaper 3, whch s where we hghlgh hghl gh he lessos o oao o be draw from ope source sofware produco. I wo more specfic chapers we come o he core of ope source sofware, he esseal elemes ha ca sere as sprao for busess oao. I hs way way,, he characerscs ch aracerscs of ope source are passed uder uder he mcroscope of hs book. I Chaper 6 ad  preparao for he las hree lessos ha, as meoed preously, preously, are closely relaed rel aed o he see characerscs of ope source  Seco 1.2, we pose he mpora  mpora queso, queso, How ope s he fuure f uure?? Each of hese  hese chapers s brefly dscussed below. Te cocludg chaper, chaper, Chaper 7, coas he hree  hree lessos ha are relaed o he see characerscs of ope source  Seco 1.2. Chapter 2: Open innovation – the new trend

I he roduco  roduco we breezed oer he cocep of oao perhaps a lle oo smply, smply, bu we wll ceraly cer aly make ma ke up for hs  he secod chaper wh referece o heores by hree expers o oao  order o dscuss he ssues  greaer deal. Te firs, Joseph Schumpeer, s he orgaor of he srucured sudy of oao ad he ma who defied oao as somehg ha mus prmarly make cash regsers rg. Te edece ha hs s wha has happeed wh ope source sofware s prese preseed ed  Chaper Ch aper 3, where we refer o he operaos of exsg I compaes o show how ope source sofware ears moey. Te secod secod exper exper  s Clayo Clay o Chrsese, Chr sese, a professor professor a a Harard Har ard Busess School ad he perso who called ope source a “dsrupe oao.” I oher words, ope source s a pheomeo ha has ured he sofware marke compleely upsde dow. Ts oly makes ma kes he oae power of ope source ee more relea because comparable oaos could hae a smlarly dsrupe effec o oher markes. Fally we brg  Erc o Hppel, head of he Ioao ad Erepreeurshp Group of he MI Sloa School of Maageme. For a quarer of a ceury Vo Hppel has bee researchg “user-dre oao,”

34

Open for Business

he “cosumer-led oao” of whch ope source sofware prodes a ousadg example. I s eresg ha he rus o user-moaed produc chages boh sde ad ousde he sofware dusry. He locaes he relao bewee ope source ad oao prmarly  he boom-up aes of users. Chapter 2 provides examples of open innovation and shows how its latest generation participates in this model.

Nex, he secod chaper specfically descrbes he examples of ope oao “elsewhere” -ousde he I secor. Examples from he meda secor, he arcraf dusry, pharmaceucals ad he cosumer goods dusry skech a eresg pcure. I seeral areas ad  arous secors, effors are made o explo e xplo he possbles of ope oao ad o expad ex pad upo hem. Te chaper reeals ha  ha he ew geerao of users, whch s amed “Geerao C” (for “coe,” “code” ad “creao”),, show hemseles ao”)  hemseles o be sroger “ope oaors.” Chapter 3: Te software market has taken the lead

Te hrd chaper oules he game ha s played by he sofware gas who corol he I dusry. Tere s o a sgle player who s o oled wh ope source. Ee Mcrosof, so frequely porrayed as he bg oppoe of ope source, has become lked wh a hrg commuy of deelopers ousde s ow compay walls. Mcrosof fully udersads wha ope oao ca mea. Te same sa me cao be sad of may compaes ousde he sofware secor. Te I marke has, ha s, herefore, ake he lead, ad s adace ca be measured by wha he players are dog  hs marke. Wha hey are all aempg o do s o make moey. Joseph Josep h Schumpeer Schumpeer has descrbed he rue pcure pc ure rgh from he sar: s ar: oao s exremely ex remely ejoyable ad ad excg, exc g, bu he boom le s usg  o geerae busess. Precsely for hs reaso, he large markecorollg I maufacurers hae goe  for ope source  a bg way, whle relae ewcomers, lke he ope source sofware compay Red Ha, make a dece lg as well 29. Somehg s clearly gog o here. Wh a lle moey, sos were coered o acy, ad he ere I secor s ow compleely compleely mmersed  hs h s eerprse. Te exac chagech ageoer po cao be clearly deleaed, bu IBM’s IBM ’s suppor for he Lux commuy played a mpora role. Ad he release of fie hudred paes o he ope source commuy by IBM a he begg of 2005 marked a ew mlesoe  he hsory of ope source. Joh Kelly, he seor ce-presde ce-presde of echology ad ellecual ellec ual propery called  “he begg of a ew era  how IBM wll maage ellecual propery.”


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Chapter 3 describes how open source has transformed the I market and shows how this sector is at the forefront of this new open trend. Ultimately, it provides a jarring wake-up call to other sectors concerning the power of open innovation.

We wll reeal he seps ha a umber of large supplers hae ake o make her compaes ad producs more ope. Such sofware gas as Mcrosof, IBM ad Su use ope source, firs of all, all , as a sraegc weapo  order o furher domae he marke. We exame how all ha fis ogeher. Te I esablshme wll be led up ad cofroed wh he “challegers. “chal legers.”” Compaes such as a s MySQL, MySQL , Zed, Red Ha, SugarCRM Sugar CRM ad oher ope source eerprses hae joed he compeo. Where do hese compaes ge he moey o eer he marke ad ear her keep? We wll see how he esablshed order collaboraes wh hese ewcomers, ee by buyg hem ou f ecessary. Chapter 4: What motivates an open source community?

Chaper 4 esgaes oe of he mos mpora ssues ha h a ope source ca each us: wha moaes people o parcpae  he produco of sofware,  mos cases whou receg ay payme for her work? Ad he crucal cr ucal sprao  sprao for for hs h s esgao esgao clearly emerges  he subseque subseque  queso: wha ca we lear from f rom hs regardg ope oao  oher busess secors? Ts chaper carefully exames he ew geerao of deelopers who hae collecely bul sofware sofw are producs producs such as Lux. Lux . Wha keeps hem gog? Why are hey dog ? Wha moaes hem? Chapter 4 considers the most fascinating questions surrounding open source: Why do people do voluntary work? And what does this mean for open innovation outside of I? I ?

From a ecoomc ewpo, ope source ally seems o be easy o expla. Assumg he  he “ecoom “ecoomcc ewpo” ew po” meas assumg ha people prmarly uderake aces  order o geerae come from hem. Cosequely, we prode a glmpse o he er workgs of ope source commues. I s a msake o hk ha people deoe me o ope source for dle moes, ad hs oo s swfly dspelled. Exese moaoal research has show ha mos people are made of flesh ad blood, so hey hae some soldary wh each oher bu also wa o make a lg. A reew of he mos mpora sudes wll reeal ha a mxure of moaoal facors makes ope source produco possble.

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Open for Business

Chapter 5: Open source culture is better

Moao aloe does o geerae producs. Tere mus be maageme ad a leas a mmum amou of focus  order o brg somehg  o produco. We We expla expl a how such compaes as Apache ad a d Red Ha were able o succeed  hs regard ad how Lus oralds maages hs Lux kerel. Te eresg ssue regardg he goerace of ope source commues comm ues s ha hey  hey deae from he well-kow maageral maagera l models  a umber of mpora respecs; eerheless,  s uquesoable ha a umber of good producs hae resuled. Te queso he arses as o why all sofware sof ware s o made  hs maer. ma er. Could Could ope source sofware be appled o he maer  whch your compay s currely deelopg sofware? Chapter 5 reveals the extent to which open production and its associated culture has already become mainstream. Te software industry is leading this trend. And the inspiration for applying open innovation elsewhere lies hidden in the lessons that can be drawn from this production method.

A ope source culure has a beefical effec o he qualy of sofware produco. Remarkably, hs s recogzed by eeryoe, ad equally remarkably, he curre maer of sofware produco already dsplays ery may ope source ras whou def defyg yg self as a s such. Bu delberae effors o esablsh ad culae cu lae a ope source culure sde compay walls hae ejoyed lle success o dae. Wal Scacch, a member of he Isue for Sofware Research a he Uersy of Calfora, aalyzed hs ssue. Te commuy-source ae a IBM  2005 was a ellg ell g ee. IBM expecs ex pecs ha  ha he offi ca call esablshme esabl shme of a ope source culure wll eable  o deelop s sofware a leas 30 perce faser. Mcrosof s followg hs lead. Te problems oled  he delery of Wdows Vsa whe he projec was sll called ‘Loghor’ hae caused a ew wd o blow hrough he Mcrosof sofware-deelopme culure. Bll Gaes gae he order o desg more  he form of “Lego blocks” ad o work o cremeal mproemes, such as s usually usua lly doe  ope source projecs. Edely, ope source sofware deelopme ad classcall “sofware egeerg” hae come ogeher classca ogeher  srg sr g o prode ew producs faser. Chapter 6: How open is the future?

Chaper 6 goes beyod he froers of “ope.” Te possbles of ope produco seem ulmed, bu we ru o boudares ha lm he furher fur her deelopme of ope oao. Te owers of kowledge, sof-


37

ware ad oher creae work, whose owershp s secured  paes ad copyrghs, wa o cash  o her creaos as much as possble. Howeer, he ope oao model hres bes whe all aalable kowledge s he subjec of as much elaborao as possble. Couously requesg permsso permsso o use cera cera  propreary ellecual prop propery ery s s a resome ad early mpossble ask. Should we o  fac rd ourseles of owershp proeco? Are we o rapped  a legal sysem ha o loger sus hs oae age  whch we fid ourseles? Chapter 6 describes how the struggle for ownership is a tension between private property and the public domain. Tis struggle is critical for the further development of open innovation.

I s far from cera ha he fuure wll w ll be sgficaly sg ficaly more ope. ope. Tere are reacoary forces ad hey hae eeryhg o do wh he legal coflcs surroudg owershp. Te erse of ope, he closed paeed dscoery, dscoer y, s ceraly cera ly o  rerea. Udersadably, Udersadably, compaes wa o make moey from her oae effors. Bu paradoxcally, proecg he rgh o ear a buck from a compay’s ow R&D places lms o ecoomc growh. A leas, opos derge o hs ssue. Te possble resuls of such coflc wll w ll be examed exa med from hree pos of ew: prae propery, he publc doma ad a bled of prae ad publc. Wha hese faces of he legal sysem ceraly make clear s ha he esablshed order, order, boh  he sofware world ad oher dusres, wll w ll figh ooh ad al o defed s busess model. Bu wha also becomes appare s ha he permsso culure  whch we le ofe resrcs producy. Notes to Chapter 1

Shaklad, lad, S., “Wdows “W dows Bumps Ux Ux as op Serer OS” OS ” CNE , Februar Februaryy . Shak .

. .

. .

21, 2006, ews.com.com/Wdows+bumps+Ux+as+op+serer+os/210 0-1016_3-6041804.hml?ag=hml.aler. Norrs, J.S., “Msso-Crcal Deelopme wh Ope Source Sofware: Lessos Leared,” IEEE Software, Jauary/February 2004, www.cs.uc. edu/~wscacch/Papers/New/Hold/jpl-MssoCrcal-oss.pdf. Weber, S., Te Success of Open Source, Harard Uersy Press, 2004. Lakha, K. & E. o Hppel, “How Ope Source Sofware Works: ‘Free’ User-o-User Asssace,” Research Policy 32, 923-943, 2003, opesource. m.edu/papers/lakhaohppelusersuppor.pdf. Chesbrough, H, W. Vahaerbeke & J.Wes, Open Innovation: Researching Re searching a New Paradigm, 2006 Dgal Coecos Coucl of he Commee for Ecoomc Deelopme, Open Standards, Open Source, and Open Innovation: Harnessing the Apr l 2006, egosadards.go./ews/u-s-adsedegosadards.go./ews/u-s-adsed Benefits of Openness, Aprl

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Open for Business

o-promoe-ope-sadards-source-oao; www.ced.org/projecs/ ecom.shml. . Wjffels H. & . Grosfeld, Vitalisering van de kenniseconomie: het beter ontwikkelen en benutten van de mogelijkheden van mensen als de sleutel voor een dynamische kenniseconomie, Ioaeplaform, Noember 2004, www. rug.l/lg/documee/ValsergVaDeKesEcoome.pdf. . www.emerce.l/euws.jsp?d=1102473. . AW werkprogramma 2005: grosljs a mogeljke oderwerpe, www. aw.l/uploads/files/grosljs2005.pdf. . www.me.com/me/magaze/arcle/0,9171,1569514,00.hml. . www.ofbz.org. e.wk wkpeda.o peda.org/wk rg/wk/Ope /Ope_Ioao _Ioao; ; ww www w.ope .opeoae oae.l. .l. . e. . leaduser.com. . www.wred.com/wred/arche/14.06/crowds.hml. . www.cambrahouse.com. dreamsogs.com/IHE IHE.. . dreamsogs.com/ . www.echora.com. . www.youube.com. . www.murk.com. . clckworkers.arc.asa.go. . www.globaloaojam.com. . wkpeda.org. . www.ropcaldsease.org. . www.p2pfoudao.e. . www.secodlfe.com. . moey.c.com/magazes/busess2/peoplewhomaer. . www.chumby.com. . www.garer.com//page.jsp?d=495475. . www.redha.com/abou/ews/prarche/2006/eargs_2007q3.hml.


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2

Open innovation – the new trend

Tis chapter presents a few examples of open innovation. Te final sec tion will draw some conclusions based on the general tendencies illustrated by these examples. It’s evident that open innovation belongs to the current generation. Te changes that this generation is initiating respond to further refinements in the notion of innovation. “Disruptive innovation” is the label applied to open source software: an innovation with monumental consequences consequences for the market. Expectations are that open innovation innovat ion could be equally e qually disruptive in other sectors. Te third chapter will reveal reveal the extent to which the software market has been transformed. Tis chapter will focus on other sectors, which lag a bit behind in terms of innovat innovative ive force, although it is prominent in a number of cases.

From consumer to producer

Ioao  producs, serces ad markes has bee radcally rasformed as a resul of echologcal deelopmes. Te ere, domaspecfic sofware ad lghwegh sofware  he form of webserces hae made  possble for users o become oled  compeo ad oao. Ts ca ee occur whou he suppor of a “coeoal” orgazao. A commuy ca maufacure s ow producs: lke ope source sofware, for example. Expadg he cosumer role o oe of a (jo) producer – he so-called “prosumer” – helps orgazaos o mproe producs, producs, o smulae R&D R& D ad o uderake aoher ype y pe of markeg. Ts ges rse o he hrea ha a produc made by a commuy self mgh oershadow exsg ex sg producs. Te eresg po s ha a produc eed o be compleely polshed for  o pose such a hrea. For hs reaso, oao exper Clayo Chrsese appropraely labels he raw form of ope source sofware as a “rump card.” Generation C

Ope source oao, oao,  he sese ha cosumers acually parcpae par cpae  produco, s ow somehg ha has compleely ake off. Users hae also become producers, jus as we saw  he  he coex of ope source sofware deelopme. Tese days, creasgly more people are dgally ace. Oer oe bllo people are ow ol ole, e, ad hs growg grow g populao

41

has bee called he “coe creag geerao”: “Geerao C” for shor. Half of hs bllo hae already made dgal “hgs” hemseles, such as a webse or dgally mapulaed phoos. Compaes who kow how o reach hs dgally produce geerao ca ur large profis from hem. Geerao C uses arous laguages l aguages o be creae: from aural spoke ad wre laguages o he arfical ar fical laguages l aguages used  programmg. Te edecy s for he more complcaed laguages o become creasgly smple, eablg creased  creased oao: for example, modular modular programs or “mash-ups,” “mash-ups,” whch are based o so-called so-ca lled “webserces” “webser ces” may be used  compay R&D. Open source innovation

ogeher, hese facors corbue o a crease  ope oao, alog wh a creasg prealece of ope sources o whch commues ca work. New specficaos ca be added or deleed ad, based o hese sources, ew producs ca be fashoed ha wll hae her ow compleely uque role. Jus as  ope source sofware, opeg produc specficaos  oher o her fields s a mpora  mpora eleme for for creag oao. Taks o rapdly growg opporues o creae derge producs, processes ad serces based o a dgal desg, ope source oao s o loger lmed o sadard sa dard sofware producs, such as operag sysems, daabases, scrp laguages l aguages ad web browsers. I s, for example, o be foud  he CAD/ CAD /CAM doma, bu also  domas relaed o chemsry ad bo-compug, such as he pharmaceucal dusry. Te red s ha h a progressely more more ope-oao ope-oao projecs wll w ll ole doma-specfic ope source formao mapulao. Examples of open innovation

Oe ca fid a rch r ch array ar ray of examples of ope source pheomea ousde of he sofware dusry: a Korea ewspaper, adersemes for gym shoes, a ere ecyclopeda, ecyclopeda, a bured-dow facory, BzzAge, a webse for pesoers, he “mash-ups” from Amazo, he seeker-soler scece marke, he ope oao sraegy from f rom Procer & Gamble ad he deelopmes deelopmes  bo-compug, geecs, ad medce. medc e. Tese are all examples of he mpassoed commme commme of dduals ddua ls ad groups ha ofe parcpae parc pae  hough ad aco for for ohg or for a eglgble fee. Ayoe lookg a all hese examples from a dsace sees a ew ladscape  whch sharg kowledge wh he ousde world has become commo pracce ad  whch cosumers ad commercal cusomers cu somers acely parcpae  formg deas ad creag producs. Wheher he ed produc s compleely dgal or s a agble produc such as a char

42

Open for Business

or medcao makes a major dfferece  hese examples. A secod mpora dfferece s he laguage  whch people commucae: a ere ecyclopeda s wre  ormal huma laguage, whereas we hae o maser webserces or CAD/ CAD /CAM sysems  order o be able o parcpae.

Innovation n writ large 2.11 Innovatio 2.

• • • • •

Ioao ca be modes, cossg of small sma ll adjusmes ha h a beefi a compay  oe way or aoher. Obously, we would prefer o hae radcal breakhroughs ha kock he compeo back o s heels wh oe heay blow. Ope source sofware deelopme belogs o hs laer ype; y pe;  s INNOVAION INNOVAION  capal leers. Te roducory chaper c haper drew a parallel bewee Hery Ford ad he produco eoluo ha he assembly le aed. Bu hs parallel does’ prode a complee ew of all ha ope source oao eals. Ioao has a umber of araos: produc oao, process oao, marke oao, orgazaoal orgaz aoal oao ad so o. Te foudao of hs mulfaceed cocep has bee defied by Joseph Schumpeer, oe of he mos mpora ecoomss of he preous ceury. I hs Teory of Economic Development1 publshed  1934, Schumpeer descrbes fie ypes of oao ha hae a lo o do wh he aras ar as ha we hae h ae jus eumeraed. For For Schumpeer, oao s as follows: he roduco of a ew produc o ye kow k ow o he  he cosumer, or he roduco of a ew qualy of a famlar produc; he roduco of a ew produco mehod ha h a eed o  ay way be based o a ew scefic dscoery; access o a ew source of raw maerals ad sem-fished producs; he re-orgazao of a dusry, such as he esablshme or dsmalg of a moopoly; ad he opeg of or ery o a ew marke. Ope source sofware sof ware deelopme s INNOVAION INNOVAION wr large l arge because  mafess self  all of hese fie forms. Neerheless, o eeryoe agrees ha ope source sofware s so oae. radoal supplers upbrad ope source commues commues for dsplayg dsplay g mosly copyca behaor ad seldom comg up wh ayhg really ew. Hece ’s o ope oao bu,  fac, ope mao. Te success of ope source  roducg a ew produc produc or a ew qualy qual y of a famlar faml ar produc, as meoed meoed a he op of he ls aboe, s herefore subjec o debae. Bu le’s jus coue dow he ls ad leae hs po for laer. Te “roduco of a ew produco mehod” has already bee exesely dscussed  he roducory chaper. Ts ype of oao

2 • Open innovation – the new trend

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s based upo he self-deermao ad rsc moao of he parcpas. Addoally, he ere s a ecessary codo because  makes dsrbued work possble. I hs respec, Schumpeer’s hrd po, “access o a ew source,,” mus be see as he ceral heme of ope oao. “No all he cleer people work for us; we mus fid a way o ap o hese oher huma resources.” Access o brgh mds ousde a compay’ss ow orgazao compay’ orga zao s,  essece, he greaess g reaess of ope source. Te reorgazao reorgazao of a dusry, he fourh ype  ype of oa  oao, o, was oly possble whe ope source sofware aaed rue ecoomc sgficace. I s also for hs reaso ha we ca aga sress he oae power of ope source  capal leers. Te fial form of oao (he opeg of or ery o a ew marke) ad he firs oe, whch we skpped oer for he sake of coeece (he roduco of a ew produc or a ew qualy) are dscerble dscer ble  he argume made by Clayo Chrsese, a exper o he subjec of oao. Chrsese s a professor a Harard Busess School who coues o buld bu ld o Schumpeer’s Schumpeer’s deas. Schumpeer spoke abou “creae desruco” whe whe he was referr referrg g o large, ralblazg ralbl azg oaos  whch old deas, echologes ad sklls were made superfluous by he arral arr al of ew busess aces. Chrsese prefers o use he word “dsrupe” o descrbe ralblazg ralblaz g oaos. oaos. He defies he ope source sofware moeme as a ype of dsrupe oao. Remarkably, R emarkably, he cosders ope source o hae a markedsrupg effec o accou of “he qualy” of s producs. I oher words, he ssue cocerg ope source abou whch here s mos dscusso – he queso wheher whe her he producs produc s hemseles hemse les are suffice cely ly oae – s rased by Chrsese precsely o dcae ha hey “are dsrupely oae.” A he Ope Source coferece  2004, Chrsese explaed ha dsrupe oaos do o always eed o be ours de force ha corbue somehg subsaal o a aed deelopmeal pah. Dsrupo ca also mea ha a break s made from a deelopmeal pah  order o esgae a more rudmeary leel: “But then there was this other kind that we call the Disruptive echnology that comes into the market every once in a while, and open source clearly is one of these. And we called it ‘disruptive’ not because it was a dramatic breakthrough improvement, but, instead of sustaining the trajectory of improvement, it disrupted and redefined it and brought to the market a product that was crummier than those that historically had been available. In fact, it performed so poorly that it couldn’t be used by customers in the mainstream. But it brought to the market a simpler and more affordable product that allowed a whole new population of people now to begin owning and using it.” Clayton Christensen, 20042

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Open for Business

Clearly for Chrsese, Chr sese, he power of ope source sofware s foud  s combao of he firs ad las ypes of oao from Schumpeer’s defio: he roduco of a “crummer” ad smpler produc hag basc fucoaly, ad (as a drec resul) he ally raher eae opeg of a ew marke. Presely Presely,, mos ope source sofware s  s becomg a lle easer o use ad ca also be hadled by users who are o programmers. As a resul, ope source sofware ow compees  erms of prce ad fucoaly wh w h sofware from wha Chrsese defies defies as he radoal rajecory of mproeme. I Te Innovator’s Dilemma, Chrses Chr sese e explas ha  ha here are, are,  essece, wo ypes of dsrupe oaos: low-ed dsrupo ad ewmarke dsrupo. Varous ypes of buyers are assocaed wh each. Low-end disruption

Buyers for whom he exsg produc acually offers oo much (Chrsese’s “oershoo” effec), ad who are eresed  producs ha do or ca do less ha wha s beg currely offered o he marke, represe ferle groud for low-ed dsrupos. New-market disruption

Buyers who could o preously afford he exsg ex sg producs ad are suddely araced by a ew, less expese offer. Sce much ope source sofware has become more user fredly, hs dsrupo wll hae s full effec. Clayo Chrsese s o he oly oe who has proclamed he dsrupe characer of ope source sofware. Te followg hree h ree quoaos also make hs h s po: Open source software soft ware development disruptive “Disruptive technologies like open source software soft ware development reduce the margins of existing players, lower the barriers to innovation, and end up expanding the market for players who are able to quickly understand and play by the new rules.” im O’Reilly, 19993 “Te disruptive effects of the open source production process could be as great or greater outside the information sector, at first simply because of the increased efficiency of information processing that will effect effe ct many other economic activities, and second because of the spread of the model of production itself to other sectors of the economy.” Steven Weber, 2004 4


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“Te great open source debate [in 2006] will look at how free and open source technology, as a disruptive technology, has changed the way the software industry does business and the new opportunities it has spawned.” Eweek , 20065

2.2 Value creation with open innovation Maageme gurus C.K. Prahalad ad Vekaram Ramaswamy oule he urgecy of drawg dr awg lessos from ope source due o he effor ha  ha  coss compaes o coue co ue o creae alue. Te rapd geerao of ew deas s crcal ad, accordgly, exsg deas become oudaed more quckly. Greaer oleme of ousders  he produco process, as llusraed by ope source sofware, mus become he ew rule for markeers ad corporae sraegss. Ts s he message ha Prahalad ad Ramaswamy coey  her book Te Future of Competition.6 I her ew, oe of he mos mpora reasos o ope he produco process o cusomers s he  he eormous burde placed o he shoulders of maagers o creae alue. a lue. I s becomg creasgly creas gly dffi d fficul o rema rema  ahead of he compeo or o hold oo a srogly coeded compee poso. I CIO Magazine, he wo professors make a case for egagg cusomers  work amed a med a creag more alue. “It’s time to loop customers into the act.” C.K. Prahalad and Venkatram Ramaswamy, 20047

How do you work  a way ha keeps cusomers egaged  your aces?? Ad s hs es  hs really ayhg ay hg ew? We We ceraly cao c ao mage ha large compaes (e.g. Phlps) gore cusomer feedback whe uderakg produc updaes. For sure,  s o as f Phlps ad ohers hae gored cosumer expereces  he pas. O he corary! Bu sce Augus 2005, Phlps has bee usg he Leadusers webse o coduc more research  hs h s area. Ts delberae del berae sep oward cosumer-led cosumer-led oaos (i.e., user-dre oao) s a drec cosequece of he ope source spred research work by MI professor Erc o Hppel. A he sar of 2005, Vo Hppel publshed hs book Democratizing Innovation. He s he jo fouder of he Lead User Coceps cosulg agecy, whose cles clude 3M, Kellogg, Kel logg, Neslé, Norel Neworks, Ne works, ad Ver Verzo. zo. Te fluece of Vo Vo Hppel o he  he (ope) (ope) oao pracces prac ces of hese compaes s s a good example of how a ope source bes pracce ca be used producely elsewhere; else where; hs s a rue r ue ope source lesso lesso for oao ha has more ha proed s worh, as 3M has repored US$146 US $146 mllo  -

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creased sales oer he las fie years hak h akss o beer lead-user focus. Te bes pracce  queso, from ope source sofware deelopme, deelopme, s ha  ha he experse ad experece of users s explcly cluded. Ope source sofware deelopers hae always bee users hemseles, hemseles, ad,  par, par , ha remas he case. c ase. Now he lead-user approach approach s shfg shf g o oher secors, as a cosequece of Vo Hppel’s sgh, whch s rooed  ope source deelopme. Te ope source sofware moeme deeloped from a excepoally srog user-led form of ope oao o a full-grow ecoomy olg large sofware deelopme orgazaos as well as ewly creaed compaes. compaes. Ope oao s mog    he oppose dreco. Te opeess was aed by srog parershps amog compaes ad kowledge sues, whch was he followed by collaborao wh lead users. Expecaos are ha  ha he relaoshp bewee be wee lead users ad compaes s gog o deelop furher. Compaes would lke o make use of he relaoshp, relaoshp, bu hey wl wlll also al so lkely l kely ecouer ecouer addoal compecompeo  he form of commues ad ew busesses. Wide Open

Jus as compaes ca o loger do whou he ere  workg ou ew sraeges, collaborao wh commues wll become commo  he fuure. Ts s he  he cocluso cocluso of Demos, Demos, a prome prome hk h k ak  he 8 UK,,  s Wide Open repor. Te repor has a reealg suble: Open UK source methods and their future potential. I md-March 2006, Ncholas Doofro, IBM’ IBM ’s execue e xecue ce-pres ce-presde of oao ad echology, ppoed he eed for more collaborao  arous areas by obserg ha al l he mpora dscoeres had already bee made,  he preous ceury. I s becomg more dffi cul o come up wh w h somehg someh g ew; a “ex bg b g hg” h g” does’ come alog so readly. Cosequely, Doofro defies hs age as oe of oao based o collaborao  ser ces, processes, busess models ad culure: “An era of inventions ended. [...] Innovation was a little different in the 20th century. It’s not easy (now) (now) to come up with greater and different things. things . [...] When it comes to innovation, there is a need to think collaboratively and in a multifaceted manner, as this determines who wins and who loses. [...] Innovation today is more about services, process, business models or cultural innovation than just product innovation.” Nicholas Donofrio, 20069


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2.3 Have others do the work Te ce hg abou mae user oleme s ha compaes ca coer coe r cosumer expereces o  o mproed producs producs more drecly drec ly.. Formerly,, compaes had o use markeg merly marke g repors ad he kowledge k owledge of dedeparmeal par meal cusomer coacs o do hs; ow  s as f users are geerag her ow soluos drecly. Te laguage hey use  hs process s dgal, as mapulao sofware sofware forms a mpora lk  he  he cha. Erc o Hppel,  addo o beg a professor ad jo fouder of Lead User Cocep, s also he head of he Ioao ad Erepreeurshp Group a he MI Sloa School of Maageme. He s cocered wh “user-dre oao” bu also wh he  he democrazao of oae processes so ha eeryoe ca parcpae. For more ha a quarer of a ceury, Vo Vo Hppel has coduced research o user-dre user- dre oao,  oao, bu he dgalzao of socey  rece years has resuled  growg eres  hs research. Vo Vo Hppel ee defies greaer accessbly o sofware ools, especally  he CAD/ CAD/CAM doma, as he mos mpora reaso why oao  he fuure wll be able o profi from user deas. Te oo ha user parcpao ca be useful s already que old. I goes back o a me log before sofware ad oher echologcal ads exsed. I fac, Plao wroe  Te Republic (loosely raslaed  raslaed below) ha  s precsely seasoed users who hae he mos experece ad mus be beer oled  produco: “Automatically Automatically,, we think that the carpenter certainly knows k nows how to make a bed be d or a table. But is it not so that, in the case of a horse only the rider can actually determine what is the best bit or bridle. It is clearly obvious that seasoned users have the most experience. Users have to tell makers what they want, exactly. In this way, they can be served according to their whims.” Plato, Te Republic , 360 BC

Sudes  rece years reeal ha he relaoshp bewee produco ad user eeds s far from seled. I I  fac, somewhere bewee 10 ad 40 perce of all produc users coue o ker wh a produc afer  has bee purchased. Edely here rema may ufulfilled was; may producs do o sasfy eeds. A ceral case from Vo Hppel’s book Democratizing Innovation10 shows how he prcple of user-dre oao works. I parcular, he relaoshp bewee echology (CAD ( CAD//CAM ad ere) ad user eeds s eresg. Vo Hppel’s case cocers ke surfig.

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Open for Business

Open source lessons for innovation

I was’ ul 1999 ha people were see sadg o boards beg pulled hrough he breakers. Ye he ke-surfig marke has ow grow o more ha US$100 US$100 mllo. mll o. A group of ke surfers who were uhappy abou he goods aalable  sores bega o make beer producs hemseles. Usg he ere, her former se www.zeropresge.org (he remader of whch sll ca be foud a www.m.edu/people/robo/zp/zeropresge. hml), ad modelg sofware cosg US$195 US $195 (www.rho3d.com), hey bega o deelop kes for hemseles. A firs, hese desgs had o be compleely maufacured by he group, bu hey soo foud compaes where her dgal desgs could be ploed hrough produco. Te oao cycle became a sreamled sysem ad, soo, hey were ready o moe from desg o ke wh a week. Ter eeds could be me haks o smple smple I. I. Te group was sasfied because hey had a ew ad beer produc ha was ee cheaper ha a ke  he sore. Te creaos were made aalable o her webse, as hey dd o wa o se up a commercal compay: clearly a a  example of ope source. Te desgs were publshed uder a “creae commos lcese.” Ts s a erso of a ope source lcese for creae work oher ha sofware programs. Whe hey were coaced by a cleer busessma who waed o brg he kes o marke, he group dd o hae ay objecos. Afer all, hey had chose hs ype of lcese. Howeer, exsg supplers were mmedaely cofroed cof roed wh aoher formdable formd able compeor. Te ew compay had o spe ay moey o R&D bu could sll s ll offer a beer be er produc a a lower prce. For hs  hs compay, “o eed eed here” proed o be a blessg. ranslating user experience into innovation

Vo Hppel speaks of “oao Vo “ oao ches”  whch whc h users of producs play a mpora role. User expereces ca prode suggesos sug gesos for mproemproemes, ad somemes somemes  s he  he users hemseles who sar he  he mplememplemeao process. Vo Hppel descrbes oao as a process of ral ad error: a desg s made o he bass of experece (Desg), a prooy prooype pe s made (Ru), (Ru), a es s coduced (Ru) ad he fidgs are examed ex amed (Aalyze). Tese seps are foud foud  radoal rad oal R&D R& D bu also  oaos where where users ake he lead. Te process of ral ad error has resuled  oaos for ew car pars, coffee maches, bcycles, lapops ad webses. Laboraory R&D has he adaage ha he ess are ru uder corolled codos, makg  possble o replcae resuls. Te dsadaage s ha he codos eer fully coform o praccal realy. I democrac oao processes (user oao), we see ha users feed her


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expereces back o he orgal org al produc. Te closed erome erome of he laboraory ad he ope user erome  whch oaos ake place ca be exremely complemeary.

2.4 Product innovation in the age of coding I he ype of ope oao ha leads o he produco of a physcal objec, collaborae effor o he dgal desg s fudameal. Taks o he CAD/ CAD/CAM echology of Rho, he ke surfers were ulmaely able o coer desgs o agble producs. Ts le of deelopme from dgal desg o physcal ed produc wll be furher elaboraed  hs seco. We wll beg by cosderg geecs ad pharmaceucal research, areas  whch he relao bewee programmg ad oao s becomg creasgly more profoud. Nex, we wll make a foray o smulao ad hardware rualzao. Te, afer brefly speculag o he dsa d sa fuure of ope source  he aerospace dusry, dusry, we wll w ll coclude wh a dscusso of he Dgal Desger sofware used by Lego. Open innovation is growing

Tere are wo ceral deelopmes ha make  possble for progressely more oao o occur ousde of orgazaos. Te firs oe oles a creasgly creasg ly hgher degree deg ree of auomao. auomao. Te more he majory of produco ad producs become “rual,” “r ual,” he easer  s for ohers o ake par. Te secod deelopme has o do wh produc cosumers adapg he echology. Because he echology s smpler, less expese ad cosequely more accessble, he umber of people parcpag  ope oao s o he rse. Open source collaboration in genetics and pharmaceutical research

I geecs ad pharmaceucal research, researc h, ope source collaborao s begg o grow  mporace. Jus Jus as wh CAD C AD//CAM sysems s ysems  whch a ke ca be deeloped, he desg of a ew medce s creasgly depede o specfic sofware. Te umber of web-based ad ope source ools for bo-compug ad gee aalyss s seadly rsg. For example, he ope source plaform SourceForge cludes AMOS, AMOS , “A Modular, Ope Source Whole Geome Assembler” (amos.sourceforge.e). Ad przes are awarded o scess who suppor he ope source model  bo-compub o-compug, such as he Oero prze preseed o Ewa Brey by he Ieraoal Socey for Compuaoal Bology. 11

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Open for Business

“Dr Ewan Birney [...] was awarded the 2005 Overton Prize in honor of his advocacy of open source bioinformatics, and his generous contributions to the BioPerl community. Perhaps even more important to biology is his leadership of the Ensemble genome annotation project [...]. Dr Birney [...] credits the success of the Ensemble project to the open source development model.”

Sephe Maurer, a law sude a he Goldma Sachs School of Publc Polcy a he Uersy of Calfora, made a appeal a he 2004 aual boechology coferece  Sa Fracsco for he applcao applc ao of a ope source approach o he deelopme of medces o rea ropcal dseases. Te webse of he ropcal Dsease Iae ( DI DI), ), www.ropcaldsease.org.,, prodes a meas for chemss ad bologss o work ogehdsease.org. er. Te Te echology has h as ow progressed o such a po ha Maurer expecs he greaer par of he work o be doe whou “we laboraores.” Te rua r uall work ca be coduced, coduced, for he mos par par,,  a ope source maer because he adaced dgal ools make hs possble. Fgure 2.1 llusraes how he worlds of bology ad compug are comg ogeher ad how hs s leadg o he produco produco of medces  rual r ual pharmaphar maces. For sace, collece research beg doe o malara ad oher ropcal dseases such as schsosomass s  s posed o hesyapcleap hesy apcleap.org .org.. Wh regard o schsosomass, research s beg coduced o mproe he drug Prazquael. Ts ope source bomedcal bomedcal sudy s clearly arge argeg a umber of of ery specfic dseases d seases o whch he pharmaceucal dusry ges lle prory. Te ropcal ropcal Dsease Iae was coceed o brg abou he deelopme deelopme ad produco of medces for hese  hese ropcal llesses. Kowledge of bology, chemsry ad boechology s brough ogeher  a ere commuy of uerses, laboraores, scess ad sues. Te rual r ual formao  formao mapulao compocompoe (compug)  he research plays a key role  hs model. Besdes he oluary corbuo of researchers, “rual pharmas” mus be esablshed. Tese are o-profi eure capal orgazaos promog he deelopme of promsg medces for he ropcal Dsease Iae. Tere are wo domas  whch ope source deelopme  he medcal field s ewed as hag a grea deal of poeal. Te firs oles o-paeable o-pae able medces. medc es. Tese are medc medces es for whch he paes hae expred ad furher fu rher commercal research s o profiable profiable because proecproece paes do o exs. Image, for example, ha aspr had he poeal o cure cacer. Te pharmaceuca pharmaceucall dusry could o be expeced o ae such research. I s more lkely lke ly ha a ope source commuy of scess ad sues would uderake he ask; hey mgh be wllg o ac for reasos oher ha moeary ga. Te secod doma oles medces ha, for some oher reaso, do o offer ay prospec of


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commercal success – because hey are used  he reame of ery rare dseases, for example.

Computing Databases genome sequences

Databases protein structures

PubMed (journals) Sequence similarity searches

Virtual ligand libraries

Other databases Protein structure modeling

Proteinligand docking

Literature searches

Functional annotation

Virtual pharma Leads

TDI • Target discovery • Lead discovery • Lead optimization Chemistry Synthetic chemistry

Compound libraries

Highthroughput screening

Biology Protein production Structural biology

Protein engineering

Substrate specificity studies

and other development organizations Toxicity and pharmacokinetic evaluation Clinical studies Drug production

Target validation

Drugs

Figure 2.1: Information manipulation (computing) is a key element in the research into tropical diseases

Factory simulation and hardware virtualization

Facory smulao s a good example of rual desg ad esg  a lfe-lke erome. A www.facory-smulao.com  s clear ha leadg orgazaos  may dffere fields beefi from hs ype of sofware: Boeg, Brau, DHL, DHL , Excel, FedEx, Gllee, Goodyear, Hoda, Hoda, LockLoc k-

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Open for Business

heed Mar, Mael, Nssa, Norhrop-Grumma, Norhrop-Gr umma, Semes, Semes, N, N, he US Arr Force, he US Army A Ar my,, he US Nay, Volks Volkswage wage ad Whrlpool. Wh rlpool. Ee he sae-of-he-ar sae-ofhe-ar r  rual ual es lab of Vruech, Vr uech, whch was used  such projecs as he Irdum Saelle, fires he magao mag ao  hs coex. Eliminating virtual deficiencies saves a great deal of time and money Example: Factory simulation using Flexsim

Facory smulao ca faclae Facory fac lae beer maageme of ay ge facory. Tere are a umber of ways ha cosly produco me s los    a facory, ragg rag g from mproper alloca al locao o of huma resources o suffi su ffice supples of maerals. Varous compoes mus also egrae seamlessly wh each oher a he rgh me. Boleecks ca be creaed by oe rug oo far ahead of he oher. All producers ry r y o aod such jams. Oe way of dog hs s by usg smulaos o prode sgh o he operaos of a ge facory ad poeally poeal ly mproe performace. Greaer kowledge of he produco specficaos eables beer adjusme of he relea relea  compoes compoes  order o aod problems.12 Example: Te virtual Virtutech test lab

Nowadays, compaes compaes are beg cofroe cof roed d by creasg complexy ad coss of esg. Ts demads dema ds oae soluos. Oe way of resolg resolg hs problem oles oles full-sysem full-s ysem smulao usg rual r ual hardware, ad hs uderake u derake que early  he  he deelopmeal deelopmeal process. Rece Rece echologcal breakhroughs ow make  possble possble for rualzao rua lzao o cosruc a sofware model ha ca smulae a complee sysem o a PC . Ts rualzao s so accurae ha  s o oly able o program he code drecly o he ed produc bu  ca coec o oher sysems ha hae o work ogeher.13 Example: Iridium simulates aerospace software with Simics

Smcs has bee deeloped o make  possble for sofware deelopers o program rual hardware so accuraely ha he sofware ca o loger deec ay dfferece. Each code, from applcaos o real-me real- me operag sysems ad dece drers, ca ru o hese smulaos. Irdum uses Smcs o research how exsg ad ew sofware works  saelles. I furshes deelopers wh peerag sgh, as a resul of whch he performace of flgh sofware ca be mproed. 14 Te production of an open source airplane

I s a rgug queso wheher somehg lke arcraf cosruco could be compleely orgazed  a ope source maer. O he oe


53

had, he queso recogzes recogz es he possbles possbl es of ope source source produco produco ad, o he oher, exposes s lmaos. Charles Gerlach s occuped wh hs ssue. He was a lawyer ad a law professor. He worked for IBM as he head of he Global Commucao Secor a he Isue for Busess Value. Value. Now he operaes ou of Gerlach Space Sysems, of whch he s he fouder. Gerlach’s deas are raher uorhodox. He would lke o ge a program off he groud ha s amed a he exploao of space, cludg mg such meals as plaum o earby plaes. Gerlach s coced ha ope source produco ca help hm realze hs goal. Hs ope-source ambos sere as a mrror for he arcraf cosruco dusry, a hgh-cos hg h-cos ad effice secor whch barely ulz u lzes es kowledge aalable worldwde. I coss los of moey moey o buld a arcraf a rcraf,, ad  s a rsky busess. bu sess. A commuy s o gog o lay dow he cash ad ru he rsks. From such a sadpo, he ope source produco of a arcraf s purely hypohecal. Bu ddg arcraf prod produco uco o a physcal physcal ad a r rual (desgg ad esg) compoe makes  a compleely dffere sory. A parallel could be draw wh he ke surfig example. Ulmaely,, he marke maely ma rke leader was surprsed surpr sed by a beer be er produc produc from a compeor who had o doe ay of s ow R&D bu had used a ope source desg. P rogram,15 Gerlach explores he lms I Building an Open Source Space Program ad obsacles o he applcao of ope source  arcraf cosruco, whch,  Gerlach’s ew, has falle behd  adopg ope source prcples. Te supposed lag has bee caused by he hsorcal ballas of a echologcal echolo gcally ly dre, dr e, herarchcally co corolled rolled produco process. process. Ope source demads a radcal shf. Wha Gerlach depcs srogly resembles he legacy problems  large sofware sofwa re sysems. We kow ha hey cao jus become “group sourced.” If we wa o had a projec oer o a dsrbued commuy, we would firs hae o dde up he code o maageable peces, so ha corbuors ca each work o a poro sued o her experse. Hurdles to overcome

Resrucurg produco s ecessary for he success of a ope source projec dsrbued oer he ere. A secod ecessary codo s more echcal  aure. Whereas a smple CAD/ CAD /CAM package was suffice o buld a ke  he ke surfig of www.zeropresge.org, arcraf desg makes oher o her demads. For a ope source produco produco process dsrbued oer he ere o a large umber of parcpas, he eraco bewee bewee CAD CA D/CAM ad Smulao Based Desg s esseal. Oce creaed, a desg ca be esed mmedaely usg smulao s mulao sofware. A hs me,  me, he sep from desg o esg s sll sl l o fully ful ly compuerzed. compuerzed.

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Open for Business

Howeer, he qualy of sofware ools has creased eormously  rece years, ad he ope source desg of a arcraf s  s ow, ow,  prcple, whw h arm’ ar m’ss reach. Esse Es seal ally, ly, we ca desg ad es es  whou w hou much dffi culy ad whou exra esme. Charles Gerlach mages hs dream realzed by he combao of ope source produco ad radoal supplers. I would be jus as  he ke surfig surfi g example, bu wh he dffere d fferece ce ha esg he  he desged producs becomes purely he work of compuers. compuers. NASA has already a lready dared o sed he Mars Pahfider o s msso wh ope source sofware  crcal sysems. Perhaps hs wll smooh he way for a subseque sep: he applcao of more ope source prcples  a “space projec” such as he oe esaged by Gerlach. Lego uses Digital Designer to open up its innovation process

Lego has bee mplemeg aes o hrow  hrow ope s oao procedures sce 1999, bu 2003 was a breakhrough year for he compay. Ta s whe Lego came ou wh w h “Facory,” a ere se o whch more ha 3,000 sors hae made housads of Lego desgs. Lego selecs he bes, whch he ur up o sore sheles alog wh a phoo of he desger o he back of he box. Mark Hase of Lego has some houghs abou maufacurg producs  hs way: “Te ideas of what you can do with this is endless. It’s just the tip of the iceberg [....] Lego isn’t special. Any company out there can do something like this.” Mark Hansen, Lego

. . . .

Lego Dgal Desger s he sofware for buldg wh Lego ad  represes he key o he ope-oao success of he compay. Ts CAD produc for 3D desgs ca be dowloaded from he Lego se. Ee chldre as youg as see ca parcpae. Each desg s posed o he se ad ca he be ordered ole. Te desg sofware auomacally delers packg lss o he facory. Te process s depced graphcally  Fgure 2.2, alhough he al par of Sep 2 (“Craes of Lego brcks are mpored from Europe”) s rrelea o he Europea marke. I s cusom work for he masses, bu  s much more ha ha. Mark Hase, he perso resposble for Lego Facory, Facory, he se where all hs h s s happeg, calls  “markeg wh cosumers” ad defies four esseal adaages of hs model: feedback from he cusomer; recommedaos by he cusomer; oao; ad co-creao.


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Figure 2.2: Open innovation innovation at Lego thanks to usable us able design software sof tware

Obously, he drec access o cusomers s mpora o Lego. I prodes Obously, feedback for he compay’s ow maufacured producs. Ts s doubly eresg for Lego, Lego, as ormally ormal ly coac oly occurs hrough he pares of he ulmae arge group, chldre. Recommedaos by cosumers o oher cosumers hae a reforcg reforcg effec. Ad fially, fia lly, he creay of he commuy ca be added o he -house creay  co-creao: cosumers make her ow desgs bu may also collaborae wh Lego’s ow desgers. People parcpae uder he codo ha her desg desg  mus be orgal. I mus o represe ay perso or a produc of oe of Lego’s compeors. Oce Lego Facory has screeed he desg,  s mmedaely posed  he produc gallery, alog wh a quay qua y of formao abou he maker such as ckame, age, coury of resdece, ame of he desg, ad a descrpo. Each submsso auomacally becomes “publc kowledge.” Commucao wh he Lego commuy occurs  arous ways, cludg hrough a message board o he Facory se.

Figure 2.3: Commun Communication ication among creators occurs on the Lego Message Board

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Open for Business

Ts ew form of commucao has opeed may eyes a Lego; coll collaboaborao ad co-creao hae become permae elemes of he culure. Based o expereces wh he commuy, Lego has formulaed e lessos for ope oao. en open innovation lessons from Lego

. . . . . . . . . .

Udersad how alue s perceed. Ierac frequely, opely ad hoesly. Kow yourself, ad ow up o msakes. Ecourage coersaos bewee cusomers. cu somers. Seek ou he rgh persos ad ask hem o parcpae. Formal Fo rmalze ze wha ca be formalzed. Parcpae: you ge back wha you pu . Do’ maage he Do’  he commuy bu spre s pre . Do’ sell bu show passo ad share passo. Do’ I’s OK o say “I do’ kow.” Ts ls clearly demosraes ha he sor of “jo” produco a Lego meas ha Lego L ego people mus o place hemseles aboe he commuy. No sales pches, ohg really o maage, jus be ope ad hoes ad parcpae whou ay preesos  he commuy: ha s he lesso o be leared.

2.5 Open innovation is something typical of our generation Chld re as youg as see Chldre see are workg wh he CAD C AD package pack age from Lego. Lego. How log w wll ll  be before hey beg o parcpae par cpae  oher ope oao programs? Icreasgly more people are becomg dgally ace ad more adep  usg he compuer. Tey make ope source sofware, work wh CAD/ CAD/CAM ad/or commucae wh compaes oer he ere usg pla laguage. l aguage. You Y ou mus be que sklled skl led  order o ake par  desgg desg g a arcraf, arcraf , bu a ke surfig desg s o easy eher. Te more ha sofware mproes ad s smplfied, he more hese hgs come wh reach of a creasgly large group. Deelopme s hadled by dduals capable of dealg wh he dgal processg of formao. Our geerao s characerzed by dduals who are becomg progressely dgally ace. A he begg beg g of 2004, redwachg.com, redwachg.com, a eraoal eraoa l ework of 8,000 red aalyss, coed he ame “Geerao C” for hs group. Te “C” sads maly for coe, creay ad commuy. “C” for “cosumer” should o be cluded, sce wha makes Geerao C uque s he fac ha  s cocered wh produco raher ha cosumpo. Tere s a shf from cosumer o “prosumer”: he co-producg cosumer eabled by moder echology ad he ew meda.


57

Te redwach agecy agecy oules oul es a umber of of characerscs characer scs of he ew geerao: Generation Content... is creative; creativity is the path to content. We are all creative. Being creative is also permissible; parents are no longer concerned to limit the creative aspirations of their children, as it is now evident that such careers have practical potential. Generation C wants to be the “master of their own destiny,” or at least have the idea that they are in control and not governed by others. Tey want to be praised and honored; they want to be famous.

Te musc edor MF makes opmal opm al use of he Geerao C red  red by hag s ewers co-buld persoal profiles o he MF se. Oher meda are also seg se g ewers ad lseers o work. work. MV M V has s Star zine, a ole magaze ha s fully produced by ewers. Tey ca sed phoos phoos ake wh w h her cell phoes o Starzine ad hae hem appear  her ow magaze. “Sap, Sed, She. Fame s jus a clck away.” Bu ee old-school broadcasers lke KRO (he Caholc Broadcasg Sao  he Neherlads) hae ow dscoered ha hey ca use audece creay. Wh “buld your ow alar” KRO has brdged he gap bewee her esablshed dey ad egagg he ew geerao o creae for hemseles. Geerao C s ace o ere blogs. A www.lulu.com, youg people are able o realze he Starzine credo: “fame s jus a clck away.” Te ole publsher offers he publc he opporuy o publsh books o he  he ere ad o pr hem  ay a y desred forma ad layou, o demad. Ee he prce ca be se by he cusomer. Noably, Jule Powell has ow sold more ha 100,000 copes of her book, book, ad    2006 she wo he firs Lulu Blooker prze, he prze for he bes blog book. Lulu.com presely umbers more ha 40,000 books ad grows g rows by 10 perce eery moh. I s o cocdece ha he fouder ad boss of Lulu s also he co-fouder of he Red Ha ope source compay compay.. Below we prese wo examples of ope source produco  he clohg dusry.  dusry. I’ I’ss srkgly sr kgly ede, ee  hese examples, ha a compee eleme eleme s ofe employed employed o moblze mobl ze he creae c reae class. A Treadless, we ca w przes, pr zes, become famous famous ad make freds. fr eds. I he case of Flueog, moey s o oled a all;  sead, ’s ’s all al l abou recogo, whch whc h s wha Joh Flueog belees s a he hear of ope source.

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Open for Business

Treadless -shirts

“W fame, freds & $500  cash & przes” s he easer for Treadless, a oleol e- -shr -shr desg compeo. Ayoe caparcpae capar cpae ad sed  hs or her ow -shr desg. Te Treadless commuy chooses a wer oce a week. Te shr s pred ad ca be ordered. Treadless s a maufacurer ha makes cleer use of Geerao C. Tere hae already bee 30,000 submssos o dae ad 1,500 more are added eery week.

Figure 2.4: Become famous, design a -shirt (www.thr (www.threadless.com) eadless.com)

Treadless has ow bul up a colleco of wo hudred dffere shrs. Te open source shoes of John Fluevog

“Ope Source Fooware”16 s a ae of shoe desger Joh Flueog. Ts successful Caada has sores  he Ued Saes ad Caada. As par of hs ow ope source projec, he es cusomers o help co-desg he ew colleco. Ts represes eough of a promse of eeral fame ha people wllgly parcpae, as hey mgh be rewarded by becomg a co-desger of a orgal Flueog shoe. • Te shoes are amed afer he desger. • Te desger s made a member of he Flueog Desg Alum, a selec group of people whose desgs hae bee chose.  he box ad somemes ee o he • Te ame of he desger appears o he shoes ha are acually roduced o produco.


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Figure 2.5: Purchase open source shoes or design them yourself

Te example of ope source foowear mgh seem somewha frolous, fr olous, o  he leas because of he way  whch Flueog preses he whole dea. Wh humor ad equocao ouchg o roy, he summos eeryoe o ake par. par . H-ech equpme s o ecessary ecessary;; a scrbble o a beer ma mgh be eough. Joh Joh Flueog regularly regula rly goes hrough he laes submssos whe he s lookg for ew desgs. Afer wo years, more ha hree hudred serous submssos hae come  ad e shoe desgs hae bee seleced (ad amed), such as he “Aasasa” “Aasa sa” shoe model, se  by a woma  Russa. Despe he somemes comcal characer of hese examples, he mpac  mpac of such deelopmes should o be uderesmaed. Te macro-ecoommac ro-ecoomc mporace of Geerao C was emphaszed  2002 by Professo Professorr RchRc h17 ard Florda  hs book Te Rise of the Creative Class. Creao by dduals s he curre red, ad compaes able o draw o hese ew sources of creay are cleerly explog hem o her adaage. Te ere coe-creag geerao s aurally much larger ha he commuy of sofware sofwa re deelopers. More More ha half ha lf of he people who 18 are ole hae made her ow dgal dg al coe, rag ragg g from phoos o poery, deos, ad le webcam mages. If we apply Amerca sascs o he ere ole populao, we would esmae ha here are half a bllo dduals who belog o Geerao C. A subsaal proporo of he world populao ca be regarded as dgal producers. Te oly dfferece bewee amaeur ad professoal s ha he pros are pad for her work. Cao recely emphaszed hs fac  he aderseme for s Opura camera by accompayg he phoo  Fgure 2.6 wh he capo, “I leaes oe dfferece bewee you ad a professoal. Tey ge pad.”

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Figure 2.6: Te difference between the amateur and the pro: the pros are paid for it

2.6 Webservices: light-weight software for business innovation Oe facor accelerag he deelopme of ope oao s he emergece emerg ece of webserces. Wh a webserce (a modular pece of sofware),, a ge self-deeloped serce ca smply be lked ware) l ked o oher serces. Coersely, he webserces of ohers ca be added o he serces you prode. Webserces offer arous ar ous opos ha promoe ope oao: • obag exeral kowledge usg ew serces deeloped by ohers as a sor of Lego block o be added o your ow serces; • allowg ousde people o parcpae  he deelopme of webserces for your ow orgazao  he same way ha people co-buld ope source sofware; • allowg ohers from ousde your ow orgazao o coue o buld up her ow deeloped serces, producg ew orgazaos as freque ad drec sp-offs of he orgal. Webserces are popular. Webserces popul ar. I oly akes a few egeers eg eers o make somehg eresg ad appealg, appeal g, herefo  herefore re  becomes much smpler o program he busess, as  were. Te Financial imes used he word “dsrupe” ofe  descrbg hs deelopme  s ssue of md-Noember 2005. Learg from he expereces of he firs users ad he makg adjusmes corbues o success. Le ha also be a ypcal ope source characersc.


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We no longer have to do much to produce new business applications “[Bill Gates and Ray Ozzie warn] that the latest phase of online innovation [is] likely to be “very disruptive” to the industry’s established powers. “Tis next generation of the internet is being shaped by its grassroots adoption and popularization model [...]” “remendous software-and-services activity is occurring within startups and at the grassroots level [...]” “o those who are in the midst of it, it amounts to an entirely new way of producing and delivering software [...]” “Te Web 2.0 crowd has discovered how to create internet services with mass market appeal on a shoestring. Te watchwords of this approach: wherever possible, develop ‘lightweight’ software from standard technology building blocks that can be released quickly over the web, then learn from the experience of early users to refine the service [...]” “With Web 2.0 you can be talking about just a couple of engineers building something interesting and compelling.” Financial imes, 17 November 2005, p. 1519

We are creasgly able o budle he approprae sofware compoes ogeher  order o buld powerful ad compellg ere applcaos swfly. Te webserce approaches of Amazo ad Google are parcularly good examples exa mples of hs pracce. Accordgly, he IDC research bureau made he followg predcos abou deelopme  he I secor  2006. Fe ceral ceral gredes are brough ogeher  IDC ’s forecas: dsd srupo, ope oao, ope source, commues ad he moder  20 ere (he Google effec or Web 2.0). As IDC pus : IDC on the I sector in  We observe a critically new ingredient and that is the acceleration of disruptive business models – opening innovation – in I products and service development (the open source effect) and the online delivery of I in the form of services (the Google effect). Te “I-go-forward-completely-on-my-own” model of innovation has become an extinct species in the I industry and the incorporation of a community-based innovation model (such as open source) is very rapidly becoming an important ingredient for market leaderships. IDC is convinced that the building up of openinnovation communities will be the big focus of I leaders in 2006, including Microsoft.

IDC dsgu ds gushes shes he Google effec ad he ope source effec. Te Google effec s assocaed wh he acceleraed deelopme of ew dsrupe busess models. Te I secor ad busess oerlap each oher a hs po, as Google s a dgal compay ad a busess serce proder a

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he same me. Te ope source effec s relaed by IDC o commues, ad IDC asuely remarks remark s ha compaes whou commues are a dyg breed. Webservices compete with open source developers

Te ope oao sraegy sraegy of eBay s, o a sgfica sg fica exe, cocered wh commuy oleme  he buldg of eBay webserces. eBay appeals o ddual deelopers ad herefore compees usg ope source projecs. Jeffrey McMaus, who was resposble for he webserce program a eBay ul Aprl 2005, explas o hs webse how he was apprehese abou a forum dscusso orgazed by publsher m O’Relly.21 Te dscusso was o be abou he hrea ha webserces posed o he ope source commuy. I s rue ha he webserces of eBay are less free ad ope ha ope source sofware. Bu a sofware deeloper ca apply he fucoaly fucoal y  a way smlar sm lar o how ope source sofware s used. Te bg dfferece oles he codos uder whch webserces may be used. Isead of he crcal quesos abou he ehcs ad freedom of hs webserces ha McMaus had expeced, a ypcally lely dscusso ook place cocerg he possbles of geg oled ad parcpag. Edely, deelopers sll hae a log way o go  embracg creay. I Chaper 4, we wll w ll dele more more deeply o wha moaes people people o jo hese commues.

2.77 Open innovation at Amazon, Google and eBay 2. Te ere cos Google, Yahoo, Amazo ad eBay hae already al ready foud a way o corporae ope oao. Orgazaos ad deelopers ca make use of he search eges, websore ad he world’s larges auco for her ow purposes. We  I are accusomed o speakg abou re-use, bu  hs coex he alk s abou “mash-ups.” Ts s a erm from he hphop scee meag a mxg mx g ogeher of wo or more soudracks. Bre aylor, a ylor, produc produc maager a Google, Goog le, has grea g rea expecaos expeca os of comparable mash-ups, bu hs me  he areas of sofware ad fucoaly. “Frankly we like new and innovative solutions. We expect new and creative ideas to come out of this that we haven’t thought of yet.” Bret aylor, aylor, Google product manager, 200522

“Te web was orgal or gally ly desged o be mashed up,” up,” says Google deeloper Aaro Boodma  BusinessWeek.23 Boodma s he desger of Grease-


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mokey, a program for mash ups. I s used, for example, o he Amazo mokey, Ama zo webse o dsplay he prces of compeors, as show  Fgure 2.7.

Figure 2.7: Competitor prices on the Amazon site as a result of a “mash-up”

I hs h s way, way, formao ca ca  be mxed ad ew serces ser ces creaed based o re-use. Te oable hg s ha hs pcure makes  seem as f Amazo were prodg he formao self. Ts s how  works: “Greasemonkey lets you mash-up websites. It lets you extend and script websites and integrate that script right into the original site as if the designers had intended it to be there. It lets you use their web site, their data, their servers, their work to serve your purpose and function. Tere will soon be an army of hackers enhancing every site you use. Whether that site likes it or not.” NIVI blog, 200524

I md-2005, Google released he equpme eeded o make mash-ups based o he map formao of Google Maps. A lle laer, s compeor Yahoo made s ow ow  maps freely aal aalable. able. Te offica call release of he Applcao Program Ierfaces ( API ( APIs) s) formalzed wha was already happeg, as may deelopers were makg use of he maps. Google ad Yahoo ow wa o allow her map daa o be mxed wh ses  order o perform asks such as fidg persoel or recommedg prces. Maps wh zoom- capably ca ow be foud o may ses haks o he mash-up opporues allowed by Yahoo ad Google. “Weres  he area” or or “houses “ houses for for sale  my prce class” c lass” are subjecs ha h a mash-ups ca address. A eresg mash-up ca be foud a www.chcagocrme.org. I ca be used o esgae esgae he exe of cr crma mall acy ac y o each each sree  he area aroud Chcago. Ts s formao ha he local ours bureau or a realor cao prode bu may hae a grea fluece o he search for a ew home.

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Open for Business

Figure 2.8: How safe is it there? A mix of information programmed by a user

Behd he  he opeess of eBay, eBay, Amazo, Yahoo ad Google s he dea ha oao s smulag. Rp-ad-mx fucos fu cos o esure ha he echology of hese compaes spreads uchecked all oer he ere. Te resul s ha a subsaal subsaa l par of Amazo’ A mazo’ss sales comes from hs kd k d of mash-up se. Esmaes dcae ha aroud e mllo requess are receed oer Amazo webserces eery day. 25 Mash-ups prode beefis o he compay  oao ad markeg whou ay fiacal cos o he compay. Paul Lee, geeral maager of Yahoo, says he followg abou mash-ups: “It’s essentially research and development and marketing for us.” Paul Levine, 200523

I makes use of deelopers who are o o your payroll. Tey o oly do he work bu also ake  ake care of promog . Te busess model based o mash-ups dsplays,  hs sese, a grea deal of smlary wh models olg ope source. Ee he wo larges ere sores, eBay ad Amazo, hae opeed her doors o ayoe wshg o employ her echology. Sofware deelopers ad web realers use he APIs API s ad base her ow webserces o hem. Jus as wh w h ope source, deelopers work here  commues ad are,  hs case, “assocaes.”


65

Amazon’s Mechanical urk

Ama zo’ss Mechacal Amazo’ Mecha cal urk s a humorous example of ope oao. I’s so fuy precsely because  showcases oao solg he queso of how o ge all he brgh mds hroughou he world workg for you. Ts example ad he followg (NASA ( NASA’s ’s Clckworks) show ha webserces ca be used o ousource sadard work o people ousde a orgazao. I Noember 2005, Amazo aouced a surprsg ew bea applcao olg a a  uerly smple ask: selecg selec g a good phoo from a se of abou sx comparable mages. Tere are compaes whose ser ces ole phoographg eery buldg o eery sree  a cy. From he may housads of phoos made each day, a seleco mus be made of hose ha prode he bes mages of he buldg. Ts ask quckly becomes labor ese. Te ere prodes a way ou, as he work ca be ousourced o ayoe who s wllg o do . Te specal feaure of hs applcao s ha ayoe who akes par s pad. A few ces for each seleco. Whoeer works hard couously ca easly ear a few dollars a hour. Te moey s creded o a persoal Amazo accou ad, f ecessary, rasferred o a perso’s bak accou. Amazo ames hs serce “arfical arfical ellge ellgece” ce” wh a roc referece o he arfical ellgece ha we’re famlar wh. Isead of compuers mag huma ellgece, a web applcao aps o he ellgece of housads of people.

Figure 2.9: Amazon’ Amazon’ss artificial artificial intelligen intelligence ce

Amazo calls hs, appropraely, s “Mechacal urk.” Te erm refers o a apparaus ha Wolfgag o Kempele deeloped  1769. I was a chess mache ha could bea eeryoe ad looked lke a huma, a urk  hs case. Te hdde realy was ha he acos of he mache were drecly corolled corolled by a ma  he backgroud. Amazo’s Amazo’s “arfical ” arfical ellgece works  he same way. You expec ha he compuer does he work, bu ulmaely  s performed by people  he backgroud. Clickworks from NASA

NASA also ousources work oer he ere  a smlar maer. Recogzg craers o Mars, o deerme he age of areas o he plae, had

66

Open for Business

preously bee he work of hghly pad scess. Trough he ere, hs ca ow be performed by ayoe who was o crcle hem. 26 Aga, hs s moooous work ha,  accordace wh he prcple of Amazo’s mechacal urk, has bee ured oer o a large group of olueers.

Figure 2.10: Clickworks: NASA’s NASA’s Mechanical urk

2.8 Open innovation at oyota I Aprl 2006, BusinessWeek publshed a large-scale sudy of 1,500 eraoal compaes. 27 Te sudy examed he oae power of orgazaos ad raked he  he world’s op mos oae compaes. oyoa oyoa placed fourh. Tey eared hs h s rakg rak g o oly oly due o a ery oae produc, he hybrd car, c ar, bu also because of her he r process oao. oyoyoa s defied as “a maser of maufacurg oao.” oyoa s esely cocered wh maxmzg he use of kowledge sde s ow compay walls. Prcples of self-deermao, such as hose promely ecouered  he produco of ope source sofware, are employed by oyoa o make he greaes possble use of house kowledge. I hs respec, oyoa reflecs a larger f somewha eae red. May compaes expermeed a grea deal wh selfmaagg eams  he 1990s, alhough oe of hem we as far as he self-maageme foud  ope source sofware produco. Bu oyoa’s pracces are eresg because he compay was forced by crcumsace o pu he prcples of self-deermao o more exese pracce, ad so dscoered ha hey fuco remarkably well. Admedly, hs exeso of he prcple s o drecly relaed o self-deermao sde he compay, as  oled parers ad supplers. All he same,


67

he success  hs case has sregheed oyoa’s coco ha hs orgazaoal prcple pr cple acually acual ly fucos fuc os well, ad has h as boosed oyoa’ oyoa’ss cofidece  applyg  erally. oyoa ow makes use of a umber of ope source orgazaoal orgazaoa l prpr cples. I he produco les, where employees ejoy a large degree of self-maageme, ad  a crss cr ss suao, oyoa oyoa has dscoered d scoered ha a ope source ype of produco ca be exremely effece. Phlp Eas ad Bob Wolfe of he Boso Cosulg Group see lle dfferece bewee how Lux was creaed ad he maer  whch whc h oyoyoa operaes. Te lesso ha oyoa oyoa leared afer af er he dsaser dsa ser of 1997 has ured hs compay o a hybrd orgazao wh a combao of self-maageme feaures ad op-dow maageme pracces. Ts makes oyoa oe of he firs dusral compaes o apply he laws uderlyg he ew ecoomc order  he I secor o dusral chas of produco. Te crisis

• • • • •

O February 1, 1997, fire broke ou  he facory of suppler As Seka. Wh a few hours, early all he maches ad eory we up  flames. As Seka maufacures car pars, he so-called P-ales ha corol he supply of brake flud. Bu ee more mporaly,  suppled 99 perce of oyoa’s P-ales. Whe he fire broke ou,  caused a major problem for oyoa. Because of s jus--me supply sysem, oyoa quckly ra ou of pars ad car produco groud o a hal. I a “rescue-oyoa-from-he-fire “rescue-oyoa-from-he-fire operao,”  was decded ha  ha As A s Seka’ss desgs for car pars would be ge o ay supplers who asked for Seka’ for hem. Supplers would also be proded wh all he assocaed compay kowledge ( bref, he complee “source code”), code”), cludg clud g a small amou a mou of produco equpme salaged from he fire. Produco was sared  more ha sxy locaos; parcpas  he rescue operao raged from oyoa’s ow facory o supplers from ousde he secor, ee a sewg-mache maufacurer. Afer hree days, a suppler of weldg equpme was able o deler he firs housad pars o oyoa. Oher supplers quckly followed. Ts way of workg possesses he followg ope source characerscs: Tere was a grea deal of mprosao. Tere was o commad ad corol srucure. A grea deal of effor was expeded. Eeryoe worked ogeher. No oe was pad for hs or her effors – oe moh afer he dsaser, As rembursed he drec produco coss of hose of s rescuers who were  eed.

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Open for Business

O February 3rd, produco had bee compleely haled, bu wo days laer  was aga up ad rug.

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31-1’97 Date

Figure 2.11: Production back in operation as a result of an open source s ource approach

Eas ad Wolfe make he comparso wh a serous aack by hackers o a Lux serer  Ialy  December 2003. A he Uersy of rese, a aack o a Lux serer serously damaged par of he kerel programmg ad caused a secod problem  he file exchage mechasm. Te Iala sysem maager called Amerca ad Ausrala members of he ope source commuy. Wh a few hours, he leak was foud ad a day laer a pach was ready o be se hroughou he worldwde Lux user commuy. A few days laer, he sysem maagers se up a rap o race he hacker. h acker. wey wey people parcpaed par cpaed  he ere e re operao ad, afer a successful cocluso, eeryoe was haked ad ack owle owledged dged by ame. Ts case oled he same characersc maer ma er of collaborao collaborao ha had occurred  he oyoa crss. Lower transaction costs

I a crss suao, oyoa embraced uorhodox maageme: o coracs, o srucos, o herarchy. Isead, here was rus ha eeryoe would do her bes o fid a soluo as quckly as possble. Whou wasg me ad moey o couless meegs, aco plas, projec goalss ad exra goal ex ra maageme, ma ageme, oyoa foud a ery expese ex pese ad effi ce meas o re-esablsh produco. ypcal Japaese dscple, s wha skepcs mgh say. Bu ye.... Te curre oyoa orgazao has o adoped he ope source approach  s erey. For sace, here s ceraly a radoal herarchy ad here are coeoal labor agreemes wh employees, who are


69

. . . .

pad for wha hey do. Sll, oyoa presely presely allows more self-deermaself-deerm ao ha oher maufacurg compaes. oyoa persoel maageme does o focus o persoal goals. Compay prde ad peer eseem are alued hghly. Employees are ge he laude o experme o he produco le whe hey hae deas abou mproemes. oyoa capalzes o he experse ad he rsc moao of s employees. Smlar Sml ar o he ways  whch ope source projecs use smple ools as lssers ad e-mal, e-ma l, oyoa prefers prefers o make work-floor operaos as smple as possble. ape marks o he floor dcae he me desgaed for aces, ad produco ca be followed o moors. Eeryoe ca ew he formao: he head of produco  Caada kows precsely wha he hches are  Japa. Te Boso Cosulg Group adses compaes wag o mpleme ope source echques o buld hrg huma eworks. 28 o achee hs requres smple echology. Keep  smple ad ope. Smple Smple ools are he bass of good collaborao. Te adaage of choosg smple, sadard echology s ha  creaes smple semacs ad work procedures. I addo, he work mus be as raspare as possble. If here s o good reaso for hoardg formao, he release . Allow people o filer her ow formao ad exrac wha hey requre. Modular hkg helps, because  squares wh Busess Process Re-egeerg, a heme ha has bee resoudg hrough compaes sce he las decade of he preous ceur ceuryy. Modular hk h kg g ad workg s a sadard grede  ope source projecs. Ad eamwork s he decse fourh grede: reward he group, ad he group wll reward you. Celebrae he successes of a eam ad dsmale ddual performace bouses. Tere are four gredes of successful huma eworks: Choose smple echology as your sadard. Make work raspare. Tk modularly. Ecourage eamwork.

2.9 2. 9 Open innovation at Procter & Gamble Procer & Gamble has defied ope oao as a sraegc goal ad decreed ha half of all oaos mus come from ousde he compay. A wo-rack sraegy s pursued o achee hs goal: firs, here mus be ace maageme of ellecual propery, such as Hery Chesbrough adocaes  hs book Open Innovation,29 ad secod, here mus be oleme of oao commues ousde he compay’s ow orgazao. Te rece success success of oaos  oaos a Procer & Gamble was arbuable o a rgorous uraroud ur aroud  he maer  whch whc h oao s coceed. coceed. “‘No eed here’ was somewha somewha a dscoery dscoer y of Procer & Gamble” jokes

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Open for Business

Jeffrey Weedma, ce-presde of exeral busess deelopme a Procer & Gamble. Now, he says, “We eed o be ery ope o he dea of brgg  echologes, busesses, ad producs from he ousde.” 30 Te o-eed-here sydrome has bee allowed o ru s course, ad ow ope oao has become a par of compay sraegy. I s creas cre asgly gly more dffi d fficul for Procer Pro cer & Gamble Gambl e o geerae eough bg deas o keep he ege of a large compay rug. I 1999, he ew CEO a he me, Durk Jager, gae eormous mpeus o he compay’s ow eral oao. Ts appeared o be he soluo, bu  soo became clear ha dog hs durg a re-orgazao was askg oo much. I 2000, Ala Ala  Lafley ook up he bao ad mmedaely aouced a ouced he goal of hag half h alf of fuure fuu re oao come from ousde ousde Procer & Gamble. Accordg o he compay’s ow esmaes, oe ad a half mllo scess from all oer he world possessed experse ha was relea o Procer & Gamble. I seg se g he ew course, he maageme ma ageme of ellecual propery came uder scruy. Preously, Procer & Gamble had oly raded ellecual propery wh whch  could do ohg self; ow lceses were beg ssued regardg all paes. Tree years afer Procer & Gamble has brough a produc o marke, or fie years afer  has bee graed a pae, ay oher pary ca oba ob a a lcese for ha produc. Ts ges Procer & Gamble he lead as he firs o he marke ad, a he same me, geeraes oaos oer he course of me as well as lcesg reeue. Addoally, he ew lcesg polcy compels oher compaes o compee compee wh Procer & Gamble. Kowg Kow g ha he pae s gog o come o he marke, you would hae o hk wce abou deelopg somehg smlar.

2.10 Open innovation in seeker-solver networks I he hu for kowledge ousde ousde of he orgazao, orgaz ao, Procer & Gamble ad such compaes as El Llly Ll ly make eager use of kowledge brokers brokers such as Iocee ad NeSgma. Tese compaes prese her problems o eworks ad acqure ew deas ad soluos from hem. Iocee s a sp-off esablshed esabl shed by s pare compay, compay, El Ll Llly, ly,  2001. Te orgazao has ha s sce bul bu l up a commuy of 75,000 problem solers, spread oer 175 coures. Iocee gahers problems from he laboraores of compaes such as Dow, BASF ad Procer & Gamble ad poss hem o he ere. Te soluo soluo ha sasfies he  he crera for success ad bes soles he problem s awarded awarded a moeary prze. pr ze. Oe of he people who hae colleced hs award s Werer Muller, he former head of R&D a Hoechs Celaese. Afer rerg, Muller bul a small laboraory  hs house. He was awarded US$25,000 US $25,000 from Iocee for hs soluo eablg molecules o be produced  a less expese maer.31


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Figure 2.12: Scientists help companies and gain an opportunity oppor tunity to win an award

Research o he ecoomc mpac of Iocee dcaes dc aes ha  s ceraly worhwhle o oae  hs maer. From a esme of US$400,000, US $400,000, come ad sags sa gs hae amoued o more ha US $10 mllo. A smlar commuy wh whch Procer & Gamble has a sraegc allace all ace s he  he oe deeloped deeloped by NeSgma. Here, he soluo proders coss of orgazaos orga zaos raher ha h a persos. Volo, Volo, he Uersy of Calfora, Calfor a, Dow, Dow, Arhur Ar hur D. Lle ad Semes belog belog o hs group. Cles of NeSgma clude Procer & Gamble, Kraf, Dupo ad Uleer.

Figure 2.13: Innovat Innovation ion managers and solution s olution providers meet at NineSigma

Ts ope oao model operaes  a reasoably closed erome e rome. . Requess may be posed aoymously ad, f a oao s deeloped  respose, coracual agreemes abou ellecual propery ca be formed. Ayoe seekg o ap o he kowledge of rerees ca call o YourEcore. Procer & Gamble ad El Llly are he ework’s fouders.

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Oher compaes, such as Boeg, hae also become members. Te busess model of YourEcore s dffere from hose of he aboe wo eworks. Afer a machmakg process, he employees are hred o a emporary bass. ba ss. A bous of 20 perce perce of he rered perso’ perso’s salary sala ry    hs or her fial year a work goes o he ework orgazao. A he sar of he assgme, assgme , employees employees sg a corac ha all al l ellecual prope propery ry belogs o he orgazao for whch hey’re gog o work. Ts arrageme s o as casual as a ope source projec (alhough Lux kerel programmers are, for ha maer, also regularly employed by large I compaes). Howeer,  s ceraly a arace opo for compaes eresed  offerg her ow labs o prode a secod career for he compeo’s op researchers.

2.11 Open innovation in the press Producg a ewspaper collecely has become serous busess sce he Souh Korea OhmyNews was lauched  February 2000. Sll more eresg ha s rapdly growg readershp s he role ha OhmyNews has played  he  he rece rece elecos. Te cory cor y of Presde Presde Roh Moo Hyu s largely arbuable o he effors of hs ope source ewspaper. Te presde hmself was presde wa s he firs o ackowledge hs fac ad, afer af er hs cory, haked he may olueers workg  hs ew medum. Whe a arcle s posed  he ole ewspaper, he wrer recees a modes fee: a 750-word pece ge he headg head g “ “ op News” pays US $11. Edely, a OhmyNews correspode s o prmarly workg for he moey. All arcles are mmedaely publshed, bu he hear of he ewspaper cosss of arcles ar cles from he ewspaper’s ow professoal edors, supplemeed by eed arcles from he commuy. A hs me, OhmyNews umbers aroud 38,000 “correspodes” ad s read daly by a mllo ml lo people. A pred edo edo s publshed weekly. A Eglsh-laguage erso of OhmyNews32 has also al so bee recely recely lauched, l auched, orgally wh hree h ree hudred hudred correspod correspodes es,, a umber ha wll w ll lkely l kely grow o e housad wh w h he  he firs year (2006). (2006). Edos for Japa ad Cha are expeced o follow. Ace parcpao  he ewspaper sead of passe readg s wha dsgushes OhmyNews from he radoal press. I a erew wh CNN,,33 fouder Oh commeed o hs feaure: CNN “Our slogan is ‘every citizen is a reporter.’ We’ve created a new kind of journalism. We call it 21st-century journalism, two-way journalism. So the readers are no longer passive. Tey are very active and participate in what they want to say.” Oh Yeon Ho, 2005


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Figure 2.14: OhmyNews , the newspaper news paper that helped the new president pres ident into offi ce

OhmyNews ears moey, bu ha s o he mos mpora po, accordg o Oh. “I hae h ae o make moey,” moey,” he says, “bu “ bu I am o a exper exper  a ha. Deep  my hear, I am sll a reporer.” 34 I s mpora ha he ewspaper remas rue o s deals. Te majory of s reeue comes from adersemes, ad 20 perce comes from sellg arcles o oher ews ses. Eargs from adersers mus o, Oh says, become oo large.35 Oher come sources wll hae o grow: possbly cludg oluary corbuos from readers o reward a parcular arcle, whch s a cocep ha we saw earler wh Treadless -shr desgs.

2.12 Open innovation in advertising and marketing Adersg ad markeg are wo addoal areas makg creasgly freque use of ope oao. Ts o oly resuls  greaer creay bu also a sroger bod bod wh users ad specfic spec fic arge groups. Below, we wll prode a umber of examples of ope oao  adersg ad markeg. Te ex seco wll prese he case of ope source beer. beer. I wll wl l show ha ope oao, adersg aders g ad markeg are all erlked. Terefore we ca explcly uderake specfic adersg ad markeg aces “ a ope maer.” Bu  he case of ope source beer ad also  a large la rge umber of oher cases, ope oao ecessarly meas akg a dffere approach o markeg ad adersg.

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.

. . . . . . .

Adersg ageces use erms such as “ral markeg,” “buzz markeg,” ad “word-of-mouh adersg” for campags ha do o use radoal meda bu are dreced oward peer-o-peer fluece. Cusomers ad cosumers play a mpora mpora  role  hs h s by, for for example, exa mple, desgg adersemes or by commucag  cusomer eworks ad, as a resul, cocg ohers. James Cherkoff, a cosula for collaborae markeg, has made a sghful examao of wha hs eals. I hs ope source mafeso, he makes egh recommedaos for realzg markeg ad adersg: 36 Ge cusomers drec access o her he r ow “brad “ brad source”  order o coer hem o collaborag producers, jus as Lux programmers hae access o he source code. Spur he fas o ad hae hem o do he majory of he work. Be a brad hos. Lse o wha he commuy has o say. Ope source markeg meas hearg all he rumblgs  he marke mmedaely. mmedaely. Ge real. Auhecy s oe of he mos mpora alues  he raspare world. Accep he fac ha your cusomers are cleerer ha you are. Le go. ur ur owershp of your brad bra d oer o he people. Be ope mded abou hese ew deelopmes. Involving people in commercials

Aud, Nke, Mercedes, Geeral Moors ad may oher orgazaos ole her cusomers  he creao of her commercals. Tey surreder par of he corol oer her corporae commucaos. Co-creao meas oleme. A commercal from Aud  whch cosumers were allowed o ake corol, skech her ow plo ad ee play he role of a characer  he sory araced half a mllo parcpas. asks, phoos ad deos were dsrbued o arous ses, such as www.solea3.com. Te parcpas could subm her ow fidgs, ad may bega webses ad blogs. Te campag was a grea success. I produced more ha 10,000 leads, a eormous crease  ss o he Aud webse ad 3,500 es dres.37 Based o Aud’s measureme crera, hs campag was early 80 perce more effece ha oher campags. 38 Nke also has allowed cosumers o ake par  he creao of commercals. Cusomers were asked o make a hry secod deo clp for he Coerse brad. Ayoe wh a dea ad a camera could parcpae. Te firs see films were posed o he ere, whch araced sll ohers. Sales of Coerse seakers seakers rose 12 perce  hs perod, per od, ad he webse araced 400,000 more sors a moh. MV broadcas he wg commercals. Te filmmakers filmm akers receed US$10,000, US$10,000, a pace compared o


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a “real” commercal bu, a he same me, a subsaal sum for a amaeur. Addoally, here was a grea g rea commoo commoo abou hs campag, ad  produced a lo of “buzz.” “buz z.”

Figure 2.15: Amateur videos for Express Yourself at Converse39

Geeral Moors dd he same. GM asked cosumers o make a commercal, whch produced 2,600 submssos as well as hree mes he usual raffi r affic o her he r webse. web se. I he Neherlads, cosumers suppled he scr p for a ew ader aderseseme for Ceraal Beheer, a surace compay. Uder he moo “W your ow Gouden Loeki,” he Duch Duch eleso ele so prze for commercals, Ceraal Beheer lauched a appeal ad receed egh hudred deas for a commercal. Amserdam resde Fras a Gerwe wo. Te commercal was,  fac, submed for a real Gouden Loeki, bu was o awarded oe of he przes. 40 BzzAgents

More ha wo hudred housad Amercas ad Caadas ca call hemseles BzzAges. Tey parcpae  a ework of olueers who ejoy makg adersg for a specfic brad: a “commuy of commucaors.” BzzAges do ge pad, bu hey also ge perks ad ca ear pos. Somemes parcpas recee producs for esg before hey are roduced o he marke, ad hey may hae drec coac wh he compaes ha make hese producs.

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Fouder Dae Baler has paeed hs BzzAge sysem  order o ge word-of-mouh adersg off he groud. Compaes wag o kow or fluece wha cusomers hk ad say abou her producs ca call o BzzAge. “Buzz ages” are he seleced o he bases ha hey belog o he arge groups ad ca be eagelss for he produc. Ts amous o a furher meamorphoss of user-dre oao ha Erc o Hppel proposes  Democratizing Innovation. Te resul ca be a wordof-mouh campag, bu  ca also sere as a feedback mechasm for cusomer resposes or as he bass of a “ormal” ad campag. Oe of he specal projecs  whch BzzAge was deployed was he promoo of Creae Commos, Commos, a ope source lcese for exs, e xs, books book s ad musc. Howeer, BzzAge also works for ordary producs, such as beer, books ad corflakes. Orgazaos lke Pegu Books, Aheuser Busch, DuPo, Su Mcrosysems, Neslé ad IBM hae used he “buzz serces” ad prase her qualy.

Figure 2.16: Whoever wants to approach a community community can call on BzzAgent

Jones Soda

Joes Soda, a sof-drk Joes sof-dr k producer wh US$27 US $27 mllo ml lo  sales, has cusomers desg he appearace of he boles. A yoe ca sed  phoos, ad, o he bass of a oe held o he se, a weekly wer s chose. You mgh see your ow acao sapsho o your faore drk dr k or fid  o supermarke superma rke sheles hroughou hroughou he coury. May phoos hae bee used, so s o  s dffi d fficu cul l o sed eery eer y wer w er hs or her ow bole. bo le. I s easer, especally especal ly for Joes, Joes, o hae you order wele of your boles o w ww.myjoes ww.myjoes.com .com for US$48.95, US$48.95, cludg shppg. A pa o he back for your oluary effors s o o be expeced from Joes, ad ee sedg you a free bole s oo much rouble. Neerheless, hs does o hamper eher cosumers’ creay or produc sales.

2.13 Open source beer from Brewtopia Tere are arous aes  aes focusg o ope source beer, bu bu Brewopa s ceraly oe of he mos eresg. Obously, ayoe ca release a recpe for beer so ha eeryoe could make he same beer. Beer recpes


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are ohg specal. Oly a few gredes are oled: waer, hops ad mal. Howeer, Brewopa has doe more o capalze o he cocep of ope source. Tey hae uleashed he dea o he whole orgazao. No oly s he  he beer ope source, he ere maageme from he groud up s based o a umber of ope source prcples. Where he dea came from s a maer of cojecure, alhough Lam Mulhall, fouder ad CEO of Brewopa, worked for years a Red Ha, a successful ope source sofware compay. He, alog wh a umber of freds, came up wh he dea of sarg a brewery, bu oe ha would always prese all decsos o a “commuy.”” Wha y. Wh a orgally orgal ly bega as a group of freds ad acquaaces grew o a global commuy of aroud hry housad beer loers ad coosseurs. Wh he ere as s mos mpora ool, a process was aed  whch he commuy made, oe afer aoher, all he ecessary decsos. Te ace members were rewarded for her oleme wh cerficaes ha would ele hem o shares f he compay eer appled for sock marke regsrao. reg srao. Te commuy played a prome role  fiacg fiac g he compay, compay, deelopg he produc ad markeg marke g he brad. Afer a perod of deelopme, he compay acually bega o brew ad sell beer for he Ausrala marke. I keepg wh he oo of ope source, a share cerficae s ge away wh eery case of beer sold. Brewopa beer s a absoluely commoplace, upreeous upreeous beer: Just beer to get drunk on No crap, no fancy crap about “imported hops,” “first crop barley,” or sweaty blokes hard at it in the coalmines. It’s beer. You get drunk, fall over, start a fight, and mozy on out of town. Brewtopia

Te parade of Brewopa’s Brewopa’s oaos has coue coued d followg follow g s marke ma rke lauch. For example, hey make  possble for a cusomer o produce a case of beer accordg o persoal specficaos ad cludg a cusomzed label. I he sprg of 2006, he Brewopa Compay dd,  fac, become lsed o he Ausrala sock exchage, whereupo he members of he commuy (ad he beer drkers) became he shareholders. Te cosumers became he owers, ow ers, ad  fac he producers, jus as we hae h ae see  our oher examples. Brewopa does o boher s cusomers wh expese adersemes ad sales pches. Te mos mpora hg s ha he cosumer becomes oled wh he brad ad he (or she) o oly ells ohers how good he beer s bu also how ce  s o be a par of he commuy.

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Brewopa spres cofidece by mmedaely offerg a refud o ayoe who s o sasfied. Te oly codo s ha he dssasfied cusomer mus expla why he beer was foud wag. Of course, feedback of more pose cusomer expereces s also alued.

Figure 2.17: Grab your chance while you can and become a brewery owner

o furher fur her crease brad rus, Brewopa’ Brewop a’s prcg sraegy sr aegy s also al so ope. Te more beer ha s sold, he more cheaply  ca be produced. Ad he cheaper he produco coss, he lower he real prce. Te Brewopa se dcaes ha a case of beer orgally cos Aus$49.99. Te  we o 47.99, sll laer o 44.98, 42.88 ad,  Augus 2006, he proposed prce was as low as Aus$36.98. Te calculaos are made based o a defied profi marg: 28 perce. For skepcs who hk ha Brewopa s ohg more ha a cleer adersg su, he compay has ssued he followg saeme: “Brewopa. “Brewop a. Te oly beer compay Bul Bu l by he People for he People.” People.” Te fouders acually eeded he esme esme of cosumers o se up he compay ad hey are compleely coced ha he ope source model of operag a compay s he bes here  here s. Tey are proud ha he compa compayy s ow beg used as a case sudy by Mcrosof, Fast Company, ad he Financial Review. “We accidentally stumbled on what we believe is the best way to run a business – give the customers the reins. It’s worked well enough so far that we’ve even been case studied by Microsoft, Fast Company & Financial Review! ” (More on Brewtopia in the Foreword on page 9-11.)


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2.14 Open innovation at Boeing Te Ope Source Space Space Program of Charles Gerlach, whch whc h we dscussed earler, s o ye a realy. I he meame, Boeg has bee corporag ousde kowledge kowledge o he buldg of ew arcraf. a rcraf. Boeg made a appeal for help o co-desg he ew Boeg 787 ad suppored he reques o s webse. Ayoe could jo he World Desg eam ( WD WD)) for he ew arplae. ar plae. I oal, here  here are 120,000 120,000 regsered members. members. I a erew from 2005, Klaus Brauer he projec drecor saes ha members of he WD are mosly cocered wh comfor: How s he humdy? Is here wreless ere oboard? Are he washrooms spacous eough? Wha are he blds    he wdows w dows lke? Howeer, Howeer, we also read ha  oher dscussos wh w h Jeff Hawk, he Drecor of Cerficao a Boeg, former Boeg egeers are oled  he dscusso ad pose crcal quesos – abou he hydraulc sysem, for example. Te WD ae s eresg because  uses he expereces of a large group of professoal amaeurs – or “Pro-Ams” for shor. A he same me, a perso jog he WD ad sg he se for he firs me mgh coclude ha srog markeg eress uderle . Tere s a grea deal of adersg for he ew plae, here  here are arace screesaers, bu bu here s lle opporuy for eraco. For For ha maer,  s also uclear u clear f mos of he work s already doe ad he commuy commuy s ow merely merely beg haked h aked for s serces. Ee he ame ge g e he ew arcraf, he 787 Dreamler, s a WD eo wh clear markeg oeroes.

2.15 Open innovation in building new computers I addo o he creay of he sofware deelopers  he Mcrosof commuy, Mcrosof calls o he resources of Geerao C  aoher maer. See Kae Kaeko, ko, Desg Drecor of Mcrosof Wdows Hardware Ioao, fired he sarg psol for a ambous projec o brg  oher exeral creay. Ayoe wh a dea ca parcpae  desgg he PC of he fuure by sedg descrpos, phoos ad deos o Mcrosof, ad hereby become become elgble o w US$125,000 US $125,000  prze moey. Kaeko ecourages parcpas aboe all o be frak ad o hk freely, bu also o keep a eye o applcably. Ispred by Te Experience Economy by Joseph Pe ad James Glmore, Mcrosof has cluded a whe paper abou abou compug compug experece e xperece  he  he sarer k k  for he compe41 o. I Noember 2006, he publc chose a wer. Te people’s choce receed US$25,000, US$25,000, whle he jury’s preferece ad he persoal choce of Bll Gaes were each ge US$50,000 US $50,000.. I he  he caegores of “Persoal Producy,” “Eerame,” “Commucao & Mobly,” ad “Lg

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Open for Business

ad Lfesyle,” he creae geerao geerao ca dulge self by prodg pro dg Mcrosof wh a helpg had o geerae eresg ew produc deas. Open source hardware

Ioao of a erely dffere order s behd he aouceme by Joaha Schwarz, he COO of Su Mcrosysems, ha he desg of he UlraSPARC UlraSPARC processor has bee ured oer o ope source. A he Jauary 2006 Ope Source Busess Coferece  Sa Fracsco, Schwarz sad ha process desg would be performed uder a GPL lcese. Ts s he same ope source lcese uder whch Lux became aalable. “Open source is not just about software. Freedom is not just about software. It’s going to come to hardware, and we’ we’re re going to drive that.” Jonathan Schwartz, COO Sun Microsystems

Wh hs moe, Su was o ecourage he ope source commuy o mproe he sofware ad o wre beer applcaos for he processor. Howeer, accordg o IDC, IDC , hs h s moe also makes  possble for pares  Ida ad Cha o acqure kowledge o prae he echology ad o cloe he processor processor..42

Figure 2.18: Sun open sources its UltraSPARC UltraSPARC processor


81

CrowdSpirit dSpirit 2.16 Open innovation à la Crow

Loel Dad worked for a compay compay ha eared ear ed bllos bll os from cosumer-produc sales. Hs compay had dscoered ha he employee was a aluable source of oao. Almos eery day here was aoher ew “call” for ew deas. Bu he speed wh whch deas were mplemeed was frusrag o hm. Te orgazao was bureaucrac ad uweldy, ad Loel was eer ge a chace. So he lef. Nohg ew so far, as erepreeural spr has perssed for ceures  places where  was o urured. urured. Bu wha makes hs h s coemporary coemporary ale dffere d ffere s ha h a he rules of he game hae chaged. I has become smpler o challege bllo-dollar compaes wh ew oae producs. Loel se up “CrowdSp “CrowdSpr,” r,”43 whch he labels he firs compay ha crowdsources elecroc producs. Te compay has a uque formula: Parers for Produco. I cosss of a ework of dsrbuors who collaborae wh he ere crowd o make ew producs.

CrowdSpirit: Te community community is the sweet spot

Te aure of ay parcular parc ular oao does o really maer, so log as  s a cosumer produc. Te produc herefore deermes he crowd, whch s a exreme form of crowdsourcg. We see somehg smlar a Cambra House. 44 Te people here alk abou “crowdsourced “crowdsourced sofware.” sof ware.” Te compay compay does o eed ay dsr dsrbubuo chaels or ay real parers oher ha he ere crowd self.

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Open for Business

You come up wh he produc; he crowds es ad buld ; Cambra House sells , ad you share  he profis. Te seps from eo o cashg- are preseed o he Cambra House se:

Crowdsourcing Crowdsourc ing from ideas to production at Cambrian House

Te “Chumby”45 s a cocree example of a cosumer produc ha could ole aces smlar o hose of CrowdSpr ad Cambra House. Wha s a Chumby? Praccally speakg,  s a clock rado wh a wreless coeco o he ere. All sors of hgs ca be bul from  or added o . I s somehg ha was made for hackg hack g ad from whch somehg dffere ad more arace ca also be made.

Howeer, he Chumby s also a symbol of all he opporues ha ope oao ad crowdsourcg hae o offer. Te ere makes  possble o exchage deas ad maufacure ew producs. producs. A half-baked hal f-baked objec such as he Chumby ca be posed o he ere ad people are ge he chace o ker wh . New deas are geeraed ad roduced  eworks, lke CrowdSpr. May roads lead o Rome. Oe hg has becom becomee perfecly clear: he  he corporae esablshme, esablshme, he mulaoals, are makg eery effor o parcpae par cpae  ope oao à la CrowdSpr. CrowdSpr.


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2.17 Open innovation at Wikipedia Te ope source Wkpeda ecyclopeda s oe of he larges olueer eworks  he world. Tere are more ha 350,000 regsered “Wkpedas: people who hae regsered wh Wkpeda  order o corbue formao. I May 2005, he hard core amoued o aroud 57,000 dduals who had made a corbuo e or more mes. 46 Oe year earler, hs figure fig ure was uder 20,000. 20,000. I olume, olume, Wkpeda Wk peda has log sce surpassed he Ecyclopeda Ecyclopeda Braca. Halfway Ha lfway hrough 2005, Wkpeda coaed four mes as may words as s commercal couerpar. I has ake oly four years years o reach hs mark, ad Wkpeda Wk peda s sll doub doublg lg  sze eery year.

Figure 2.19: Wikipedia is compiled by a community of 350,000 volunteers

Wkpeda oly has oe employee o keep he serers  operao. Icome comes from doaos, ad he formao s sored a he Yahoo mache park. Te Wkpeda model s he oe ha mos resembles pure ope source sofware pracce as poeered by Apache ad Lux. Tere s o profi moe. Bu ca a ecyclopeda wre by olueers whsad he es of crcal apprasal? Is  o oerloaded wh medocre corbuos ad worse? worse? Of course, ha s a rsk, r sk, bu he qualy qua ly corol has bee que successful. Research has show ha  ha correc formao s remoed wh wh  a aerage of 17 17 mues by oe of he 500 admsraadms ra-

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ors. Howeer, Howeer, hese rapd acos cao guaraee gua raee ha he formao  formao o he res of he pages s  s accurae. Jus as wh ope source sofware deelopme, peer reew s he way o es ha he formao s relable. Jokes are made abou he qualy of Wkpeda by, for example, comparg  o a publc ole: you eer kow who was he las oe sg here. Such commeary s already cluded  Wkpeda self uder he headg “Why Wkpeda s o so grea,”47 alog wh a respose o he commeary. Te crcsm rages from laguage use, whch s a mshmash of all sors of Eglsh (Amerca, (A merca, Ausrala, Brsh, ad raslaed Eglsh) o he maer  whch mproemes proeme s are made. Wikipedia is about as good as a classic encyclopedia

Wkpeda has bee proe o be of good qualy. I December 2005, research publshed  Nature esablshed ha he qualy of Wkpeda roughly mached ha of he Ecyclopeda Braca. Te examao focused o he accuracy of he scefic arcles  boh ecyclopedas. Te aerage Wkpeda arcle coaed four errors. Te Ecyclopeda Braca had a aerage of hree. Ee more mpora was he obserao ha boh ecyclopedas are plagued plag ued by a equal amou of serous errors. I he ere research, four serous errors were foud  boh he Wkpeda ad he Ecyclopeda Braca. Wkpeda suffered slghly more frequely frequely from f rom mor errors. 48 Wikinews A new project was begun in 2004 called Wikinews , which reported the news in the same manner as OhmyNews . After Af ter an offi o fficial vote vo te that took to ok place between 22 October 2004 and 12 November 2004, wikinews.org was launched. Te winning Wikinews logo was developed by “Neitran,” a German Wikipedian. Tere is a Wikinews manifesto and copyright rules. Erik Moeller, the initiator of Wikinews , sees Wikinews primarily as a more independent medium. In contrast to OhmyNews , it has no advertising revenue.

2.18 Conclusions Ts chaper has preseed may dffere examples collecely demosrag ha  ha a ew mode of produco produco s emergg, oe olg recepy o exeral flueces ad,  parcular, he use of experse ad sghs from f rom ed users/cosumers users/cosumers  he oao  oao process. We bega hs chaper wrg “oao”  boh capal ad small leers. Ioao wr large was defied as “dsrupe. “dsr upe.”” Alhough ope source lessos do o hae o be dsrupe dsr upe per se,  s ceraly cera ly eresg


85

o look a he examples  hs way  order o see f here’s really ayhg sgfica gog o. We hae compled compled a ls l s coag a small sma ll cross-secc ross-seco of all he examples ex amples wh a dcao of her effecs. A hs po we would hae o coclude ha oly a lmed poro of he examples are  he aure au re of he dsrupe oaos  oaos descrbed descrbed by Chrsese. Bu hs s’ so mpora. I s much more mpora o recogze races of ope source  umerous secors ad o udersad he grea promse behd hese wdespread successes. Ts deelopme wlll probably wl probably sowball as programmg,    boh a src sr c ad a wder sese, s becomg accessble o creasg umbers of people. Te creasg famlary famlar y wh ad a d growg ease of dgal oleme oleme wll w ll eable ew domas o deelop more more quckly. As boh srumeal ad prmary prma ry cosequeces of hs oleme oleme, , he  he olume ad mpac of ope source o busess oao oao  oher ecoomc ecoomc secors wll w ll grow grow.. Te key flueces wll ole ope source culure ad ope oao. Surfkites Surf kites

A new market player is able to introduce a better and cheaper kite without investing in R&D. Wikipedia An encyclopedia compiled by volunteers can compete with the best encyclopedias in the world. OhmyNews A newspaper made by volunteers helps the new president get electe ele cted d to office. Lead users 3M records an increase in sales of us us$146 $146 million due to a better lead-user focus. Converse sneakers Converse has consumers make their own advertising and registers a growth in sales of 12 percent. Audi Audi involves customers in the production of commercials and increases the effectiveness of its campaign by 80 percent. Amazon 10 million visits are made daily to the Amazon site as a result of webservices on other sites. Treadless 1,500 free -shirt designs every week. Lego Just under 6,000 products have been designed by the Lego community and are being sold by Lego. oyota Production was restored within two days of adopting an approach similar to open source. Innocentive Innocenti ve A 250250-percent percent yield from participation in an innovat innovation ion network. Chicagocrime New information that was not previously available in this way. CrowdSpirit CrowdSpi rit CrowdSpirit will enable you to decide which electronic products you would like to find in your favorite electronic retailer. Cambrian House Te self-proclaimed “Home of Crowdsourcing”. Chumby Chumby displays useful and entertaining information from the web: news, photos, music, celebrity gossip, weather, box scores, blogs – using your wireless Internet connection.

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How do these innovations occur?

A secod obserao abou he dsrupe characer of hese examples cocers he degree o whch hese dsrupos occur  he maer ha Chrsese predcs. predcs. Specfically, Chrsese suggess ha he orgal rudmearyy fucoaly rudmear fuc oaly of a ope source produco produco process prodes prodes ferle fer le groud for wha, wha,  effec, he become dsrupe oaos.  oaos. I he case of such producs as Wkpeda Wkped a or OhmyNews, we ca ceraly see ha here s somehg o hs ew. Ially, Ia lly, exsg exs g marke players dd o lose ay sleep oer hese margal producs. Oly whe her qualy bega o mproe dd  become clear ha hs ew mode of produco could be sgfica. Howeer, Coerse, Aud, Treadless ad Amazo were all fully oled  ope oao  a commercal way rgh from he sar. Te surfke would o hae ake oer he marke had s performace o bee superor o he marke leader’s;  ha example, he produc fucoaly was demosrably beer from he begg. Ad mash-ups such as Chcagocrme.com Chc agocrme.com mus also sasfy sasf y cocers abou meager meager produc qualy precsely hrough he creay of makg somehg ew from he combao of exsg hgs. Inspiration from open source

Ts brgs us o oe fial refleco before we dsgush a umber of edeces llusraed by he examples. Wha s he ulmae cause of he success? Is  he specal lceses? Te users who are drg ? Iere ad he rual workses? Self-deermao ad rsc moao? Te erseco bewee ope ad closed? Or cleer maageme ma ageme due due o rasparecy ad a merocrac orgazao? We bega hs book wh hese elemeary characerscs of ope source. A defie aswer o he queso cao be ge. I s also o so surprsg ha Brewopa, he ope source beer brad, s so ofe ced as a case sudy. Tey hae pulled ou all he sops ad decded, “We wll do eery hg    a maer ha s as ope(-source) as possble ad we wll see wha happes.” Now, hs would’ would’ seem o be he mos reasoable adce for oher compaes. Howeer,  makes he clear po ha alhough ope source has poeal, we sll do o kow how  s gog o deelop. Tere s oe hg ha we are able o say wh ceray: he ease wh whch people ca parcpae  oao wll oly crease. As we saw  he case ca se of he ope source shoes from Joh Joh Flueog, he udersde u dersde of a beer ma s eough. eough. Parcpao ca be  ordary ordar y laguage, as we saw  he case of Wkpeda. Ad he oher, more complcaed laguages all hae he feaure ha hey are becomg much smpler: see-year-olds desg ew Lego oys usg CAD sofware.


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C o a N o r r

ma m l l

Number of people speaking the language

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l a n n

g u a g e

W e b bs s i i t t e e s W e b b

s e s er r v v

C AD / C C AM

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a n nd t o o o

l s

C o o d d e e

Simplicity

Figure 2.20: Everyone can make a sketch, send in an idea or participate in some other manner; with open innovation, this involvement is becoming increasingly easier

Te laguages wh whch ope oao ca be realzed are show o he horzoal axs  Fgure 2.20. Te smplcy of he laguage of commucao creases as we moe rgh. Te smpler he laguage, he greaer he umber of people who ca speak , whch s dcaed o he ercal axs. Te arrows  he gray area dcae ha  s becomg creasgly easy o be creae by meas of sofware ad he ere. Ope oao ges off he groud because more ad more people are dgally compee; he ere, webserces ad sofware eable hem o collaborae amog hemseles or wh compaes. Publcly Publc ly accessble source source codes, ope source, ca oly be fully realzed real zed  a sofware erome. I “physcal” (a leas, o-dgal) eromes, we ofe oly deal wh elaborae specficaos or perhaps oly wh rudmeary r udmeary deas. Te more ha compaes pursue oao, ad hs wll happe as more successes become ede, he more moao here wll be for compaes o release source codes ad ools  order o make hem  hem aalable o a a  oae commuy. Te egageme egageme of exper users  oao, as occurs  he sofware erome, wll crease as a resul, because he opporues o parcpae are also gog o crease. Furhermore, he saeme of Erc o Hppel wll proe rue: oao s democrazg. Of course, here s a queso of how all hs wll relae o he commercal eress of compaes ad suos. Wh he excepo of a small umber of o-commercal ope-oao aes, mos examples hae a commercal sla. Afer readg he hree followg chapers,  wll be clear ha he commercal eres ere s of compaes s a mpora pllar pll ar supporg he rapd deelopme of ope source. source. Wha Wh a sofware deelopers hk h k abou he commercal exploao of her effors wll be explored  Chaper 4.

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Open for Business

o coclude, we wll ed hs chaper wh sx geeral edeces ha ca be dered from he examples dscussed aboe. 1 Community products in natural languages

Te firs edecy edecy oles producs ha are made or wre  ordary orda ry laguage. lag uage. Sce o complcaed complcaed programmg kowledge k owledge eeds eeds o be employed,  s possble for he geeral publc o parc par cpae. pae. o o a grea exe, such producs rely o hs commuy olem oleme. e. I oher words, f he commuy were o loger o exs, lle of he ed produc would sure (hs s less he case  oher ope busess pracces). Wkpeda ad OhmyNews are good examples. Jus as  he case ca se of ope source sofware, such producs are lauched  mao of somehg somehg ha h a already exss: a ecyclopeda ad a ewspaper. ewspaper. Alhough A lhough al a l cocers abou “crum“crummy” qualy/fucoaly may hae bee ald,  s mpora o oe ha OhmyNews ow belogs o he op fie ewspapers  Korea, ad Wkpeda s o loger feror o professoal ecyclopedas. Te commuy s ful fully ly self-supporg: oe compuer compuer wh a ere coeco s suffice. Te ulmae ul mae goal s o collec collecely ely produce a good produc. 2 Open innovation innovation in advertising and marketing marketing strengthens the bond with the customer

Alhough he focus of ope oao falls o eralzg he kowledge ha exss ousde he orgazao, somehg else s oled  adersg ad markeg. Besdes good deas, ope oao  hese domas s prmarly cocered wh sregheg he bod wh he arge group. Obously, ay compay ca ole cusomers  he produco of adersg: examples e xamples clude Nke, Mercedes ad Aud. Aud. Tese compaes ecourage cusomer oleme,  oleme, ad o jus for reasos cocerg ay alleged shorage of creay  adersg ageces or he hgh raes charged cha rged by such ageces. Ideficao Ideficao wh w h he brad ad he  he resulg bod wh he cusomer c usomer are boh ehaced by such acy. ac y. Te ddg le bewee markeg ad ope oao s exremely h, as show  a umber of examples. Ope oao cocers cocers markeg marke g  he cases c ases of Treadless, Brewopa, Brewopa , Joes Soda, ad Yahoo. Yahoo. Te geeral maager of Yahoo lerally adms ha her oao approach s esseal for her R&D ad markeg. Lego defies cusomer recommedaos o ohers as oe of he four mpora gas from ope oao. Tere s cosequely a sp-off for adersg ad markeg resulg from f rom he oleme of ousders ousders  a compay’s orgazao ad as a upsho of allowg hem o parcpae  he oao process. We hae remarked o hs before,  relao o acag he userdre oao ha Vo Hppel preaches  hs rece book Democratizing Innovation.


89

3 From digital design to physical product

If he fial produc s fully dgal, dg al, as  he case of sofware or Wkpeda, a commuy ca se o work o dgally modfyg may depede aspecs. aspec s. No oe eeds o hae h ae suffice resources resou rces o pay for maches mac hes or maeral o make he physcal produc. Ope source blueprs for oao olg physcal ed producs herefore fuco  a sgficaly dffere maer. Bu he more ha hgs are auomaed ad he more ha dgal work ca be separaed from physcal acy, he more hs dgal/physcal dsco s blurred. Te edecy  hs regard has bee clearly demarcaed, ad he ools ha suppor he dgal work are becomg progressely beer ad less expese. We saw hs  he surfke example. Praccal ad expese sofware made  possble o beg workg  a ope source maer. A process of ral ad error could o, howeer, howeer, be aoded  he produco of he ke. Maeral Maera l was ceraly requred for cosruco ad esg, bu he esmes remaed maageable. Budges ca be furher reduced as he predce qualy of he dgal desg creases. Smulao ad esg sofware (ad he egrao of he wo) makes hs possble, ad aga he qualy of hese  hese s beg progressely mproed. mproed. Ts leads drecly d recly o mor moree ope oao ad o more ope source oao. I oher fields, such suc h as bo-compug, a grea deal of progress has already bee made. Lego, whch has ha s bul up a srog lead  hs h s regard, saes opely, “We are o o a excepoal compay; ay orgazao ca do somehg smlar.” Wha s characersc ad esseal  hese examples s he fac ha he sofware used  programmg does o hae o be ope source. Te focus s o he ed resul, produc or medce ha  ha s produced  a commuy o be erused o he publc doma. 4 Webservices blur the boundaries between communities and organizations

Google, Amazo ad Yahoo prode deelopers wh he opporuy o easly dese ad offer ew serces wh he help of webserces. Te deelopers may be called cal led “assocaes”  some cases, bu hey are  fac oe ad he same hg. Compaes lke Google ope hemseles up o ayoe who wshes o do somehg somehg wh w h oe of her serces, because hey kow ha her  her ow geu geuy y s lmed. l med. Cosequely Cosequely,, hey recee webserwebserces ad deas from he commuy. A he same me,  me, he eergec eergec webserce sraegy meas ha hese orgazaos hae o kow how such a commuy works ad how hey ca ap o . Whe e mllo sors call a Amazo eery day as a resul of accessg her webses hrough oher ses,  becomes clear ha he boudares dsgushg he orgazaos oled are o draw ery sharply. Such erlkg or “erwebbg” s oceably o he crease. Google, Amazo ad Yahoo are he leaders, bu he deelopme of webserces, he assocaed erwebbg ad he emergece of serce-oreed serce-or eed archecures appear o be jus begg.

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5 Laboratories, people and companies link up

akg he ae from large compaes, oao eworks hae bee creaed  whch dduals ad oher compaes parcpae. Such orgazaos as Iocee, YourEcore ad NeSgma are mg ousde kowledge  respose o he realzao ha o all smar people work for a sgle compay. I s eresg o see ha small laboraores  people’s people’s homes ca hae a effec o he  he oaos adoped by large compaes. Usg sofware smulao for expermes may well be he fuure; bu for he me beg, we labs are sll able o compee. Tere s also a cera degree of self-deermao ede  he ope source commuy. Te “seekers” of specfic ypes of kowledge make hemseles kow, ad a d he “solers” choose he problem ha hey he y would lke l ke o sole. Howeer, he ellecual propery of he fidgs s,  geeral, quckly feced . We saw ha  he case of Boeg. Is ow commuy, he World Wo rld Desg eam, was prmar prma rly ly se up o fid cleer c leer deas for he compay self, ee f pars of he dscussos were made publc ad accessble o eeryoe. 6 Internalization of open source culture

As a alerae o profiably ulzg ousde kowledge ad experse, here are also ope source blueprs ha ca be successfully appled sde a orgazao. I a me of crss, oyoa resored o a mode of produco resemblg ope source. Ts compay’s assembly assembly les l es corporae srog elemes of he self-deermao ha s characersc of ope source produco. Ulmaely, oyoa adops such pracces  order o deal more effecely wh problems ad, a he same me, o reduce expedures o cosulao ad he formulao of op-dow plas. Smlarly Smla rly,,  s eresg o oe ha somehg somehg s also a lso happeg sde Lego as a resul of cusomers becomg oled  he desg process. Collaborao has become a more regular feaure of he busess culure a Lego. I Chaper 5, we wll see ha sofware producers are also seekg seek g salao  a ope source culure, as hey expec far more from such pracces ha hey mgh achee wh a purely herarchcal herarch cal mode of proproduco. Te fial cocluso o hs chaper ch aper cao, of course, course, be ayhg ayh g oher ha he obserao ha ope oao sads or falls wh he commuy commu y ha cogregaes aroud a produc, serce, ser ce, process, process, orgazaorgaz ao, brad or marke. Notes to Chapter 2

. Schumpeer, J., Te Teory of Economic Developmen, Harard Uersy

Press, Cambrdge Massachuses, 1934. OSBC, 2004, www.coersaos. . Chrsese, C., Capturing the Upside, OSBC, com/rascrps/135/rascrp-pr135-1.hml.


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. O’Relly, ., en Myths about Open Source, 1999, opesource.orelly.com/

ewms/myhs_1199.hml. . Weber, S., Te Success of Open Source, Harard Uersy Press, 2004. . www.eweek.com/arcle/os1895,1896588,00.asp. Prahalad, lad, C.K. C.K . & V. V. Ramaswamy, Ramas wamy, Te Future of Competition, Harard Bus. Praha ess School Press, 2004. Prahalad, lad, C.K. C .K. & V. V. Ramaswa R amaswamy my,, “How o Pu P u Your Your Cusomers o o Work,” Work,” . Praha CIO, Jue 8, 2004, www.co.com.au/dex.php/d;1736056082;fp;512;fpd ;184745984. . Mulga, G., . Seberg & O. Salem, Wide Open; Open Source Methods and Teir Future Potential, Demos, 2005. IBM,, “Te Nex Bg Tg T g No Loger Exss,” CNE , 15 March 2006, ews. . IBM com.com/bm+he+ex+bg+hg+o+loger+exss/2100-1008_36050056.hml. E . Vo, Vo, Democratizing Innovation, MI Press, 2005. . Hppel, E. . www.scb.org/oero.shml. . See www.facory-smulao.com. . Magusso, P.S., “Te Vrual es Lab,” IEEE Computer, May 2005, Vol. 38, 5; p. 95-97. . www.admag.com/pr.asp?d=12020. . Gerlach, C.D., Building an Open Source Space Program, 2005, sdc2005. xsp.e/~kmller/sdc_arche/fileD xsp.e/ ~kmller/sdc_arche/fileDowload.ph owload.php/?lk= p/?lk=fileSelec&file_ fileSelec&file_ d=139. . www.flueog.com/files_2/os-1.hml. . Florda, R., Te Rise of the Creative Class, and How It’s ransforming Work, Leisure, Commuy ad Eeryday Lfe, Bass Books, 2002. . Lehar, A., J. Horrga & D. Fallows, “Coe Creao Ole,” Pew Internet & American Life, February 29, 2004, www.pewere.org/pdfs/ pp_Coe_Creao_Repor.pdf. . Nuall, C., “Way of he Web: Sar-Ups Map he Roue as Bg Rals Ge Mcrosof  Ter Sghs,” Financial imes, Noember 17, 2005, p. 15. . Ges, F., I DC Predictions 2006: It’s Gut-Check ime, As Disruptive Business Models Gain raction, December 2005, www.luxelecros.com/arcle. php/20051201222935677. . mcmaus.ypepad.com/grd/2004/07/wre_opesourc.hml. . Sgel R., “Map Hacks o Crack,” Wired , July 2, 2005, www.wred.com/ ews/echology/0,1282,68071,00.hml. . “Mx, Mach, ad Muae,” BusinessWeek, July 25, 2005, www.busessweek.com/magaze/coe/05_30/b3944108_mz063.hm. . www..com/blog/arcle/greasemokey-ad-busess-models. . “Va webwkel o sofwareplaform,” Computable, Aprl 22, 2005. . See Nasa clckworkers a clckworkers.arc.asa.go/craer-markg. . “Te Worlds Mos Ioae Compaes,” BusinessWeek, Aprl 24, 2006, www.busessweek.com/magaze/coe/06_17/b3981401.hm. Also

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see “Udersadg oyoa’s Ioao Facory”, www.busessoaosder.com/2006/10/udersadg_oyoas_oa.php. . Eas, P. P. & B. Wolf, “Collaborao Rules,” Ru les,” Harvard Business Review, July/ Augus 2005. . Chesbrough, H.W., Open Innovation: Te New Imperative for Creating and Profiting from f rom echnology echnology, Harard Busess School Press, 2003. . Klee, K., “Grad Opeg: Procer & Gamble Oce Kep R&D Close o he Ves. Now Oulcesg s Drg Growh,” IP Law & Business, Februar Februaryy 2005. . Te Wall Street ranscript, 2005, www.ocee.com/abou/meda/200504_wsj_Ierew.pdf. . eglsh.ohmyews.com. CNN,, Korean Bloggers Making a Difference, March 31, 2005, www.c. . CNN com/2005/ech/03/31/spark.ohmyews. . Schroeder, C., “Is Ts he Fuure of Jouralsm?,” Newsweek, Jue 18, 2004. R aese, “I Souh Korea, Eery Cze Cz e Is a Reporer,” Reporer,” Helsin. Juha-Pekka Raese, gin Sanomat, Jauary 8, 2005. . Cherkoff, J. What is Open Source Marketing?, www.chagehs.com/14. OpeSourceMkg. . Hof, R.D., “Adersg Of, By, ad For he People,” BusinessWeek, July 25, 2005. Kley, ley, D., D., “Aud “Aud’’s Ar Ar  of Te Hes Capured C apured Leads,” iMediaconnection, July . K 26, 2005, medacoeco.com/co medacoeco.com/coe/6 e/6386.asp. 386.asp. . www.coersegallery.com. . Te commercal ca be ewed a www.ceraalbeheer.l/cb/cb/corporae/fu/commercals.jsp. . Allch, J. & N. Kao, Experience Computing , Mcrosof, Aprl 22, 2005. www ww w.sarsomehgpc.com/E .sarsomehgpc.com/EryK ryKFles/Expere Fles/Experece20Co ce20Compu mpug g 20Oerew20Whepaper.pdf. . Shaklad, S., “Su Releases SPARC Specs  Lux Loe Bd,” CN et et, February rua ry 15, 2006, ews.zde.co.uk/hardware/chps/ ews.zde.co.uk/ hardware/chps/0,39020354,39252513,0 0,39020354,39252513,0 0.hm. . www.crowdspr.org . www.cambrahouse.com . www.chumby.com e.wk wkpeda.o peda.org/wk rg/wksas/ sas/e/ e/CharsWkpedazz.hm. CharsWkpedazz.hm. . e. . e.wkpeda.org/wk/Why_Wkpeda_s_o_so_grea. . Gles, J., “Iere ecyclopaedas go head o head,” Nature 438, 900901, December 2005, www.aure.com/aure/joural/438/7070/full/ 438900a.hml.


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3

Te software sof tware market has taken the lead

Tis chapter will examine the effects of open source on the software market. Not surprisingly,, it is a market in which many players surprisingly players engage, to a certain extent, in open innovation. In this case, open innovation is open source innovation. Even a company reputed to be completely closed, such as Microsoft, has taken many more steps toward open innovation than have many companies outside the software sector. We will describe a number of organizations that use open source software to generate new business, along with a selection of traditional software sof tware companies. companies. Te two together have rapidly transformed the market with their open-source-based business models. Measured in terms of the impact of open source, s ource, the software market is demonstrably ahead of the pack in this regard. In no other sector is market innovation innovation performed so extensively extensively.. Te discussion of open-source-inspired open-source-inspired innovation in this chapter will be concluded with a series of reflections on open innovation outside the software sector.

Progressively more open source business

Nowadays, o a sgle compay  he sofware Nowadays, sof ware dusry ca c a gore ope source. Ts s ceraly relaed o he growh  he umber of applcaos ha hae come o he publc doma. Tey ca all be used for busess purposes by ayo a yoee wshg wsh g o do so. O he  he demad sde, here are creasg umbers of orgazaos ha h a wa o acqure ope source sofware. Producers are all adopg ope source; cosequely, all sofware compaes hae “ope” sraeges. Ts s oe dfferece from wha we descrbed  he firs chaper chaper.. Mos compaes ousde ousde he sofware dusry do o hae such a sraegy, or a leas o ye. We wll beg hs  hs chaper by lsg he see dsce dsc e ypes of ope source sraeges mplemeed mplemeed by sofware sof ware producers, ragg from opmzao o embeddg. Ofe hey occur  combao.

95

Open source strategy

Description of the supplie supplierr

Optimization

Lower costs while maintaining reliability and adding robust open source software: for example, SAP or Linux. Open source in a free version and a professional edition: for example, SugarCRM Sugar CRM and MySQL. MySQL. Advice about which open source soft software ware is the most suitable: for example, based on the Open Source Maturity Model from Navica. Open source community aid: for example, a great many of the Linux kernel developers are employed by IBM . Companies deliver a package of open source products and associated services: for example, Red Hat and Covalent. Internet companies operate on open source sof software: tware: for example, Amazon and Google. Open source soft software ware is used in devices: for example, Linux smartphones (see www.linuxdevices.com).

Dual licensing Consultation

Patronage Subscription

Hosting Embedding

ricks for making money

Tere s a grea dre o ear ear  moey from ope source sofware. I s parcularly kee because ayoe ca compee usg producs belogg o he publc doma. Frs of all, here s moey o be made from suppor serces: ser ces: much ope source source sofware s o kow for s ease of sallasal lao. Varous Varous compaes ake adaage of hs facor by packagg he orgal produc more aracely ad roducg  o he marke a a commercal prce. Uder he erms of a serce ser ce corac, hey also al so esure ha ew updaes are mpleme mplemeed ed promply. Icome ca also be eared by elmag elm ag rsks. rsk s. For sace, hardware supplers guaraee he operao of her sysems proded ha he Lux operag sysem s acqured from a ge ope source suppler. Ts s oe of he reasos why Red Ha s much  demad as a Lux L ux suppler. Oerall maageme of ope source rsk s offered by Ope Source Rsk Maageme (ww (www. w.osrsk osrskmaageme.com) maageme.com).. I he “expeses” colum, here are sags. Up o ow, ope source compaes hae o o requred large sales sa les ad markeg budges o be successful, ad hey sae subsaal coss  research ad deelopme due o he corbuos of he commuy. Fally,  s mpora o remember ha he wllgess of radoal I compaes o suppor ope source sofware s frequely relaed o her desre o cural cur al he  he power of of oher players. Earg moey ad akg he wd w d ou ou of he sals sa ls of he compeo aurally go well wel l ogeher. ogeher.

96

Open for Business

I s for hs sraegc reaso ha h a compaes such as IBM ad HP prode prode paroage. Open source: a snapshot of the I world

Al mos eery day here Almos  here s somehg ew o oe abou ope source. source. Cosequely, hs chaper ca oly prode a porra a a po  me. Wha was closed yeserday mgh be suddely ured o ope source omorrow.. Ad a closed row c losed source operaor wh a passe ope source polcy polc y could suddely make a akeoer moe omorrow ad hae o absorb a ope source compay. compay. Te marke s couously  moo, ad deelopme occurs rapdly. Hardware supplers hae, so o speak, he leas o lose or he mos o w. Ope source sofware prmarly prmar ly offers hem aleraes for sregheg her relaoshp wh cusomers. Mcrosof has he leas affi y wh he busess bus ess of ope source because bec ause  supples early he ere sofware sack. sack . Te compay s parcularly parcu larly apprehese apprehese abou abou compeo from Lux affecg s mpora mpor a cash cow, cow, Wdows. Oher players ofe rally her  her forces  order order o mou a collece assaul o he marke. Of course, here are also allaces bewee esablshed producers ad ewcomers, ge he segmeao of sofware maufacurers, packagers, resellers, I serce proders, or combaos of hem. Te allaces may go as far ha he oe (radoal sofware compay) buys ou he oher (he ope source compay). Below, we wll descrbe deelopmes  he secor by referrg o a umber of producers. We We do o ed o ge a complee pcure of he sofware marke, merely use hese examples o llusrae how he ope source model affecs sraegy.

3.11 Open source has transformed the software portfolio 3. Ope source sofware has ow compleely shed s aomalous, eccerc ad “aarchc” saus. I 1998 hs erm was firs used o ag  as aberra, alhough somewhere aroud 2004 a chage seems o hae occurred. As edece of hs raso, IDC publshed a repor a he ed of 2004 wh he reealg le “Worldwde Lux 2004-2008 Forecas: Mog from Nche o Masream.” Mas ream.” I md 2005, Mcrosof ee aouced ha s Vrual Serer produc would suppor Lux, ad Su Mcrosysems ope sourced s Solars operag sysem. Nowadays, here s a ope source alerae for early eery busess eed. I mos cases he aleraes are less “scaleable” (bu are eerheless capable of ), ad hey rage from daabases (MySQL ( MySQL)) o complee applc applcaos, aos, such as he Compere ERP package ad Sugar CR CRM M. Expecaos are ha ope source sofware producs wll coue o brg abou furher chages  he

3 • Te software market has taken the lead lead

97

sofware world. Ts s llusraed by Fgure 3.1, whch specfies he perceage of ope source sofware employed  see I I  caegores. Core software open source based by 2010

30 Percentage

28,2

25

28,0

25,6 24,0

23,9 22,3

20

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g l s n t o o n v e r i n e m s i e t t m t o r a s t c a s e r p i e l y p s l o p O v e A p e D

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s n o p v t y e s o n s i o a y e r i t t n k i i i r a l e s u c t u s i c a t g e B D l t p o d I n a p p r

Software type

Figure 3.1: Open source pervades all segments (Saugatruk, December 20051)

A he ed of Noember 2005, he Amerca busess joural CIO Insight repored ha ope source sofware had become a sraegc choce for orgazaos (a leas  he US). US ). Te followg bref surey shows he exe of hs shf: Who embraces open source and why? • 81 of companies have access to open source software or are considering the possibility of using it. • 72 are planning to expand the use of it. • 64 say that open source has provided them with a competitive advantage. s ource has stimulated the innovation in the company. • 65 say that open source • 67 choose open source primarily because of costs. CIOInsight.com, CIOI nsight.com, November 20052

Orgally, ad we are speakg abou less ha e years ago, he opesofware world was almos compleely dorced from he res of he I dusry. I was cu off from I serce ser ce proders (Capgem, (Capgem, Aos Org, Org , Acceure, etc.), from hardware maufacurers (IBM ( IBM,, Su, HP, HP, Dell, etc.) ad from he sofware esablshme (IBM ( IBM,, Mcrosof, Oracle, SAP, SAP, etc.) e years ago, here was hardly ay oo of ope source sofware producers lke hose of oday (Red Ha, Suse, Noell, Compere, Sugar CRM

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ad MySQL). MySQL). Te ope source sofware commuy (aa la lere!) mama ufacured “free sofware” ad bore, depedg o he obserer, a aarchc, lbere, lber e, democrac, democrac, socals or commus deologcal deologcal sgma. Ts T s “free “f ree sofware” had absoluely absoluely o credbly as a a  alerae o commercal, prop propreary-dr reary-dre e operag operag sofware, daabases, ERP sysems, etc. Compuers operag o Lux were oly for “hackers,” a ha me a ckame ha had ohg o do wh he curre more pejorae erm meag “compuer crmals.” Te ope source commuy commuy was orga or gally lly a somewha solaed club of acss who fel ha compuer sofware should o be a source of skyhgh profis bu should acually be publc propery. Ts would be farer, because he world was becomg more depede o sofware sysems, ad uwaed ad uecessary uecessary feaures should should be appro appropraely praely elmel maed  a “egalara” “egalar a” ope source world. “Ioao” “Ioao”  he sofware sofw are field would go wrog less quckly. quck ly. Afer all, all ,  was he age of ew ersos ersos ( parcular of UNIX ad PC sofware packages), whch were beg geeraed  rapd successo. successo. Eeryoe, cludg he sofware sof ware maufacurers hemseles, hough ha hs was ulmaely a raher uhealhy suao, obously focused o eer-creasg profi. Cosequely, he free-sofware free-sof ware moeme moeme ceraly cera ly had a po, sofar as hs oersupply of fucoaly was cocered. Whe he  he free-sofware free-sofwa re moeme moeme muaed o ope source source sofware  1998, serous compeo, specfically amed a propreary sofware compaes, had become a esablshed es ablshed fac. oday, we meo free sofware ad ope source sofware  he same breah ad see he acroyms F/OSS F/ OSS or FL/ FL /OSS eerywhere – he “L” sadg for “Lbre”  order o dcae ha h a we mus udersad “free”  he  he sese of “freedom” raher ha  he sese of “free of charge.” Te serous compeo daes from he same year, all begg wh Lux ad Nescape, whch was ope sourced uder he ame “Mozlla.” A prese, o ye e years laer, he suao has bee reersed. Wha was oce descrbable as “almos compleely dorced from he res of he I dusry” has bee replaced by he “fully egraed” curre sae of marrage. marr age. I addo, ope source sofware has ha s become srogly commercalzed, whch s ewed as a despcable deelopme by some bu s regarded by ohers as a moe ha guaraees couy hrough he healhy erplay of supply ad demad. Ope source sofware has compleely chaged he I playg field. For sace, a former ework sofware compay such as Noell ow focuses o ope source sofware. Te same holds rue for IBM, IBM , Su, HP ad ohers. Sofware opeess ad rue ope source sofware producs hae aaed a defie ad oeworhy place  he coemporary I ladscape. Udoubedly, he prce adaage of ope source producs  rece years has helped o creae c reae a more pose mage of he I secor amog cusomers.


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3.2 Te business model of the original open source organizations May ope sourcers sell “secury”: he secury ha you hae he rgh erso of he produc, produc, ha  ha you wll w ll recee updaes ad paches o me, ha you wll o be esared  legal dspues, ha he sofware s easy o sall, sal l, ad especally especal ly he secury secur y ha you ca coac someoe someoe wheeer here s a problem. Ts s especally oable  he case of Lux producs. Ayoe ca dowload ad sall hem, bu  s o a easy uderakg. Red Ha ad Noell (Suse, Xma) are wo compaes ha capalze o hese cocers. Sce Lux s,  fac, hreaeed by lably o hrd pares, demficao s also a alued serce. For hs reaso, ew compaes hae come o exsece o ac as a sor of erface bewee a parcular ope source commuy ad s users. New compaes such as Yggdrasl Compug, Xma, Deba, Suse ad Red Ha are capable of prodg adce abou he more serce-oreed ope source ssues. Tey focus o he “marke roduco”  roduco” of ope source. Ter approach s aboe all pragmac; hey are o dre by ay dealsc oos such as hose propagaed by Rchard Sallma’s Free Sofware Foudao. Tese compaes jus wa o make moey by prodg good serce. ser ce. Ayoe quesog he success of a ope source compay wll ofe hear,  respose, he umber of mes ha he program has bee dowloaded (for example, 10,000 mes a moh). Does such acy geerae reeue, hough. Te suppler hopes ha a poro of hese dowloads wlll resul  cusomers wl cusomers wllg wll g o pay for ser serces. ces. Larry Augus, Augus , a ope source erepreeur rgh from he sar, fouder of VA Lux Sysems (ow VA Sofware) ad member of he Board of Drecors of he Ope Source Deelopme Lab (OSDL (OSDL), ), oce calculaed wha would happe f Sebel, a CRM maufacurer, were o make s sofware ope source. If hey had oped for he ry-ad-buy model of ope source programs (firs dowload ad see f  works, he perhaps buy ), Sebel would hae, firs of all, reduced expedures exped ures o markeg ad PR . Tese could hae bee cu o oe quarer of he orgal amou. Afer all, he deelopme of expese adersg campags would o hae bee requred ad a large umber of he well-pad sales persoel would also hae bee uecessary. By makg mak g greaer use of a sofware deelopme commuy, commuy, Sebel could hae saed o R&D as well. Ad oerhead coss would hae also srogly decreased  adopg he ew model. Augus’s calculaos show ha he profiably profiabl y of ope source operaos has a lo o do wh reduced expedures. Te akeoer of Sebel by Oracle meas ha Augus’s proposal for Sebel wll rema a fico, bu  s cera ha propreary sofware maufacurers wll clude hese sors of calculaos  cosderg he possbly of makg her sofware ope source.

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Alhough he orgal ope sourcers dd o hae o es  cosly adersg ade rsg campags ad he lke, l ke, hey sll had o oba come come from somewhere, ee f her coss were lower. Te ry-ad-buy mehod was prmarly applcable o producers offerg a dual lcese: a ormal ope source lcese for a lmed erso of he sofware ad a pad lcese for he exeded ex eded erso. Howeer, Howeer, here were oher mehods for geerag supplemeary sources of come. Le us ow cosder how a umber of ope source orgazaos maaged o ear her wages. Apache

Te mos successful ope source produc, he Apache webserer (whch has a 70 perce marke share), s produced by a orgazao whou ay commercal dre. Apache s a o-profi orgazao made up of olueers. Lke oher olueer orgazaos, Apache operaes for he mos par o he  he bass of doaos. Te Ued Layer compay hoss he se free of charge. HP, HP, Su ad IBM make hardware aalable. Te mos mpora doaos coss, howeer howeer,, of he me  me ha olueers sped workg  he  he Apache commuy. Tese Tese olueers olueers are prmar prm arly ly people ha work wh Apache whle hey are o he payroll of oher compaes. Te presde of Apache, Bra Behledorf, ears hs come  oher capaces::  parcul paces parcular ar as pres presde de of CollabNe Collab Ne,, as well as from hs lecures ad books. Apache does o ear ay moey from cusomer suppor, smply because he orgazao orga zao has chose o o offer . Quesos from users are ally a lly hadled ha dled by meas of a ere ews group. group. Ts has worked well, bu as s he case wh all oher mpora ope source programs, here are o commercal Apache suppor compaes. MySQL

Daabase suppler MySQL ears s moey solely by sellg lceses. I s a so-called so-cal led dual-lcese suppler, suppler, whch meas he sofware sofwa re s made aalable uder boh a ope source ad a commer commercal cal lcese. Te commercal lcese offers he adaage of more more secury, suppor ad a serce guargu araee. MySQL s dowloaded 20,000 mes a moh. Oe  a housad dowloads resuls  he purchase of a pad lcese. Besdes lceses, MySQL has wo oher sources of come: membershp  he ole serces, ad frachses fra chses for MySQL producs ad serces uder u der he MySQL brad ame. Some people  he ope source world dsapproe of hs form of lcesg polcy, bu  s reasoably successful  pracce. Aual sales amou o approxmaely US$40 US $40 mllo, ml lo, ad double double eery year. Mare Mckos, Mc kos, he CEO of MySQL, MySQL, saes  a erew wh BusinessWeek3 ha fuure sock marke regsrao s ceraly  he realm of


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possbly. Alhough a early akeoer by Oracle was rebuffed, Mckos also cosders  possble ha he orgazao may eeually become a par of a larger compay, o codo ha he MySQL ame sures. Zend

Ts suppler of he PHP web deelopme laguage ears moey from suppor serces ad membershp corbuos o he Zed plaform. Te Zed serces clude rag, applcao desg ad PHP code reew. Te esors behd Zed are a umber of eure capal fuders, bu also compaes such as SAP. SAP. Te Zed cusomer daabase umberss abou 4,000 busesses, cludg Lufhasa, umber Lufha sa, Dsey ad a d Wallsree:ole. Zed’s sraegc parers are IBM, IBM , SAP, SAP, MySQL, MySQL , Adobe ad Su. Red Hat

Red Ha delers Lux sofware ha s cerfied cer fied by IBM, IBM , HP ad Oracle. Ts saus makes Red Ha profiable. Compaes wag o ru Lux o her serers ca do so whou Red Ha; hey ca dowload ad sall he operag sysem for free. Howeer, he cerficao by he supplers prodes some secury cocerg he proper operao of he sofware ad – ee more mporaly – demy from ay poeal hrd-paryy legal clam based o alleged propery hrd-par propery rghs r ghs o he sofware. Ts “demficao” s a ery mpora po. Te prce of Red Ha Lux also al so cludes a membershp membershp ha eles he purchaser o a umber of suppor serces, such as regular updaes ad recficao of errors. Depedg o he eed, regsrao  addoal serce programs s also al so offered. Novell

Noell s a eera player ha,  rece years, has udergoe a complee rasformao akg a kg     he dreco drec o of ope source. source. Te compay eared jus uder US$1 US $1 bllo from maeace ad serce ad a quarer bllo b llo from lceses. l ceses. Te lcese come, come, whch mosly resuls from he old Neware, s declg because he produc s earg he ed of s s lfecycle. lfec ycle. By akg ak g oer Suse ad Xm Xma, a, Noell has acqured acqu red a srog poso  he marke for he Lux deskop  parcular (alhough Suse prodes Lux for serers ad deskops). I exchage for a lcese (cludg upgrade proeco ad a corac for echcal echca l suppor), Noell demfies s cusomers for ay poeal hrd-pary

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Open for Business

clams based o ellecual propery rghs. For ha maer, he coss of such lceses ca amou o as much as 24,000 euros per year per serer. Suse ears moey from rag ad cosulacy  he field of ope source. Wh he akeoer of Xma, Noell ow also delers deskop applcaos for for Lux, such as ex ex  processg ad slde presepreseaos – cdeally, cdeal ly, hese are applcaos ha  ha dere from he Gome ope source projec. Digium

Dgum s a commercal hardware ha rdware compay compay ha does o ear ay a y moey from ope source sofware bu from sellg producs ha compleme use of he sofware. Wh Asersk, s ope source produc, Dgum s see as a challeger chal leger o he esablshed elecommucaos dusry. dusr y. Te Asersk sofware sof ware of “oce oer IP” IP ” elephoy s rapdly becomg cred credbly popular. Ts sofware, whch rus o Lux, s beg offered by 130 supplers worldwde. I has he capacy o coec o ay make of elephoe exchage ad eable delery of VoIP Vo IP serces, cludg coferece calls ad ocemal. Te sofware was orgally wre by Mark Specer, oe of Dgum’s employees, bu he code was he supplemeed ad exesely esed by a ope source commuy. Ge ha Dgum was resposble for desgg Asersk,  ca clam ha s hardware s more suable for rug  ha ay oher: “Sce Dgum s he creaor of Asersk, Dgum hardwaree s desged specfically wh Asersk  md.” hardwar “Spencer says that companies are confronted by the choice of standing on the sidelines or becoming b ecoming themselves ‘disruptive innovators’. innovators’. By making Asterisk Asteri sk available as open source under a GPL license, Digium has evidently chosen the second option. Te telecom market offers an ideal piece of fertile ground in which to do this, given its extensive customer group and the substantial price difference between proprietary solutions and open source alternatives. Te relatively technical character of the telecom market is also helpful. Ultimately, the message from Digium is that its products are tailored to the perspective of the customer, because vendor lock-in is avoided. Or in Spencer’s own words, ‘Open source and the GPL are about the customer first, not the vendor. So you have to adapt to those things.’” Mark Spencer, 20054


103

SugarCRM Sugar CRM

SugarCRM s SugarCRM  s a commercal ope source compay. compay. I was fouded  2003 by Joh Robers, Cl Ora ad Jacob aylor, all hree of whom had worked for Epphay, a CRM suppler wh US $100 mllo  sales. Te compay produces CRM sofware, a produc ha has specal sgficace because may ope source skepcs doubed wheher hs sor of alueadded sofware could be proded  a ope source maer. Sugar CRM employs a dual-lcesg sraegy, jus lke MySQL. MySQL . Ts meas ha he compayy ears moey from a commercal compa commercal erso of he produc: produc: he ProPro erso.. Pro users pay for exra feaures ad serces. erso ser ces. For $40 per user per moh, a hosed erso s offered, ad US$239 US $239 buys a regular lcese for oe user for oe year. year. Help for sallao sal lao s offered  hree-hour blocks. Te ope source source lcese s a Mozlla Mozl la ara ar a (Sugar/Mozll (Sugar/Mozlla) a) ad herefore herefore o a GPL. GPL . o o emphasze emphasz e he ope source aure au re of he compay, he compay clams cla ms o sped oly e perce perce of he me  me deoed o ew releases releases o he commercal ersos. wo eure-capal fiacers hae esed  Sugar CR CRM M: Draper Fsher Jureso ad Walde Ieraoal. Ter esme was based o he umber of dowloads, whch has ow rse o 20,000 per moh. May of he ope source players are suppored by he esablshed order; IBM, IBM, HP HP,, Su, Adobe, SAP, SAP, ad Oracle hae all proded a helpg had. Asssace has ake arous forms: makg drec doaos of me ad moey (as  he case of Apache), assumg he legal rsks olg copyrgh clams (as  he case of Red Ha Lux), or formg sraegc parersh pa rershps ps (as  he case c ase of Zed). Ts s,  s, howeer, suffice o keep a compay’s head aboe waer. Ope source orgazaos hae arous busess models. For example, he moey-geerag moey-geerag capacy c apacy of Apache les l es erely ousde of he compay self. Moey s eared by explog kowledge abou ope source  aoher maer. Furhermore, here are players who employ a duallcesg sraegy, offerg he marke boh a free ad a pad ara. SugarCRM Sugar CRM s a orgazao orga zao ha,  addo o dual lceses, offers a hosed erso of he produc as well. Ts offers orgazaos he opporuy o make use of he ope source sofware whou hag o acually ow . SugarCRM Sugar CRM s,  hs way, a drec compeor wh odemad Sebel or CRM’ CRM ’s Salesforce Sa lesforce.com. .com. Howeer, ayoe assumg ha he ope source ara s cheaper wll be dsappoed. A comparso made a he begg of 2006 dcaed ha Salesforce.com, 5-user edo, was beg offered a a lower prce ha he ope source alerae from SugarCRM Sugar CRM.. I addo o lcesg come, almos all ope sourcers recee come from serces: rag, cosulacy, as well as pach ad upgrade serces. Zed, for example, sells serces such as a membershp o he plaform ad charges a u prce per processor per year.

104

Open for Business

3.3 Te established order and the new wave get together A prese, commercal ope source sofware has become a separable par of he moder I ladscape,  par due o ucodoal suppor from large corporaos such as IBM, IBM , Su ad HP. HP. Noably, he wo larges l arges propreary sofware compaes, Mcrosof ad Oracle, are hag some dffi cul culyy wh hs h s suao, bu hey wll w ll ceraly cer aly o allow her he r problems o coue uabaed. Te Ope Source Sofware Deeloper Lab L ab orgazao (Lus oralds’s home base, whch has oly exsed sce 2000), he eormous growh  he umber of ew ope source sofware orgazaos sce 1998, ad he accepace of ope source sofware by I serce ser ce proders, hardware maufacurers ad a umber of of large propreary sofware producers hae sgficaly creased he mporace of he ope source moeme. As a cosequece, a world whou ope source s o loger coceable. Proprietary-software Propri etary-software suppl suppliers: iers: the open source strategist

Ta par of he I esablshme ha collecs a grea deal of s reeue from he sale of sofware lcese l ceses, s, players lke Mcrosof ad Oracle, ews ope source as a drec compeor. Te predoma mdse  hs group s adersaral: Lux ersus Wdows, MySQL ersus Oracle, Compere ersus SAP. SAP. Nearly eery propreary produc wll sooer or laer be cofroed by a ope source alerae mea o compee wh esablshed players – ally  he less expese rage. Ad alhough oe aemp may be more successful successful ha aoher, he esablshed compaes are also makg her firs sraegc moes regardg ope source, admedly  a ery cauous c auous maer. maer. Esablshed players are accepg cera cera  ope source producs. For example, Mcrosof recogzes Sugar CR CRM M, whch mmedaely rases he queso of wha hs meas for compeo from ope source  oher areas where Mcrosof s ace. Noably, Oracle adops he sraegy sraeg y of aowg s belef  Lux L ux as a replaceme for Wdows whle clamg o o see ay hrea  such daabase producs as MySQL or PosGreSQL. PosGreSQL. Te compay’s compay’s ew, o he record, s  s ha daabase sofware s smply beyod he capacy of he ope source commuy. Drec aacks o ope source (for example,  repeaedly clamg ha he qualy s poor or he rsks oo grea) hae hae lle credbly  he eyes of he cusomer whe he compay offerg hs kd of argume embraces ope source  oher (o-compeg) areas. I ay ee,  s exremely ex remely doubful ha  ha cusomers would eer accep such a head-o sraegy from Mcrosof, parcularly ow ha  s seekg rapprocheme wh he  he ope source world.


105

Proprietary hardware and services: the open source opportunist

Ay compay ha does o hae much of s ow sofware s  a relaely smple poso. I prcple,  does’ cocer HP or Dell f ope source or propreary sofware s beg operaed o her hardware. Tey are happy f he sofware works well a a compee prce for he cusomer who who s usg her hardware. h ardware. So f hey see greaer opporues opporues   promog ope source oer oher sofware, hey hae o qualms abou wholehearedly dog so. Whle ope source sraegss hae o defed a poso o he sofware fro, hardware supplers are free o ake  ake adaage of opporues: hey are ope source opporuss. HP has a aggresse rp-ad-replace sraegy: UNIX ad Solars are beg show he door ad,  her place, Lux (ad serer hardware from HP ) s beg roduced. rod uced. Tey wll also ry r y o perform he same rck  oher areas of he sofware sack (MySQL ( MySQL ad JBoss are o follow). HP has lmed reeue from propreary sofware ad, as a resul, ca afford o fully coer o ope source, as ca Dell. Sce opporuss also regularly form allaces wh sraegss, examg he aces of fie radoal players (Mcrosof, Oracle, IBM, IBM , HP ad Su) wll llusrae he rage of sraegc ad opporusc posos. We wll beg wh he wo sofware compaes lsed aboe, as hey hae a erely dffere poso  he field ha he oher players meoed. Tey Tey wll w ll be followed by IBM, IBM , whch has subsaal eress  propreary hardware combed wh some eres eres  propreary sofware. Nex Nex wll w ll be HP, HP, a hardware suppler ha has much less o lose sofar as lcesg s cocered. Fally, Fal ly, we we wll wl l look a Su Mcrosysems, whch s prepared o ake greaer g reaer rsks ad o es wholehearedly wholehearedly  a ope source fuure.

“open source movement” 3.4 Microsoft: the favorite target of the “open Te Europea GgaWorld 2005  Prague Prag ue was opeed by Forreser’ Forreser ’s fouder ad CEO, CEO, George Coloy Coloy,, wh he  he assero ha Lux Lu x was he bgges hrea o Mcrosof’s exsece. Bu wha does ha mea for a orgazaorgaz ao ha, accordg o may, may, has always a lways oly had he wd  s sals, ad ha clearly has bee able o make he rgh moes a precsely he rgh mes  order o sure fiacally or, beer, o excel? A leaked eral repor has made  geerally kow ha Mcrosof was well aware of ope source ad he hrea posed by  as early as 1998. Ad Mcrosof was udoubedly already aware of hs deelopme pror o he. Te leaked repor s kow  cera crcles as he so-called “Hallowee Docume I,”5 a ame dered from s publcao aroud Hallowee ad perhaps from he Hallowee horror films abou a usoppablee psychopahc slasher soppabl sla sher.. Mcrosof has cofirmed he auhecy

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of he docume, whle commeg ha  does o represe he compay’ss offica pay’ call ew. Te docume was wr wre e by Vod V od Vallopplll Valloppl ll ad Josh Cohe. wey-oe people worked o  a Mcrosof, ad here were fouree resos of he orgal org al ex. ex . Clearly, work o he docume docume was horough. Te Hallowee documes reeal ha a Mcrosof  1998, he year whe ope source was beg coceed, some crcles were deeply mpressed by he sofware producs ha he ope source commuy was able o deler, as well as wh he maer of collaborao oled. We ce he firs Hallowee docume: From research research by Microsoft into open source conducted in  • OSS poses a direct, short-term revenue and platform threat to Microsoft, particularly in the server space. • Additionally, the intrinsic parallelism and free idea exchange in OSS has benefits that are not replicable with our current licensing model and therefore present a long-term developer mindshare threat. • Recent case studies provide very dramatic evidence ... that commercial quality can be achieved/exceeded by OSS projects. OSS , we must target a process rather • ...to understand how to compete against OSS , than a company. • OSS is long-term credible ... FUD [Fear, Uncertainty & Doubt] tactics cannot be used to combat it. • Linux and other OSS advocates are making a progressively more credible argument that OSS software is at least as robust – if not more – than commercial alternatives. Te Internet provides an ideal, high-visibility showcase for the OSS world. • Te ability of the OSS process to collect and harness the collective IQ of thousands of individuals across the Internet is simply amazing. More importantly, OSS evangelization scales with the size of the Internet much faster than our own evangelization efforts appear to scale.

Wha s eresg  he aalyss s ha Mcrosof defies he logerm rsks of falg o make use of a larger commuy. Te Hallowee docume speaks abou a “mdshare hrea,” he dager ha Mcrosof mgh be uable o arac ad capalze o he ales of brgh mds because hrd pares are excluded from he closed Mcrosof commuy of sofware deelopers. Wheher hs docume was resposble for he expaso of he Mcrosof’s Shared Source commuy sraegy 6 s dffi d fficul o proe. Shared Sh ared Source s, so o speak, he ope source alerae for he propreary producs of Mcrosof. Seleced pares (cusomers) are ge he opporuy o ake a ke par. Deelopers ousde ousde Mcrosof ca also sar her ow ow  projecs o GoDoNe (Go.e) or, a he ao of Mcrosof, may be


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asked o parcpae  a -house projec. GoDoNe umbers oer 8,000 workspaces (sofware projecs ad schemes). Sx housad people ook par  s larges projec (cocerg he Mcrosof referece archecure); he smalles projecs coss of sgle-perso schemes. Ayoe sarg hs or her ow projec may choose from a umber of lceses. I mos cases, he choce s for a “as-s” lcese, whch meas ha he deelopers are o resposble f he compuer crashes. Te projecs ake oer by Mcrosof are placed uder specfic Mcrosof lceses, whch are herefore o ope source lceses. o udersad he ope source sraegy of Mcrosof, a dsco mus be made bewee s commuy aces ad s commercal effors. Mcrosof perhaps does lle  he commercal sphere wh ope source, bu  s ceraly exremely ace o he commuy sde  aracg rac g more people people o s ow produco program program ad  mak m akg g use of exeral exer al kowledge k owledge.. Te lceses mgh herefo  herefore re be dffere, bu GoDoNe s a lg commuy ha,  ha,  may respecs, has a ope-source equale: SourceFo SourceForge.e. rge.e.

Figure 3.2: Te software community helps Microsoft with a few thousand projects

Competing with Linux and other open source products

Lux had o be kep uder Mcrosof’s humb, or so Mcrosof hough. Te pla was o cu  off a he pass, so o speak: “By exedg hese proocols ad deelopg ew proocols, we ca dey OSS projecs ery o he marke.” Whe hs sraegy was reealed,  creaed a eor-

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mous amou of bad blood  he old-fashoed peace-log Sl co ValValley commuy. Offic cal ally, ly, Mcro Mcrosof sof descrbed descr bed s respec for ope source, demosraed  he firs Hallowee docume, as embracg he free exchage of deas, whch occurs  eery healhy orgazao. Subseque Mcrosof aual repors repor s ge regular regula r aeo o ope source as a omous hrea. Of course, hs was par of he dsclosure of comprehese ad ruhful formao o shareholders, bu he suspco remas ha here was somehg more gog o. Below s a bref seleco of excerps from he aual repors: Microsoft considers a potential shift in the market (annual reports -)

999: Possible fundamental transformations “Te Company is faced with the possibility of paradigm shifts from PC-based PC-based applications to server-based applications or Web-based application hosting services, from proprietary software to open source soft ware, and from PCs PCs to Internet-based Internet -based devices.” : Tis development persists “Te Company continues to face movements from PC-based PC-based applications to serverbased applications or Web-based application hosting services, from proprietary software to open source software, and from PCs PCs to Internet-based devices.” : Competitive challenges “Open source software, new computing devices, new microprocessor architectures, the Internet, and Web-based computing models are among the competitive challenges the Company must meet.” meet .” : Te business model is in danger “o “ o the extent the open source model gains increasing market acceptance, sales of the Company’s products may decline, the Company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline [...] the popularization of the open source movement continues to pose a significant challenge to the Company’s business model, including recent efforts by proponents of the open source model to convince governments worldwide to mandate the use of open source software in their purchase and deployment of software products.” : Open source is akin to theft and illegal copying “We face direct competition with firms adopting alternative business models to the commercial software model. [...] Additionally, global software piracy – the unlawful copying and distribution of our copyrighted software products – deprives us of large amounts of revenue on an annual basis.”


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4: Offense is the best defense, and  concerns continue “While we believe our products provide customers with significant advantages in security and productivity, and generally have a lower total cost of ownership than open source software, the popularization of the non-commercial software model continues to pose a significant challenge to our business model, including recent efforts by proponents of open source software to convince governments worldwide to mandate the use of open source software in their purchase and deployment of software products.” 5: Open source means that our earnings will fall “In recent years, a non-commercial non-commercial software soft ware model has evolved that presents a growing challenge challenge to the commercial software softw are model. Under the non-commercial non-commercial software model, open source software produced by loosely associated groups of unpaid programmers programmers and made available for license to end users without charge is distributed by firms at nominal cost that earn revenue on complementary services and products, without having to bear the full costs of research and development development for the open source software. sof tware. o o the extent open source software sof tware gains increasing market acceptance, sales of our products may decline, we may have to reduce the prices we charge for our products, and revenue and operating margins may may consequently decline.”

Te forecas would seem o be for a drop  sales due o he effecs of ope source, bu here s o o sg of ay such hg h g a hs me.  me. Busess s sll sl l excepoally good for Mcrosof, alhough he compay s cocered abou wha he goerme s gog o do. I keeps a sharp eye o procureme polcy, fearful ha a gudele mgh be adoped uder whch he use of ope source would become madaory  he publc secor. Mcrosof’ss labelg Mcrosof’ label g of ope source as “o-commer “o-commercal cal ” dsregards he fac ha  1998 he ope source ae was esablshed precsely o drag “free sofware” (he ame of he produc group ul ha me) ou of he o-commercal corer. I Mcrosof’s ew, he aerage ope source lcese reurs oo lle l le come, ad furhermore, que a umber of ope source projecs are “ral”  he sese ha eery added sofware code auomacally eers he publc doma. From CO to interoperability: Google becomes the greatest enemy

Te bod wh he commuy of sofware deelopers s esseal; selece pars of propreary sofware sof ware are coered o ope source. source. Te sraegy has h as shfed sh fed from a aack o ope source o a affi rmao of compay sreghs. Lux, he  he ope source source showpece, hs Mcrosof Mcrosof rgh rg h  s produc porfolo. As he mos mpora expoe of he propreary

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sofware model, Mcrosof s sl s lll he mos successful I compay. compay. Mcrosof’ss aswer o ope source s,  sof’   heory, paes. paes. Sx years afer he  he sar of ope source, Bll Gaes flaly saes ha “creased, ese focus o proecg ellecual ellecua l propery” s Mcrosof’s aswer o ope source source ( InformationWeek 2004). Mcrosof’s respose o he creasgly more popular ope source sofware has shfed oer he years. For a log me, Mcrosof drew marke aeo eo  o busess coss. Ts wll w ll co coue, ue, as coss clearly rema mpor mpora  makg a purchase. Bu  February 2005, Mar aylor, Mcrosof’s geeral maager of plaform sraegy, explaed ha “oal cos of owershp” wll wl l o loger be emphaszed emphaszed  dscussg d scussg Lux. L ux. aylor aylor dcaed ha Mcrosof wll ake a more praccal ack followg a sudy by Juper, a Amerca hk ak, whch foud ha Mcrosof was he bes  erms of eroperably. Mcrosof possesses a large umber of XML -relaed echologes ad paes. Compaes are eresed  a smple egrao of applcaos,, ad XML s excepoally well sued for applcaos for hs purpose. Laer  2005,  ured ou ha hs shf o webserces has eeryhg h g o do wh he ew hrea: Google. For ha maer, wargs abou he dager posed by hs ew ral ra l were,  fac, already prese  all al l he preous aual repors. Google ad smlar sm lar ees  he Web 2.0 2.0 realm are ow see as he greaes hrea: he era of flexble ere s acually upo us. Rece moes by Google brgg Youube, DoubleClck ad Apple V o he former search-ege-oly compay sreghe he cocers. Wh her ere  ere collaborao ad modular rasparecy  rasparecy,, he  he more ope-source relaed sofware “mash-up” busess ad he dsrbued maer of sofware deelopme assocaed wh  hae made a sgfica corbuo o hs secod comg of he Web. Mcrosof s a serous coeder  he deelopme of webserces ad mash-ups. I December 2005,  publshed a mash-up of Dyamcs 3.0 ad MapPo, MapP o, Mcrosof’s ole mappg serce. ser ce. Wh hese  hese mash-ups, users ca lk l k her cusomer daa  he CRM sysem o a locao dagram. A he sar of 2006, more sofware exesos were released for applcaos cludg CRM ad ERP. ERP. I coeco wh he  he Shared Source ae, such aces occur uder u der wha wha s kow k ow as a Permsse Lcese, whch perms users o “ew “ ew,, modfy modf y ad redsrbue redsr bue he source code for eher commercal or o-commercal purposes.” If ha s o ope source....

3.5 Oracle does not believe in open source business but still buys the companies

Ope source s a sofware deelopme model ad o a busess model, Oracle clams. I oher words, ope source s a eresg way o produce sofware, bu forge abou makg ay moey from . Is pressure o he marke s exese, eerheless. eerheless. I Aprl 2003 Larry Lar ry Ellso, El lso, CEO


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of Oracle, reeraed he compay’s poso: poso: “Te “ Te daabase s he  he las pece of sofware sofwa re ha faces a hrea from ope source.” I he meame, Oracle Orac le has ow acqured Iobase. Purchased  2006,  s a Fsh compay ha maas srog lks wh he ope source commuy MySQL . I fac, Iobase supples a sorage ege for MySQL . MySQL also has a srog relaoshp wh SAP. SAP. Oracle’ss ope source ambo s ow growg expasely Oracle’ ex pasely.. I February Februar y 2006, BusinessWeek reealed ha Oracle would lke o buy a leas hree more ope source compaes, ad wroe he followg: Oracle can rival IBM for leadership of the open source movement “Overnight, Redwood Shores-based Oracle would rival IBM as the prime evangelist of a movement that’s revolutionizing how software is developed and distributed.” BusinessWeek , 20063

Te bgges of he hree fish ha Oracle has bee pursug s he mddleware compay JBoss, a compay ha uses ope source o compee wh BEA sysems, IBM ad, o a lesser exe, wh Oracle self. Wh a oal of 16 mllo ml lo ere dowloads, JBoss esmaes s ow alue a lue a aroud aroud US$400 US $400 mllo. Te secod compay o Oracle’s wsh ls s Zed. Te scrpg laguage for webses ha Zed prodes ( PHP PHP)) s used o 18 mllo webses. Zed s allegedly worh US$200 US $200 mllo. Sleepyca s umber hree. I makes sofware used  umerous ope source daabases. I fac, Red Ha has jus ake oer JBoss for US $350 mllo, bu speculao specul ao abou Oracle’s Oracle’s ope source maeuers kows o ed. A week afer Red Ha sged he fial corac corac wh JBoss, Oracle boss Larry Larr y Ellso declared ha Oracle would lke o be a proder of he ere sofware sack, jus lke Mcrosof. Ad hs would clude a operag sysem. Oracle has already bee cosderg he acquso of Noell, he larges Lux dsrbuor afer Red Ha. Perhaps shorly wo fles wll be swaed  oe blow, as a akeoer of Red Ha would corporae boh JBoss ad he much coeed Lux operag sysem. Oracle s well dsposed oward ope source as a deelopme model. Udeably IBM ad Su are beer kow for pro-ope source saces, bu Oracle’s ew acquse spr mgh soo lead  o surpass boh of hem. Oracle has arous ros  he fire sofar as ope source sraegy s cocered. . Oracle uses ope source producs (such as he Apache serer) ha  has furher deeloped  he ope source commuy  order o hae her ow producs ru well wel l o hem Te work doe o o hese producs s ge back o he commuy. Oracle esures ha s ow producs operae well o Lux.

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Cluserg g  ope source. Te Te Oracle clusered file sysem sy sem was deeloped . Cluser .

. .

.

 he ope source commuy. Oher daabase producers hae, of course, also harese har esed d he fru fr u of such effors. Oracle s acely oled wh ope source producs assocaed wh s ow core producs producs ad has o fear of furher collaborao coll aborao wh he commuy. I selecs ad mplemes projecs for hs purpose o he bass of busess eeds. Oracle employees ca choose wheher o operae her lapops usg Lux or Wdows. Some cusomers, such as Msres of Defese, requre he source code o be delered alog wh he produc. Oracle also has lceses h a allow for hs. Oracle demfies cusomers, whe hey ake deler y of her producs, agas possble legal rsks assocaed wh he ope source compoes cluded  he producs. Oracle clams ha  does o lose ay sleep oer dscussos pg Oracle agas MySQL or oher ope source aes. Te compay does o percee ay real hrea from he ope source moeme ad ee defies some adaages. If a sar-up begs operaos wh MySQL because s produc requremes requremes are o errbly srge, s rge, he poeal cusomer becomes used o workg wh daabases. If such a compay coues o grow, grow,  wll wl l eably arr a rre e a a po po where he raso o Oracle becomes a serous cosderao. Ulmaely, Ul maely, cosderaos cosderaos focus o feaures, fucos ad serces. A a me whe daa egry ad a d real-me dsclosure are hgh o he prory lss of may compaes, Oracle faces he compeo wh cofidece. One open source competitor, Compiere, is an Oracle spin-off

A srkg sr kg fac s ha  ha ex-Oracle employee Jorg Jorg Jake s respos resposble ble for esurg ha ope source compeo has reached a hgher leel  he sofware sack. Jake s he leader ad seor egeer a Compere, a ERP produc ha dusry dusr y aalyss aaly ss regard as oe of of he few serous ope source ERP opos. Wheher he worked o ope source deelopme  hs free me  me or  he boss’s boss’s me as a Oracle Orac le employee s o o par of he sory. I ay case, here s o resrce polcy agas workg o ope source producs a Oracle. Te Compere produc does make some demads o he cusomer. Specfically, he cusomzed peces mus sll be added ad herefore programmed, whch whc h s, accordg o Oracle, a coceable sep backwards  he  he deelopme deelopme of ERP ER P packages. Cusomer Cusomerss wa oe-sep soluos. Uderakg ERP mplemeao wh a maual  had s a uhkable sep for Oracle’ Orac le’ss cusomers.


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3.6 IBM is an open source evangelist with enormous closed source interests

IBM s a rue eagels ad akes eery opporuy o expla ex pla how much much he compay feels self commed o ope source ad he commuy behd . IBM produ produced ced a arace arac e commercal commercal comp compleely leely abou Lux  whch  was barely dscerble ha he commercal was by IBM. IBM . I s sree adersg, IBM preses self as oe large pegu compay.

Figure 3.3: Peace, love, penguin – and IBM , IBM , of course

A few of IBM’ IBM’s achievements achievement s • I 1998, IBM bega o egrae he Apache webserer o her Web• • • • •

Sphere, whch sared he collaborao wh he commuy. I 2000, Lou Gerser aouced a eo o es US $1 mllo  Lux. 650 IBM workers parcpae  he deelopme commuy of Lux, Apache, Eclpse ad he Globus projec. IBM doaed Eclpse, Cloudscape, oce recogo sofware ad oher sofware o he commuy. IBM released more ha 500 paes  a so-called “pledge.” IBM purchased Gluecode ad deeloped a ew busess model aroud free ad ope sofware.

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Te mos alked-abou fac  hs ls l s s udoubedly he doao of 500 paes o he ope source commuy. Joh Kelly, Kell y, he seor ce presde of echology ad ellecual propery a IBM, IBM , called cal led hs doao jus “he begg of a ew era  how IBM wll maage ellecual propery,”” bu here s also propery, al so aoher sde o he sory. Of a oal oa l 3,248 3,24 8 paes obaed by Bg Blue  2005, he oerwhelmg majory rema proeced ad, o balace, ba lace, he  he compay’s compay’s poso uquesoably faors closed source. I fac, IBM has bee leadg he I dusry  erms of pae-ls pae -ls sze for years. Sll, S ll, ope source specals ad a d Saford profesprofessor Lawrece Lessg refers o he doao from IBM as a grad ad subsaal gesure. Te doao sraegy of IBM okes reacos from such people as Joaha Schwarz, CEO of Su. A few days afer hs spledd gesure from IBM, IBM, Schwarz Schwar z accused IBM of old-fashoed propreary propreary polces. Ts accusao was made  a ope leer o Sam Palmsao, CEO of IBM,,  whch Schwarz begs by aoucg Su’s pla o ge s SoIBM lars 10 operag sysem o he ope source commuy. “We’ve repeatedly passed along customer interest in having IBM support Solaris 10 with WebSphere, db2, ivoli, Rational and MQ series series products. Customers have made repeated calls to you and your staff. Tose same customers have now asked me to begin communicating with you in a more public and visible way – they’d like the choice to run IBM products on Solaris 10, and they’re feeling that your withholding support is part of a vendor lock-in strategy.” Jonathan Schwartz, 20057

Wha Schwarz Sc hwarz was wa s s suppor from IBM for Su’s Su’s Solars, Solar s, ad he draws suppor from cusomers who wa he same hg. I Seco 3.8, Su’s sraegy wl w lll be dscussed furher. fu rher. For he mome, mome, he leer s oeworhy for makg mak g  clear ha players ca hae boh ope ad closed sraeges, perhaps ee a he same me. Te fac ha h a IBM refuses o comm o supporg Solars could, of course, hae somehg o do wh he esme  her hardware ad sofware ha would be requred o ge he sysem fucog properly. A he same me, IBM would udoubedly lke o close he door o hs hardware producer who s, o pu  smply, a compeor. If he oal sofware o offer s examed, IBM coers a grea deal of he “sack” wh propreary sofware. Bu cusomers who would raher use ope source aleraes mgh also be dealg wh IBM , sce  s happy o prode he  he serce ser ce ad suppor for hs h s “compeor.” “compeor.”


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IBM’s open source Figure 3.4: Te products offered by IBM on the right; on the left, IBM’s alternatives

3.77 HP specializes in hardware and services, and seizes open source 3. opportunities

HP obas he  he majory of s reeue from Lux-relaed hardware, ad  s he marke leader  he Lux serer marke (accordg o IDC ). I fac, he compay already has more ha wo hudred deces ha ru o Lux, ad  s ery er y ace  he  he ope source commuy commuy.. HP offers s cusomer a Ope Source Referece archecure ha s fully compable wh HP’s HP ’s Adape Eerprse sraegy. Idusry sadards ad a mulOS sraegy are he prcpal eleme elemes s of hs h s archecure. I pracce, HP s especally especal ly cogza cogz a of he red whereby may cusomers cusomers of IBM AIX , Su Solars ad HPHP -UX were mgrag o Lux rug o dusrysadard serers (such as HP’ HP ’s ProLa Blade serer ser er ad Iegry serer) ser er).. I HP’ HP ’s Ope Source Referece Referece archecure, mpora buldg buld g blocks coss of JBoss ad MySQL, MySQL ,  addo o HP’ HP ’s OpeVew ad SerceSer ceguard. HP offers cusomers demy demy for ay poeal poeal legal rsks rsk s ha s ope source producs mgh cur. c ur. Sascs dcae ha HP s he larges Lux suppler, alhough  mus be recogzed ha Lux oles hrd pares: • Red Ha ad Suse  he busess marke; • Deba for embedded sysems; ad • Madrake for CAD eromes.

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Figure 3.5: Open Source Reference architecture from HP

HP was he firs o sad as a guaraor agas he legal rsks of ope source; hey offer demy  he ee of loss. For he Red Ha commercal erso, HP ssues s ow cerficae of guaraee o demfy cusomers agas poeal rsks. As we hae already see, free sofware mgh come wh a prce ag f  cludes rsk coerage. Ayoe who hks ha eeryhg from HP mus be freely aalable s adsed o brefly cosul he 2004 aual repor, whch saes: “We rely upon patent, copyright, trademark and trade secret laws in the United States and similar laws in other countries, and agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations. Our revenue, cost of sales, and expenses may suffer if we cannot continue to license or enforce the intellectual property rights on which our business depends or if third parties assert that we violate their intellectual property rights.”

3.8 Sun produces its own hardware and software platforms, competes with Linux, and is pro-open source

Su produces sofw sofware are ad hardware bu s much smaller smal ler ha ha  HP or IBM. IBM . Te compay made a sarlg moe  ope-sourcg s operag sysem.


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Now Solaris  is completely FREE! FREE! Now you can use the Solaris 10 Operating System at home or at work – without paying a license fee. Download the Solaris 10 OS today – FREE – when you register your system (as part of the download or by going through the registration portion of the download) you will receive an Entitlement Document, which grants you unlimited rights to use Solaris-registered machines. Sun offers this new no-cost licensing program for all use – even commercial use, even on multi-processor machines. In addition to the free Solaris 10 OS , OS , you’ll also find our Java Enterprise System Software downloads available to you free to evaluate. est drive this new and innovative product that is changing the face of the enterprise software industry.

Te OpeSolars commuy ow umbers 11,000 members, of whom oly 1,000 are o Su’s Su’s payroll. Edely E dely,, hs h s moe could also be b e see as a way of reducg deelopme deelopme coss. Why does a compay ge away a ew operag operag sysem  whch wh ch  has esed a esmaed US$500 US $500 mllo  rece years? Ta’s o small chage. Ts gf represes jus uder 5 perce of Su’s US $11.2 bllo reeue for he 2004 fiscal year. Bu of course here s a uderlyg reaso for such geerosy. Reeues coue o lag behd whle Lux marches seadly o, alhough Su explas s aco  erms of he  he eed eed o be more oae. Ts lk bewee ope source ad oao s deeply rooed  corporae sraegy. Ro Goldma ad Rchard Gabrel, wo researchers a he Su Mcrosysems Laboraores Laboraores  Calfora, Cal fora, were o acg ou of he blue whe hey wroe he book Innovation Happens Elsewhere: Open Source Source as Business Strategy.

Figure 3.6: Te book written writ ten by Ron Goldman and Richard Gabriel

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I hs book, he Su researchers make a arde plea for greaer use of kowledge from ousde of he compay: “It’s a plain fact: regardless of how smart, creative, and innovative your organization is, there are more smart, creative, and innovative people outside your organization than inside. Open source offers the possibility of bringing more innovation into your business by building a creative community that reaches beyond the barriers of the business. Te key is developing a web-driven community where new types of collaboration and creativity can flourish.” Ron Goldman and Richard Gabriel, 2005 8

A press release release of Jauar Jauaryy 25, 2005, whch explas expla s why Solars was opesourced, emphaszes feedback from egeers. I makg Solars ope source, Su expecs ha egeers wll w ll ga deeper sgh o he produc ad ha ew opporues wll arse for deelopers, cusomers ad parers. “I’s he commuy, supd!” s he poso ha Mar Fk adops  hs capacy as Lux VP a HP. HP. I has ceraly o bee a decso whou rsk. Oe of he commeares o Su’s aco was ha he compay should hae doe doe hs h s much sooer. sooer. Why W hy hae hey ge g e Lux such a lead, oly o hae o play cach up? Te reaso les  he fac ha ope-sourcg a pece of sofware requres a grea deal of preparao. I ook Su see years o do eeryhg ha was ecessary. Solaris is going open, but preparations took seven years . Frs of all, he legal s ad ous were horoughly examed. Makg a

produc ope source s oe hg, bu hey had o be absoluely sure ha all of he code beg released was acually Su propery. Oherwse, Su ad s cusomers could become eagled  roublesome legal dspues. . Su searched for a lcese ha  beleed was suable for Solars. Te OS was ssued uder a Commo Deelopme ad Dsrbuo Lcese (CDDL CDDL). ). Ts CDDL was approed by he Ope Source Iae ( OSI OSI)) ad, as a resul, resu l, acqured he  he label of “offica call ” ope source. . A webse was opeed for he ope source commuy, www.opesolars.org, whch has ow become he rual doma where people sde ad ousde Su ca work o maag he code ad desg oaos. . A goerace srucure sruc ure for OpeSolar OpeSolars s was esablshed  order o momoor he depede characer of Solars, s rue ope source characer. Te mos mpora lk  hs srucure s he Commuy Adsory Board, whch cosss of fie members: wo from deparmes a Su, wo from he ewly made ope source commuy ad oe from he broader ope source moeme.


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I he meda, Su’s moe s see as a drec aack o Lux, perhaps a slghly oer-ambous oe. Su clams superor produc qualy. Ulmaely, Su s ryg o seal a pece of he pe from oher processor plaforms, especally he oe olg Iel x86. Su s esseally mog from a SPARC propreary sraegy o a x86 commody sraegy. As a secod moe, Su has ow also ope-sourced he hardware from s propreary processor. Te UlraSP Ulra SPARC ARC processor was placed pl aced uder a GPL lcese  2006. Su s pullg pull g ou all he sops  order o expad s produc base. Te poe poeal al for Solars Solars o slow dow he growh of Lux wll, wl l, howeer, deped o he compay’s lcesg polcy. Tose who selec Lux wll also auomacally choose he Geeral Publc Lcese, whch also auomacally makes all applcaos of he echology ope source. Some compaes wa o aod hs ral effec. Now, ayoe wag o acqure a hgh-performace ope source sysem bu aod aod hs ral  ral effec has a choce. Te CDDL lcese from Su wll ceraly be more o he ase of I maagers who fear he cosequeces of a GPL . Howeer, he success of ope source s ulmaely deermed by he corbuos of he commuy. commu y. Su’ Su’s choce of a ew lcese, he  he CDDL, CDDL , s rug o crcsm from he commuy. Te depede legal se, www.groklaw. e, has defied he ma po of coeo: he problem s o he fac ha Su has chose s ow lcese bu he compably of hs lcese wh he wdely faored GPL: GPL : “If Sun prefers to carve out a smaller community for itself, it is free to build its own little island, with its own big fence. Te result will be, though, that Linux will continue to develop more quickly and it will bury Sun’s license and its code, because the open, GPL method works better, and the GPL requirement of giving back all modifications results in rapid improvement. Sun is free to cut itself off from that, if it so chooses, but it will reap what it sows. If they imagined that the world would drop the GPL and adopt the CDDL instead, I trust by now they realize that isn’t going to happen.” Groklaw, 20059

Te queso as o wheher Su Su wll w ll hae ay success wh Solars Sola rs ousde s ow famlar faml ar errory err ory also depeds o he suppor suppor from oher marke pares, such as IBM. IBM . Lux s healy suppored by IBM, IBM , Noell, HP ad Red Ha, compaes ha are ready o es. A he same me, HP has a lo of reseraos abou Su’s moe, whch ee moaed Mar Fk o ell he world hs persoal ews by sarg hs ow blog. IBM goes ee furher  aoucg ha  wll wl l o suppor suppor s ow sofware rug o hs ew operag sysem. Reurg o he ope leer o Sam Palmsao of IBM ced earler, earler, Joaha Joaha Schwarz Schwar z sss ha h a he raso from Solars 9 o 10 s chld’s play.

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Open for Business

Ope source occupes occ upes a prome place    Su’s Su’s sraegy, sraeg y, more promprome ha  he case of may compeors. All he same, we hae o ackowledge ha ope source s o he oly sraegc card ha  ha Su has o play, ad o ee he mos mpora oe. I s ow all of weyhree years sce Su prophecal prophecally ly exclamed, excla med, “Te ework s he compuer!” Eery Eeryhg hg s ow  place o make hs come rue. Acual ly ly,, Su does’ wa o deal wh cusomers does’ c usomers abou producs, producs, eher hardware h ardware or sofware. Su belees  serces: uly ul y compug. Accordgly, Accordgly, he ssue s oly wha I mus do ad for wha prce. Prodg hs arey of coeece coeece has bee represeed o he Su Grd sce he sprg spr g of 2006, ad  has bee ge he arace ad easly commucable prce prce of US$1 US$1 per CPU. CPU. Esmaes Es maes are ha he marke ma rke pays a facor of 10 o 100 mes more f compaes uderake I compleely o her ow, jus as compaes a oe me all had her ow power geerao plas. Te I serce ara s a ery serous bu also a heay gamble by Su. Te marke (ha s, cusomers) s beg asked o chage s coduc, a shf ha oles a lo of elemes. Joaha Schwarz says ha he ssue does o ole echology, as mos of he problems are a re of a o-echologcal aure. Ad he oe-dollar-per- CPU ara s a culural chage ha could requre much more me o cach o ha was orgally acpa acpaed. ed. “We can try to make it safe; to make sure you can point out beacons or highlight customers that are saving a lot of money. But ultimately culture changes over generations. It doesn’t necessarily change in an instant.” Jonathan Schwartz, Forbes , 200510

Su’s ope source sraegy has wo mpora corersoes. Oe s Jaa ad he oher s s ow UNIX UNI X operag sysem, Solars. Solar s. For he me beg, Jaa s ad wll rema  Su’s possesso, bu here are persse dscussos abou , prmarly sparked by ogog pressure from IBM , whch s cosaly callg for s release.

innovation n 3.9 Conclusions on open innovatio Reflecg o he firs chaper, we see ha I supplers are gradually geg back o her fee. Te dsrupe effec of ope source s, as of ow, o ye so dramac as o brg he cura dow o “closed” compaes. Howeer, he cura has deed falle o he closed busess model. Isprao for a more cocree form of ope oao  oher secors ca be draw from wha s akg place  he sofware marke. If here s a escapable po o make  cocludg hs chaper ch aper,,  s ha we are surprsed eery eer y day by ew collaboraos ad akeoers olg


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radoal sofware players. Te opporusm of hardware compaes mea ha hey were he firs o fid he way o ope source. Bu we would o loger be asoshed f a sofware ga such as Oracle were o become oe of he bes youg performers o he  he ew ope source sage. Te measures ha such compaes are akg make sese f we exame he eress ha are a sake. “Follow he moey” seres as a good gudele for udersadg wha s happeg o he marke ad why he arous pares are behag  such a way. Ts chaper coas umerous reasos for mplemeg a more ope sraegy. Here s a oerew, eded o spre ad gude effors a mplemeg mpleme g ope oao elsewhere. 1 Not just just ideas but cost reductions have a part to play

Larr y Augus figures ha ope source could resul  a 75 perce reducLarry reduco  markeg marke g ad ader adersg sg coss ad a 50 perce perce sags  R&D. Te ry-ad-buy sales model of ope source led o sags  he markeg budge, ad he moey saed o R&D was haks o parcpao by he commuy  he compay’s research ad deelopme. For example, Su clams ha a commuy of 11,000 dduals parcpaes  he maeace ad oao of Solars, of whom oly 1,000 work a Su. Alhough he ry-adr y-ad-buy buy model wll wl l o be a mmedae  mmedae opo opo for may oher secors,  s ceraly coceable ha markeg coss would decrease f a ope source approach s adoped, as we saw  Chaper 2. Ts could be due o free publcy, lke ha geeraed by ope source shoe maufacurer Joh Flueog, or o cleer c leer ere markeg ad a d word-ofword-ofmouh ader adersg sg  he commuy. Te possbly ha  ha R&D coss ousde he sofware secor could also be reduced s exemplfied by wha s already happeg h appeg a Lego (see Chaper 2). Jus uder 6,000 ew desgs hae bee made by he commuy wh oly lmed help ow ad he from Lego’s ow R&D deparme. Whou such cos beefis, Lego would o lkely hae bee able o ge he ew busess model off he groud. Clearly, sprao from ope source ca sae a compay moey. moey. Furher beefis  adopg he  he produco process process of ope source sofware wll be explored  he followg chaper. 2 Open is good for corporate image image

Supplers ral each oher  ryg o be he “ope source fredles.” IBM ee aped a peace sg, a hear ad a eormous Lux pegu o he sde of a aparme buldg. Ope s good for corporae mage. I reduces he dscoec bewee suppler ad buyer. Afer all, users ake par  he  he produco produco ad specal speca l lceses esure ha boh producer ad cosumer ca clam o be jo owers of he sofware. Sofware compaes hae realzed ha “ope” s good for he mage, ad hey play hs

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card agas each oher. IBM akes eery opporuy o ell Su ha, f  was o become a real ope source compay, compay,  has o make m ake Jaa ope source. Su wres  a a  ope leer ha h a IBM s o a ruly  ruly ope compay compay,, oherwse  would suppor he ope source Solars. Ad o ad o. Supplers wa o become ope source compaes, ad he pose effec o he compay’s compay’s mage s cera ceraly ly oe of he  he reasos why. Adopg ope oao sraeges would eable compaes ousde he sofware secor o ehace her publc mages, oo. Pharmaceucal compaes could, for example, more acely suppor ope research o medces for ropcal dseases. Ad more compaes could make use of he broader commuy commuy of echcal ech cal oao  oaors, rs, as  he  he example of Boeg. I remas o be see wheher such pracces mus ake he form of ope source  order o geerae pose publc mages. I he sofware secor, Mcrosof s sll o he defese, a leas parly because he lceses behd s commuy-source ae are o ruly ope source lceses. Howeer, he aure of hese lceses s o so well kow ousde he sofware secor, ad he esablshme of a commuy (such as Boeg’s Boe g’s World World Desg Desg  eam) eam) may,  self, s elf, be b e suffice o creae c reae a pose sp. 3 Success primarily comes from the combination of internal and external external knowledge

Edely, he success of ope oao ress o he combao of radoal closed busess models wh ew araos of ope oao. Remember he able from Phlps  Seco 1.3 abou he esseal quales of ope oao: “R&D by ohers ca prode sgfica sg fica added alue,” ad “We mus profi from he use of our ellecual propery ad we mus use he ellecu ellecual al propery of ohers befig our busess model.” Busess models  he sofware secor are seemgly becomg “boh...ad...” models: boh oag o he bass of R&D doe -house ad makg use of kowledge from exeral commues. I goes whou say sayg g ha compaes are proud proud of her ow dscoerd scoeres, bu “workg” wh w h ohers ad beg “ope” hae become become full-fledged, ful l-fledged, moey-makg opos. Reurg o he able aga, we’e see ha , “Research does o hae o be ours  order for us o profi from .” Bu sofware compaes are ee gog so far as o wllgly doae paes o he commuy. Tey do hs because hey belee  wll w ll ulmaely ul maely eable hem o oba oba  greaer profis from paeed ems. I some cases you mgh ee say, “Research eed o be doe by all of us  order ha we may profi from  fully. ful ly.”” 4 Open source strategies are adaptable to other sectors

We bega hs chaper by lsg see dsce ope source sraeges ha producers use. I would be easy jus o “copy – pase” hese ems o  o he secos of our dscusso dealg wh ope oao. I fac, hs


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sep would be parcularly parcu larly easy for a few of he ope source sraeges. For For sace, “cosulao” abou ope source s oe way o geerae busess, ad cosulao abou ope oao s a sraegy ha could work  oher secors. Smlarly, he opmzao sraegy could be appled ousde he sofware dusry: combg a compay’s compay’s ow prod producs ucs ad deas wh hose comg from f rom he commues would crease alue for he cusomer. Adopg such a sraegy leads us o he essece of ope oao: “No all he cleer people work for us; we mus fid a way o ap o hese oher huma resources.” Te dagers of ay resulg “mdshare hrea” (as defied  he aalyss coduced by Mcrosof  1998) ca,  fac, be parred par red by mplemeg a more ope oao sraegy. Wha Wh a s dfficul o raslae ra slae o oher secors s offerg wo  wo ypes y pes of lceses (a dual-lcesg sraegy ad ere-hosg sraegy), subscrpos ad he embeddg sraegy, whch are raher sofware specfic. 5 What happens if the competition does indeed begin to practice open innovation?

If you hk h k ha h a ope oao s o relea o you, cosder wha  could mea f your compeo does,  fac, mpleme ope oao. Marke ewcomers appear wh ew busess models ad frequely eormous ambos. If commues egaged  oao deelop aroud hese ew marke players, here s sll a queso abou wheher or o a esablshed compay should wa o see whch way he wd s blowg. I ay case, a aco-r aco-reaco eaco has sared  he sofware sof ware secor, secor, as a resul of whch eeryoe has made he leap o ope oao. Ee he bes-kow players  he marke may suddely ad uexpecedly chage her game pla. We oed ha Su had ope-sourced Solars. Gg a large quay of ellecual propery “o he commuy” all a oce ca prode a jump sar he cosequeces of whch are sll ukow. Ts ype y pe of aco s o be expeced precsely precsely from hose hose compaes seekg beer reurs ad sroger, more more dsce dsc e capacy (such as Su  he sofware secor). Ad we also saw ha producers lke HP ad IBM are acg as paros. Tey suppor ope-source commues, gg rse o a ew erplay of compee forces. Paroage wll also ceraly come o play  oher secors ad prode suppor for commues. Ts wll happe as players seek o share  he rewards of a mproed publc mage, m age, as meoed earler. 6 Open innovation can also be bought

Te paroage sraegy used by compaes lke IBM ad HP o suppor ope source commues, has he adaage ha  prodes mmedae ellgecee as o wha he commuy ellgec commuy s dog. Followg ad learg from wha s gog o s ceraly cera ly a moe behd such “beefaco. “ beefaco.”” A

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ee more drasc sep would ole he purchase of a commuy. Ts s perhaps pug hgs a lle oo srogly, bu he acy of a compay such as Oracle could be descrbed as a a  ope source ad commuy commuy buy-. Acqurg Iobase ad possbly oher ope source compaes ca quckly esablsh a lead oer he compeo. Ts example prodes ew ad rewardg sgh o ope oao possbles possbl es  oher secors. Isead of buldg up a commuy o oe’s ow,  s possble o egrae o a already exsg oe. Notes to Chapter 3

. www.dmreew.com/arcle_sub.cfm?arcleId=1040264. . Open Source urns Strategic, Noember 2005, www.cosgh.com/ar-

cle2/0,1397,1892140,00.asp?kc=crss02129x1k0000534. . “Ope Source’s New Froers,” BusinessWeek, February 6, 2006. . Iereews.com, Open Source a Driving Force for Vo IP Vo IP??, 21/o4/2005, www.ereews.com/xsp/arcle.php/3499536. . Te Hallowee Documes, www.cab.org/~esr/hallowee. . More formao abou Mcrosof’s shared-source program s aalable a ww www.mcrosof.com/r w.mcrosof.com/resources/ esources/sharedsource/ sharedsource/defaul.mspx. defaul.mspx. . “A Ope Leer o Sam Palmsao, CEO IBM Corp.,” Jonathan Schwartz’ blog , Jauary 21, 2005, blogs.su.com/roller/page/joaha?ery=a_ ope_leer_o_sam1. . Goldma, R. & R. Gabrel, Innovation Happens Elsewhere: Open Source as Business Strategy, 2005. . Groklaw, www.groklaw.e/arcle.php?sory=20050205022937327, February 2005. . Saders, ., Sun Chief alks Up the Grid , Forbes.com, February 4, 2005.


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4

What motivates an open source community?

Up to this point, we have been specifically focusing on the business side of open source and open innovation. But these commercial successes depend on social factors, one of the most important of which is motivation. What inspires people to participate in the open source movement? Tis chapter explores this question using research from Berlin, Kiel, Maastricht, and Stanford universities. Cultural and organizational principles are the other elements in the social cluster that lay the groundwork for the success of open source. Tese two form the subject of Chapter 5. Following each chapter, we draw a number of conclusions applicable to open innovation.

Better performances due to “flow”

“Flow” s crucal for he moao of ope source deelopers. I s a sor of esely focused race ha parcpas  ope source projecs ca fall o – lke beg “ he zoe.” Flow occurs  arous suaos, bu he codos ha creae c reae  are preale  ope source projecs. Ts s due o seeral seeral reasos, cludg he fac ha  ha parcpas ca selec her  her ow challeges, he goal s ofe clearer ad he feedback uambguous. Te characersc of a projec wh srog flow s ha people work  a ery coceraed maer, maer, whch ehaces he poeal for good performace. I oher words, he  he codos of ope source produco crease he poeal for excellece. Tey do it to belong somewhere

Jus lke a soccer club, he ope source commuy s a erome where lke-mded people mee each oher. Te sese of belogg, ad he sese of prde  parcpag  a ope source commuy, goes ee so far ha he as majory of he members ew ope source as a defig par par  of her dey. Ad jus as    he case of a soccer club, o eeryoe s o he firs eam; backup players ad coaches are jus as mpora. pora . For example, he more esers here are  a ope source projec, projec, he earler ha bugs wll be deeced. Te speed of deelopme ad he qualy of he sofware produc beefi as a resul.

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It is a part of a “gift economy”

Tere are o oces exchaged or paymes made wh a ope source commuy. commuy. Oe performs a serce ser ce for aoher whou askg ask g ayhg ayh g  reur. A firs, hs h s mgh seem uque, bu hs “gf “gf  ecoomy” behaor beha or s prese whereer people feel comforably a home –  ypcally occurs  famly crcles. Ousders may percee ope source deelopers as alrusc, alrus c, bu parcpas parc pas  ope source projecs projecs mosly fid ha hey ge more from he commuy ha hey hemseles pu . It is not communism

Bl l Gaes oce compared ope source o commusm. Howeer, acapBll als moes uderle uderle ope source oly o a lmed exe, as mos ope sourcers ceraly wa o make moey ad oly a small proporo proclam ay eres  suberg he power of large corporaos. A exremely large proporo say ha her prmary eres s  promog her ow ow  careers. Moreoer, Moreoer,  s ofe people who seek o beefi from a parcular ope source soluo who deoe he greaes amou of work o a projec. Ts symboss of commuy feelg ad self eres has ery lle o do wh commusm.

sof tware does not and can never amount to much 4.11 Open source software 4. Before examg he queso of wha moaes he ope source commuy o do wha hey do,  would pu hgs  perspece perspec e o cosder he acual resuls of hese effors. Afer all, wha kd of qualy ca be expeced of sofware creaed hrough formal ad upad collaborao wh wh  loosely defied ole commues? Coe Coeoal oal wsdom w sdom s ha formal ad upad labor ca’ produce good producs, ad he ephemeral aure of a ole commuy oly creases he coco ha he producs cao be worhy wor hy.. Of course, ope source sofware deelopme akes place far ousde he scope of he aerage produc deeloper, seller, markeer, admsraor ad orgazaoal board member. Tey ceraly hae beer hgs o do ha fuss abou ope source sofware. sofware. Whle W hle complg compl g research for hs book, he auhors repeaedly heard I maagers say ha hey had preously regarded ope source as more of a problem ha a soluo. I sared as a loosely orgazed orga zed ad upad ole ope source commuy, commuy, orgally suppored by ery moaed expers preoccuped wh sadardzao, frasrucural ad archecural ssues. Bu s mpac ca

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hardly be oersaed. Should’ Should’ hs h s prese a reaso o o ake ope source more serously? o llusrae, l lusrae, we wll prode fie examples of challeges chal leges ha mgh o ge he aerage commercal user of formao sysems pause for hough, bu  sofware crcles hey are cosdered o be fudameal. Ope source commues hae played a crucal role  rece years  fidg soluos o hese challeges, soluos ha hae bee subsequely adoped hroughou he I secor. Operating systems have become too complicated over time. Repeaedly, modficaos hae bee made ad fucoaly added. Te moolhc srucure ad all he updaes hae resuled  a exrcably eagled mass of spaghe programmg ha hreaes o sk uder he wegh of s ow complexy, wh regular sysem crashes beg he eable bu also uaccepable resul. Te ea soluo propagaed by he ope source commuy s a clear srucure of a well-defied kerel (mcrokerel) coag he basc fucoaly surrouded by drer modules offerg addoal fucoaly. Te interests of commercial companies prevent the creation of a truly open platform that anyone can add to and improve. Bu he success of he ere s esseally arbuable o relable, secure ope-sadard sofware, such as he webserer from he Apache ope source projec. I s ulkely ha hs success would hae occurred f he frasrucure had remaed  he hads of commercal orgazaos. In many situations, the excessive functionality of commercial software stands st ands in i n the way of effi e fficient and a nd effective effect ive use. I such cases, he lmed fucoaly of a ope source daabase such as MySQL , for example, prodes a ousadg alerae. I s such a good alerae,  fac, ha commercal sofware compaes are ow also makg smple roducory ersos of her sofware producs aalable, some ee for free. Te transparency of the internet is impaired by web browsers that withdraw from the open standards of the World Wide Web Consortium (W3C). Alhough he deelopme of sadards has falle behd he desred rae of oao, he alue of sadardzao remas udmshed. Te populary of he Mozlla Frefox ope source browser, whch uses clear erfaces o ercoec wh he uderlyg operag sysem ad whch s erely based o ope sadards, cosues a sgfica coueralg force o challege commercal corporae eress. Te re-use of programming code has, up to now, proved largely illusory, although putting such an ideal into practice would certainly turn the t he productivit productivityy of the I world up a notch. Ope source programmg eromes such as he PHP ad Perl scrpg lag uages, as well as Eclpse (for WebSphere) ad MONO (he ope source couerpar o .NE NE), ), hae eormously ecouraged sadardzao ad he prolfera-

4 • What motivates motivates an open source community?

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o of bs of programmg code. Parly because of hs, re-use has ceraly ake off  ope source commues. Te ope source commuy has acually corbued soluos o such mpora challeges cha lleges as complexy, applcao of ope sadards, excesse fucoaly, damage o opeess due o commercal eress ad he poeal for re-use. Tese soluos are ow geerally recogzed as “bes pracces”  he I dusry. Te ceaseless effors of a umber of ope sofware deelopers are resposble for hese successes. Tey ow recee srog suppor suppor from large l arge I compaes such as HP, HP, IBM ad Su. Ee orgazaos lke Mcrosof ad a d Oracle, whose marke poso had oce sulaed hem  hem from cocers abou ope source deelopme, ow see he alue  . We all kow k ow he mporace of oercomg oercomg al  al prejudces ad deferrg r g judgeme ul suffi su ffice formao for mao s aal aa lable. able. Edely, Ede ly, he orgall objecos cocerg orga cocerg he  he dubous dubous qualy qual y ad couy of ope source sofware hae proe ufouded. Furher sgh has show ha he qualy ad couy are precsely some of he greaes acheemes of he ope source sofware commuy, alhough perhaps hese acheeach eemes me s go oerlooked because he commuy self ow akes a kes hem for graed.

4.2 Hacking open source and the passion of the individual Ope source deelopers are ruly hard a work. No oly are hey producg aluable sofware, bu hey also frequely demosrae a capacy o come up wh approprae soluos o fudameal I problems. Ts makes he  he queso abou wha moaes moaes he ope source commuy o do wha  does all he more rgug. Varous uerses (Maasrch, Saford ad Kel) coduc research sde he ope source commuy. Workg Wo rkg o ope source projecs,  seems, smply makes parcpas feel good. I produces a feelg of depedece, ad of dog meagful, creae work. Ts colourful ouburs by Mgs Paraz o he ere pas a porra of a aerage ope source sofware deoee: “I’m supposed to be a techie, but I’m not into games. I’m not into gadgets. And I’m not into tweaking hardware. Instead, I spend too much time playing with software – using, configuring, and coding. When I’m not hacking on work, I explore in P2P (Gnutella and Bit Bitorrent orrent), ), social networks (like blogs and Friendster), and other odds and ends that fascinate me. [...] I dream that one day, I can write open source software the whole day, just for self-fulfillment and without commercial pressure. o achieve that... let me get back to work.” Migs Paraz, 20021

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Paraz fis he  he profile of a perso who l lkes kes o play wh hs h s faore oy. Bu games, gadges ad hardware do o appeal o hm a all; expermeg wh peer-o-peer sofware ad wh a socal lfe ole – ha’s hs hg. Ad  s hs dream o hae, a some po, eough me o compleely deoe hmself o wrg ope source sofware. Paraz mus ceraly hae eared eough eough moey o do ha. Paraz s a lkeable l keable “youg researchresearcher”: he prooype of he dgal sorcerer’s appreces who currely freque ope sofware forums que foru ms  droes. I hs  hs way, Mgs Paraz s far from he ele of ope source gurus, gur us, such as Jaso Huer of he Apache eam. A mos, Paraz s  s a “ace user.”

Community managers Project managers Core developers Developers Active users Passive users/observers

Figure 4.1: Various roles in the open source software soft ware community community

Te majory of he ope source guys (females make up oly 2 perce of he commuy) are srkgly moaed  her work ad ca be characerzed as go-geers. Tey ejoy braeasers ad ca search for bugs ul hey  hey drop. Kazushge Kazu shge Goo s udoubedly a good example of such a bra-wser bra-w ser ype. y pe. He bega by desg deas for a faser compu compuer er whle commug o work, ad eded up workg a a uersy  exas  order o coer hs deas o realy. Goo pluged o he ques for a beer way o sole complex lear equaos. Hs esgaos resuled  hs Basc Lear Algebra Subroues: hey allowcompuer processors o perform calculaos calc ulaos faser. I fac, Goo augh compuer compuer archecs a aluable lesso: he demosraed ha her desgs could be profoudly opmzed, ad ha  was hgh me o smlarly opmze her hardware. Te sory of Goo bega  1994 wh he purchase of a Alpha processor worksao from Dgal Equpme Corporao ha he eeded for hs work a he me. Te slowess of he mache surprsed hm. He esgaed he problem ad ulmaely succeeded  obag 78 perce of he heorecal peak performace of he Alpha A lpha processor, processor, sead of he orgal 44 perce, by usg ew subroues. Goo foud he ecessary formao requred o achee hs resul o a Lux-for-he-Alpha-chp malg ls. Durg hs daly commue, he worked seadly o hs ew


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ocao ad ofe coued o  hrough he eeg ul mdgh. Was hs a pushme? No a all: “I dd  o relax.” 2 Laer, Goo was able o coer hs specal hobby o hs work a a uersy  Aus, exas, where he deoed hmself o he Peum 4 processor. He mproed he performace from 1.5 bllo o 2 bllo calculaos per secod, ou of a heorecal lm of 3 bllo. Of course, Kazushge Goo s a uque pheomeo, bu he fac remas ha he obaed hs kowledge ad sklls jus from he ere. he, as a amaeur, he was able o make mproem  mproemes es ha far exceeded he collece gas of he radoal “expers.” Kazushge Goo s currely workg o a ope source erso of hs Basc Lear Algebra Subroues.

4.3 Who are these open source developers? Sascs from Eas Daa Corporao, a agecy ha specalzes  research o reds  sofware deelopme ad ha s ace  more ha seey coures, dcaes ha h a here are hree mllo ml lo ope source sofware deelopers worldwde. Tey are spread across Amerca, Europe, ad he res of he world. Ts s probably a accurae esmae. Cosderg he umber of regsered parcpas o ere ses such as SourceForgee ad CollabNe Forg Coll abNe, , ’s clear ha  ha mllos ml los are ole  oled. d. SourceForge SourceForge has oer a mllo ml lo regsered parcpas; CollabNe more ha see hudred housad. Addoally, we eed o recogze ha he as majory of he ope source commuy does o program bu repors bugs. Tere are fewer ad fewer real core deelopers: esmaes ary from e housad o hry hr y housad dduals. dduals. I ryg o aswer he queso “Who are he ope source deelopers?” researchers a he echcal Uersy of Berl erewed oer fie housad ope source sofware deelopers  2001. Large-scale research was also uderake a he Uersy of Maasrch ad Saford Uersy. Ts research eables us o defy he key characerscs of ope source sofware deelopers. U Berlin, 2001) Gender ( U 98 of the open source software developers are male 2 are female Age (University of Maastricht, 2002) Te average age of open source software developers is 27 years old More than half of them were active in the community before they were twenty Marital status (University of Maastricht, 2002) 80 are single and childless

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U Berlin, 2001) Education ( U 60 have completed or are engaged in higher education Income (University of Maastricht, 2002) 45 earn less than 2,000 euros per month 16.7 are still students

U Berlin, 2001) Employment ( U 45 earn less than 2,000 euros per month 16.7 are still students Employment ( U U Berlin, 2001) 80 have I-related I-related jobs 20 of open source software developers are paid by a company for their open source work Work time (Stanford University, 2003) 50 work on open source software during working hours 40 do this with the permission of the boss Open source software projects (University of Maastricht, 2002) On average, an open source software developers is involved in 1.5 projects at the same time. An average of 1 day per week is spent on it. If project participation is paid for by a company, over 2 days per week are spent on open source.

Te research a Saford Uersy dcaes ha a large proporo of ope source sofware deelopers are lke Kazushge Goo. Tey crae he (echcal) challege of makg mproemes o wha already exss, whch oles figurg ou how hgs work  he firs place. Alhough here are a large umber of reasos for ace parcpao  a ope source commuy, a fascao wh echology ad how o mproe  s fudameal, whch s llusraed  he followg research o why deelopers ake par  ope source projecs. Why did you choose to participate in [an open source] project? It seemed technically interesting I saw it as a way to become a better programmer I liked the challenge of fixing bugs and problems in existing soft software ware I wanted to find out more about how a particular program worked Stanford University3


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t aboo against making money? 4.4 Is there a taboo Te smple aswer o hs queso s o, bu ha eeds o be qualfied qual fied  a couple of ways. Te ope source commuy commu y s o aderse o moey, bu moey plays a secodary role. Addoally, Addoal ly, here s a small core of people (abou 30 perce) who maly see ope source as a way of suberg (abou suber g he power of large I compaes. Ts may be characerzed as a sruggle agas “bg moey,” bu  s firs of all a sruggle for free ad ope sofware. I ay ee, Bll Gaes regularly equaes ope source wh commusm. For Gaes, he free ad ope source sofware moeme s ceraly a-capals. he moeme’s srucure  he form of “commues” also es comparso wh commusm. I ay case, Mcrosof defies ope source as “o-commercal”  s aual repors, as we meoed  Chaper 3. “No-comme “No-c ommercal rcal”” s ceraly cer aly a subjec of dscusso  he ope source sofware commuy (as well as ousde of ). Nearly 80 perce of ope source deelopers deelopers are of he opo op o ha propreary proprear y deelopers are more eresed  moey ha hey are. Bu ewed  erms of a commercal eerprse, ope source has oceably ougrow ougrow o-commercal saus, s aus, as was show  he preous chaper. Te Europea Uo suggess,  s ur, ha he commercal effors of large (Amerca) I players, such as IBM, IBM , Su ad HP, HP, hae msused he orgall ope source commuy orga commuy ad ha  ha “our (i.e. Europea) ope source sofware s a good ad expese opo for ordary users.” Jesus Vllasae, Head of Sofware echology  he Drecorae-Geeral for he Iformao Commuy, Commuy, goes ee fur furher. her. He He clams cla ms ha he  he Amerca mulaoals hae used/abused used/abused he ope source commuy as a subcoracor. If IBM asks cles wheher hey wa ope source or propreary sofware ad her aswer s ope source, IBM he cocludes, cocludes, “OK “ OK,, you wa IBM’ IBM’s ope source.” source.” Vllasae Vl lasae s of course referrg referr g o he (udersadable) opporu opporusm sm of he large I corporaos. cor poraos. Howeer, Howeer, hs accusg figer s pog less a mulaoals ha  mgh seem. Vllasae was specfically referrg o he ope source commuy whe he sad, a a ope source coferece  Amserdam: “Open-source communities need to take themselves seriously and realize they have made a contribution to themselves and society. From the moment they realize they are part of the evolution of society and try to influence it, we will be moving in the right direction.” Jesus Villasante, Holland Open , June 1, 2005

Gaes calls  commusm, ad Vllasae says ha ope source deelopers allow hemseles o be exploed. Research howeer dcaes ha oly 30 perce of he ope source commuy clams o work o ope

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source  order o lm he power of he large sofware compaes. Te reduco of ope source o he sruggle of commuss aga he esablshed commercal order s herefore oer-exaggeraed. You could jus as easly label he CIOs CIO s of compaes as commuss. Afer all, hey hae bee aempg o cural he power of he large sofware producers for years. Te erm “commusm” s herefore o appropraely appled o hs group of ope source source deelopers. deelopers. If ayhg, ay hg, he  he le of “freedo “ freedom m fighers” would be more approprae. Sll, early a hrd of he ope source deelopers dcae ha hey parcpae because hey wa o crease her career opporues. Ter dealsm s relae. Why do you work on open source? o improve career opportunities o make money o build up a reputation in the OS OS//FS community 2 University of Maastricht

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Research a Saford Uersy 3 also reeals ha “ope” ad “free” are boh see as mpora.  mpora. Ye, as may as 80 perce of ope source deelopers feel ha sofware users hae he rgh o ew he code. A smlar proporo of he commuy also belees ha ayoe should be able o modfy he  he source code. code. o o ss ha, h a,  prcple, all al l sofware should be free would be o go a sep furher. Less ha 40 perce are pushg for hs more exreme poso. Ope source lceses proec he prcples of “free” “ free” ad “ope.” “ope.” Whe asked,  urs ou ha early all ope source deelopers regard hese lceses as proeco for he freedom of he sofware users. I addo, half of he deelopers feel ha he lceses are mpora  order o oba cred for her ow work. As a exeso of hs po, 60 perce cosder lceses o be a guaraee ha ohers cao approprae her work. What are the roles of an open source/free software license? o prevent others from appropriating the soft software ware we’ve created o allow us to create OS/ OS/FS without scaring commercial firms away from using it o give credit to programmers’ work o promote the launching of other OS/ OS /FS programs o protect the freedo freedom m that soft software ware users should have 3 Stanford University


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4.5 Open source developers want to belong to the community “Pleasurable feeling based on human relations generally makes man better; shared joy, pleasure taken together, heightens this feeling; it gives the individual security, makes him better-natured, dissolves distrust and envy.” Friedrich Nietzsche, Human, All oo Human , 18785

More ha “beg opposed o,” “belogg o” plays a mpora role  aswerg he queso why ope source deelopers deelopers do wha hey do. “Belogg o” ad “beg opposed o” are ceraly relaed, bu belogg ad membershp, as  a club, proes more more mpora. Research has h as show ha group g roup feelg becomes sroger sroger as he  he pressure from ousde creases. Terefore, he more ha propreary sofware producers aack ope source, he sroger s roger  could become. “Wag o belog o somehg” somehg” s acual ac ually ly oo weak o express wha s gog o here. akg par  he commuy s defied by ope source deelopers as he mos mpora source of her ow dey. Te most important source of my identity is the open source software developer community I wanted to collaborate with like-minded programmers * strongly agree and somewhat agree University of Maastricht4

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Before becomg oled  a seleced group acy, oe asks oeself a few quesos. I a sudy coduced a he Uersy of Kel specfically amed a he group aces of ope source deelopers, hs self errogao boled dow o four quesos deermg he exe o whch people would become oled  such a group. Before participating in a group, people ask the following questions: . Do I believe in the force of this collective? . How will my environment react if I take part in the group? . Do I feel at home in this group? . Does it yield more than it costs? University of Kiel6

Frs, cosderao s ge o he expecao of acheg ache g he collece goal: s he ope source commuy acually capable of makg produc X? Is  gog o work? How lkely s  ha  wll be a wer? Ad do I belee  he  he power of he collece? If he aswers are pose, hs h s s a facor  moao.

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A secod facor cocers he respose of he erome. Is , for example, somehg ha pares, freds ad famly would approe of? Te more pose he reaco from he erome o he fac ha a perso s corbug o a a  ope source commuy, he greaer he moao o parcpae. Trd, deficao wh he group plays a mpora role. A ddual who more srogly defies wh a group s also more srogly moaed o do somehg for . Ayoe who ferely defies wh he Lux kerel ker el group s ely moaed o do somehg somehg for , whle wh le he same perso mgh oly be moderaely moaed o work o Ope Office, for fo r exampl ex ample. e. Fally, he mmedae payoff s also a mpora cosderao: Wll I ge more ou of  ha I pu ? Do I ru ay rsks? Are he people I’m gog o mee worh my me? Tere s some debae as o wheher a comparso bewee workg  a ope source commuy ad workg  eams s approprae. A eam cosss of a relaely small sma ll group g roup of people people who work ogeher, ogeher, whle a ope source commuy operaes as a ework wh hudreds ad somemes ee housads of parcpas. A he mcro leel, relable eamwork ceraly akes place  a ope source commuy. Te projecs  a ope source ework mosly hae a lmed umber of parcpas. Research a he Uersy Uersy of Kel K el aga prodes four fudameal explaaos. I hs case,  oles he queso why are people cled o work  rual eams.6 Tere are four facors: Considerations before participating in a virtual team . o what extent am I attached to the team goals? . Can I in fact make any perceptible difference? Does it matter if I participate? . Am I effective in the team? Is my contribution good enough to bring about a result? . Are the people and the systems with which I will work reliable and trustworthy? University of Kiel6

Workg  rual eams oles rus, belef  yourself ad  he eam, ad rases he  he ssue of wheher your corbuo would be meagful. Noab Noably ly,, a sudy of he parcpa parc pas s  he  he Lux kerel ally al ly dcaed ha rus played hardly ay role. Subseque research reealed ha rus r us was  fac esseal, esseal , bu ha  has become uremarkable because  s prese by defio  he ope source produco model. I s eresg o see ha a cera amou of self-assessme mus precede parcpao  a rual eam. Askg wheher you cosder yourself good eough o make a corbuo ca lead o he realzao


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ha you would be beer off remag o he sdeles. I hs way, a aural mechasm arses o chael your eergy o projecs o whch you feel bes able o corbue. We especally wa our corbuos o be recogzed; we wa o play a meagful role ad o make a dfferece. Ope source deelopers are careful  choosg her projecs. Te commme o he rual eam depeds o a ddual’s ably o defy wh he projec goal. We are able o choose our projecs ad freds bu o our famles, ad Dad Zely, a ahropologs a he Uersy of Ke, compares ope source commues o famles. He fids parallels bewee he maer  whch famly members behae o each oher whe offerg gfs ad he way  whch hs happes  he ope source commuy.7 Bascally, a “blood relaoshp” s a reaso o do somehg for each oher whou askg ourseles wha we mgh ga from .

4.6 In this gift economy, it is a matter of give and take Lfe s a maer of ge ad ake, ad a mpora par of ope source sofware work s based upo hs prcple. You may hae jus go your hads o a b of sofware sofwa re for ex o ohg ad, cosequely, you feel as f you’e bee asssed by sragers. Ad ow you hae he moral oblgao o do he  he same for someoe else. Nearly 80 perce of ope source deelopers say ha hey wa o do somehg  reur for wha hey hae receed. As a user of open source software, I wanted to give something back to the community Stanford University3

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A sudy by he Uersy of Much o he Lux L ux commuy of embedded sofware reeals ha h a he mos mpora reaso for for doag code s ha people regard  as perfecly ormal o ge somehg back o he commuy. Te possbly ha ohers wll he elaborae he code ad re-release  s sad o be a secod mpora reaso. 8 I fac, he gf g f s  s o erely whou self-eres, self-eres, from he ewpo of he ope source sofware deelopers. Mos hae he mpresso ha hey profi more from he work of ohers ha ce  ce ersa. I hs h s way, way, hey are geg a good deal, ee hough hey do  fac ge somehg back o he commuy. Ts s precsely he sregh of he model: may hads make lgh work, ad  s praccally mpossble for a ddual o ge more ha all he ohers pu ogeher.

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I take more than I give I give more than I take University of Maastricht4

56 9

Gg yelds yeld s someh somehg g  reur, alhough he reward s o o ecessarly ay drec fiacal beefi ad s possbly lked o a complex sysem of socal collaborao. I s wha he reowed Frech socologs Perre Bourdeu calls “symbolc capal”: he beefi ha we recee  exchage for a gf.9 Symbolc capal ad real capal are wo pars of he same ecoomy, ecoom y, ad are exchageable. We ca use oe ype y pe of capal o acqure acqu re he oher. For For example, parcpas par cpas  a ope source commuy mgh be hred by a compay as cosulas or could be offered salared employme. I ha case, he symbolc capal acqured by gg yelds real capal  he form of moey or a job. Bu gg ca also produce more drec reurs. Much of he doaed code s lkely lke ly code ha a perso acually acual ly eeds. Research a Saford U3 ersy dcaes ha  eghy perce of he cases here was a specfic eed for he acqured acqu red soluo. Why do you work on an open source project? Te sof software tware being developed would be useful to me I needed to perform tasks that could only be done with modified versions of existing soft software ware I needed to fix bugs in existing soft software ware 3 Stanford University

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Parcpao  ope source projecs edely has a praccal sde. Ideed, he Apache user group fucos for ery praccal reasos: people help each oher mosly because  requres lle effor ad prodes a b of a dsraco. I also prodes useful sgh o he ssues of cocer o users, ad he cos  erms of me s ery small. Apache, whch s used o wo-hrds  wo-hrds of webserers ad s complex pece of sofware by ay a y sadard, does o prode ay suppor for users. Cosequely, a exremely ace sysem for self-help by users has grow. Tey commucae wh each oher o Usee. Apache-usee s a success pro de ay offic cal al suppor. suppor . Half Ha lf of he quesques because Apache does o prode os posed o Usee are aswered wh a day, ad sasfaco wh he qualy qual y of respose s hgh. Wha Wh a duces duces people o sped sped me solg he problems of ohers? o hers? Karm Lakha ad Erc o Hppel coduced research o he moaos of parcpas o he Apache usee. 10 Tey foud ha here were hree mpora reasos for akg par, of whch he mos mpora was he  he desre o keep o op of problems affecg Apache. Apac he. Te pro-


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poro of he me spe by hese people  aswerg quesos o he usee was 2 perce. Te remag 98 perce of her me was spe readg he quesos. Vewed  hs way, he ask of par parcpag cpag urs ur s ou o be a lle less daug ha mgh orgally appear. Idduals oly aswer quesos  her field of experse. exper se. No exra research eeds o be doe. Neerheless, hs sll does o really expla why people parcpae  Apache user suppor. Lakha ad Vo Hppel propose he followg reasos, lsed  order of decreasg mporace: I hae receed asssace cocerg a ssue; I am ow dog someh somehg g  reur. I prode aswers    order o promoe ope sofware. I prode aswers because I lke o do so. I wsh o sreghe my repuao  he commuy. I prode aswers because I am akg a lle break. “I prode aswers because I am a auhory” ad “I prode aswers because  s a par of my job” scored he lowes of he opos.

4.77 Te gift economy is a family affair 4. Te firs sep  a ope source commuy s ofe a gf. You roduce roduce yourself ad make a suggeso abou corbug somehg. Georg o Krogh, Sebasa Sebasa Spaeh ad Karm Lakha Lakha  uderook uderook a exese esgao of ewcomer behaor  ope source commues. 11 Below s oe of he ypcal ewcomer roducory scrps from he sudy. I shows ha a ewcomer may be ucera abou how bes o corbue: “I’ll be happy to look through the code and help out where needed, whether it’s heads-down coding, debugging, writing JavaDoc, or authoring whitepapers. Whatever. Until then, I’ll shut up and just absorb the culture a little bit and get my bearings!” Georg von Krogh, Sebastian Spaeth and Karim Lakhani, 2003 11

By offerg gfs (sofware feaures), a ewcomer ca rapdly become kow o he commuy. Howeer Howeer,, o all al l gfs g fs are appr apprecaed, ecaed, or offered  aswer o a clear eed: “I guess [developer 101  101]] had some thread-pooling code that he’d previously written, which was just lying around, essentially. And he said, ‘Freenet needs thread pooling,’ so he just sort of imported that whole stuff in.”

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Te offered code was probably eded as a (easy) maer of makg freds ad coecg wh he group. I pracce, much work by ope source deelopers does o ed up  he defie erso of he sofware. Terefore, makg ad keepg ope source freds s o always easy. As meoed, Dad Zely compares he culure of he ope source commuy wh ha of close famles. Because parcpas  he ope source commuy are o really famles, he uses he erm “kshp amy” o descrbe he relaoshp oled  a ope source group. 7 Here he muual exchage of gfs s he ceral facor goerg erpersoal relaos. Oher sudes also make he lk l k bewee gf ecoomes ad ope source, such as he sudy by Jürge Bzer ad Wolframm Schrel a he Uersy of Berl. 12 Famly bods are a produc of your brh, bu kshp amy s deeloped hrough eraco. You do’ kow ayoe whe you firs jo a ope source plaform plaform lke l ke SourceForge. SourceForge. Gfs hae a crucal cruca l role o play  he process of eraco, eraco,  whch whc h you lear o kow each oher ad ga oe aoher’s rus. Te geerous exchage of gfs creaes “kshp amy” ad,  he ope source moeme, such gfs coss of sofware code ha dduals d duals hae made hemseles. Ope source sofwa sofware re deelopers buld up relaoshps hrough eraco, buld up rus by meas of gfs ad,  exchage, recee payme  he form of symbolc or somemes real capal. Ecoomc relaos amog close famly members are raher he excepo ha he rule. Normally, pares do o prese her chldre wh blls. Wha pares do for her chldre cao be alued  real capal; hey hae ge her chldre lfe, whch meas ha chldre wll always rema debed o her pares. Coersely, pares also recee somehg  reur from her chldre. I some culures, pares deped o her chldre ch ldre o prode for hem  old age. O he oher had, here  here are also symbolc ways o repay oblgao, ways olg aeo or loe. No bookkeepg eres or profi-ad-loss accous are draw up o eher sde. I a srog famly relaoshp, eeryoe corbues whaeer hey ca ad recees whaeer hey eed. Dog somehg for a famly member s,  self, s ow reward. Bookkeepg s also abse wh he ope source commuy, commuy, alhough oces may ceraly cera ly be se o he ousde world. Ts possbly explas why Red Ha ca sll make moey from prodg Lux serces, alhough “famly members” do o hesae for a mome mome o do wha hey  hey ca for each oher pro boo.


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4.8 Te ultimate kick known as “flow” is the clincher “Flow” s he experece of dog somehg so ejoyable so easly ha you feel you’re you’re floag o ar. a r. Flow s somehg exper expereced eced by paers, moua clmbers, wrers, scess, surgeos, facory workers, ad programmers. People Peop le who experece flow hae oe mpora hg h g  commo: hey become so mmersed  wha hey are dog ha hey lose he sese of me. Eeryhg seems o fall o place by self. Tey eer o a kd of euphorc hgh. I s a kck ha workg o ope source ca also somemes deler. Karm Lakha ad Rober Wolf ceraly ecouered hs flow facor amog he ope source sofware deelopers hey esgaed  her research. Ope source deelopers do, do,  fac, lose rack of me whe hey are workg, ad ca become so addced o hs sese of melessess ha hey use eery free hour o coue her work. Perspectives on Free and Open Source Software I always or very often lose track of time when I am programming 73 Participation in this open source project was my most creative experience, or at least as creative as anything else I have done up to now 61 If I have a free hour, I “alwa “always” ys” or “very often” use it in programming 60 MI Sloan School of Management13

Pleasure plays a eormous role. Ts has bee demosraed  a sudy by Mare Aalbers. Aa lbers.14 She esgaed he moes drg he members of he Bleder ope source source commuy, as well as ohers, o parcpae par cpae  a ope source projec. Te pleasure facor scored he hghes. Mhaly Cskszemhaly s “he exper” o flow. 15 I hs book, Flow: Te Psychology of the Optimal Experience, he repeaedly descrbes he ulmae feelg of blss expereced e xpereced by arous people  dffere d ffere suaos. He defies flow  hese erms: “[Flow means] being completely involved in an activity for its own sake. Te ego falls away. ime flies. Every action, movement, and thought follows inevitably from the previous one, like playing jazz. Your whole being is involved, and you’re using your skills to the utmost.” Mihaly Csikszentmihalyi, 199316

Cskszemhaly has bee head of he Psychology Deparme a he Uersy of Chcago for years. He has bee researchg he opmum experece ha he calls “flow” for more ha hry years. He bega hs esgaos  1967 1967 by askg how creay acually acua lly occurred. occur red. A prespres-

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e, Cskszemhaly s Professor of Psychology a he Peer F. Drucker Graduae School of Maageme a he Uersy of Claremo. Cl aremo. Te kck ha we somemes experece whe dog hgs ges us,  a cera sese, a feelg of blss. We forge he world aroud us ad feel happy ad coe. I aoher sese, we are fully egaged. Ad  s  such momes momes ha h a we deler a op performace. Or, as Cskszemhay Cskszemh ay says, “You’re “You’re usg your skl sk lls ls o he  he umos.” Flow makes work pleasant

. . . . . . .

Cskszemhaly makes  clear ha flow occurs parcularly  people who,  a sese, compee wh hemseles. I hs book he descrbes a youg ma amed Rco Medell who worked o a assembly le. Assembly-le work s farly borg, bu Rco was able o make he work ejoyable for years. He made hs ask o a Olympc challege by coually ryg r yg o break hs h s persoal persoal record. He desed a specal way o carry hs ools ad kew precsely whch moemes he had o make. He became celebraed by hs boss ad co-workers, bu ha was o so mpor mpora o Rco. He dd  prmarly for hmself, for he feelg of coeme “as “as f you were floag. floa g.”” Whe W he he fel ha he had reached he lm l m of hs ables, abl es, Rco bega o ake a few courses. Soo, he wll beg beg  a ew ask wh oher challeges. Flow occurs whe: he acy s challegg chal legg o you; you;  demads demads specfic sklls; skl ls; here s a clear goal ha you wa o achee; you recee uambguous feedback durg performace; he ask requres your full cocerao you feel ha you hae h ae corol oer he suao; ad you are compleely mmersed  wha you are dog. Afer experecg flow, you should become more self-assured. Flow s a mpora facor  rsc moao. Te capacy o experece flow exss  eeryoe, ad may occur whe uderakg uderak g roue asks as well as creae aces. I experecg flow,  s as f we ga corol oer our ow awareess. Ts awareess s ecessary  order o perform, bu  s o auomac. Cskszemhaly pus  as follows: “In fact, it could be argued that chaos, not order, is the natural state of mind. When no external stimulation engages attention [...] thoughts begin to drift randomly. Instead of a pleasant, logical, thread of mental experiences, disconnected ideas appear out of nowhere.” Mihaly Csikszentmihalyi, 199316


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Flow stimulates the learning process

Flow o oly makes work more ejoyable,  also eables us o become beer a wha we do. Flow cosues he core of he learg process. Ts learg process akes place  he erplay bewee boredom ad oo grea a challege. Here we exame he example of Alex, ad how a begg es player deals wh hs eso (see Fgure 4.2). Alex s  s learg o play es. I he begg beg g (A1), he could do ohohg a all. all . He coceraes coceraes o oly oe hg: geg ge g he ball bal l oer he e. Whe Alex keeps a  for a whle ad hgs beg o mproe, he expereces hs firs b of es flow. Howeer, he surge quckly eds as Alex becomes beer. beer. Te followg phase s boredom (A2) (A 2).. He wll wl l hae o fid a bgger challege (for example, a oppoe) o deelop from A2 o A4 ad experece flow aga. High Anxiety

Flow channel

Challenges

A3

A4

A1

A2 Boredom

Low Low

High Skills

Figure 4.2: Te flow Alex experienced

Te oher possbly s ha Alex mgh ecouer someoe who plays es ery well, ad come o udersad ha playg es a a hgh leel would be que a ask for hm. He he eers o A3. Ts eso, up o ad cludg sraghforward fear (of falure), could cause Alex o qu es. Tere s oly oe hg o do: fid a oppoe agas whom he ca w. Alex he reurs o a ew sae of blss, bu ow a a hgher skll leel (A4). (A4). Te search for flow dres us seadly o o eer hgher ad more complex skll leels. We seer our houghs ad choose aces ha, a he me, corbue o acheg flow. Te feelg of flow ha we experece oly ges us a glmpse o he qualy of he sklls oled. Someoe could hae produced a errble

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pag or a worhless b of program code ad sll hae expereced flow. Boh amaeurs ad professoal professoalss experece exper ece flow. flow. Flow s lked o he frame of md eablg us o cocerae o he umos o a sgle ask. I smulaes our capacy o “creae” whle balacg boredom ad fear. Ts moaes us o lear ew hgs, furher ehacg our capacy o experece exper ece flow. flow. I a sudy s udy coduced coduced a he Uersy of Maasrch, Maasr ch, he “desre o lear” was also defied as a mpora moao  workg o ope source. For what reason(s) do you go on with developing and/or distributing OS/ OS/FS FS?? o learn and develop new skills 71 o share my knowledge and skills 67 4 University of Maastricht

Karm Lakha, he ma behd he ope source research performed a MI,, regards workg o ope source sofware prmarly as accepg MI compeo. I hs ew, ope source s all abou exreme compee challeges. I a coersao wh he auhors of hs book he expressed hs dea as follows: “Programming may be compared to driving a car. Many people can drive, but do not venture beyond b eyond normal no rmal traffi tr affic governed governe d by its signs si gns,, stop lights li ghts and traffi tr affic police. Most programmers never do anything more than such everyday driving. ruly seasoned open source developers belong to another category. Tey are such good drivers that they like to challenge themselves in what could be described as Formula 1 races. Without any additional rules, they just drive as fast as they can and try to be the first to cross the finish line.” Karim Lakhani, 2004

Wha dres he ope source deeloper, as Lakha cocsely elucdaes, s he same hg ha dres Rco he facory worker ad Alex he es player o o hgher leels of performace. akg o he challege of compeg wh ohers o hers or wh yourself s wha makes ma kes workg o ope source source ejoyable. ejo yable. Drg yourself o he  he exreme whou he lmaos of rules ad regulaos s he esseal hrll. A ay parcular leel of performace, here s pleasure ad a assocaed feelg of success, whch s exacly wha smulaes he learg process. As a resul, learg ad compeo are ofe a good combao. Jaso Huser, oe of he mos mpora people behd beh d he success of he reowed Apache ope source serer sofware, says ha compeo s esseal  creag he wll o work o ope source sofware. I “Ope Source from he Isde,” a preseao ha he gae a he Palo Alo Research Ceer o Ocober


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31, 2004, he pu  succcly ad drecly: drec ly: “Ope source sofware deelopme rus o exreme ex reme compeo.” compeo.”

4.9 4. 9 Why open source is a rush Oe of he mos appealg feaures feau res of ope source s he fac ha  ha people ca choose her ow work. Image  your ow workplace beg allowed al lowed o gore he upleasa jobs ad ackle oly he hgs ha you lke. Lkely your producy would crease by leaps ad bouds. I a ope source commuy, hs meas ha here are people who hrow hemseles o cera secury proso prosos s  he  he sofware, whle ohers choose o do sofware esg ad o repor he bugs. Accordg o Cskszemhaly, haly , wha people do for for a lg has ha s ohg a all o do wh w h wha arouses her ehusasm. Ts s why  s possble o speak of aleao ad ee a sese of wased me: “Many people feel that the time they spend at work is essentially wasted – they are alienated from it, and the psychic energy invested in the job does nothing to strengthen their self.” Mihaly Csikszentmihalyi, 199015

Eery chal ch allege lege ca produce flow, flow, bu more s produced  a ope source commuy – wheher  focuses o sofware deelopme or somehg else. Te reaso for hs sems from f rom he ably abl y o choose oe’s oe’s ow work, whch s o he case  mos work eromes. Mosly we are old wha o do by someoe someoe hgher up  he herarchy herarc hy.. I sofware sofwa re compaes, compaes, hs h s s a perpeual opc of dscusso: do we hae he rgh perso dog he rgh ask? Of course, eery orgazao beefis from makg he bes possble mach, for he sword s double-edged. People who hae oher ales wll seek ou oher ways, oher hobbes,  order o experece flow. Howeer, ayoe who s hady wh compuer sofware ca ge off he couch, ur off he V, V , ad become he maser of hs ow “blss” by assocag wh a umber of lke-mded people somewhere  ope source lad. We ca program somehg someh g or es somehg, mosly as par of a large whole commuy dded up o smaller groups. If ohg suable s foud, you ca hk up your ow challege, a problem o work o, ad sar a ew projec. Wha’s mpora s fidg a problem ha challeges cha lleges you o brg your kowledge ad experece o a hgher leel – hgher ha wha s requred  he daly work ha you do for your boss, for example. e xample. I ay case, ca se, you are he oe who has he  he say. say. Te rsc moao called “flow” leads o exreme compeo where he mos mpora oppoe s yourself. I ope source projecs,

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he crcal crc al commeary from your fellow fel low players players s crysa crysall clear. You You commucae wh code ad recee code  exchage. Yours s flawed! Ts s beer! Te sofware does or does o work, ad you are cosaly aempg o mproe your “hgh score.” A complme makes you feel good, bu oce you hae foud a challege wh he “hgh score” ha you wsh w sh o achee, ach ee, he he  he ask s  s suffice  self. s elf. Tere s a a  elega word o desgae hs  hs sae: “auoelc.” “auoelc.”

4.10

Conclusion

Ope source reoles aroud he rsc moao of aleed deelopers ad aroud he sgh o wha dres he formao ad fucog of commues. Te lesso  hs chaper s ha workg  commues resuls  creased moao ad hegheed cocerao o he ask beg performed. Parcpas work precsely o aspecs where hey belee hemseles capable of makg useful corbuos. Selfregulao ad moao are srogly lked wh each oher. Ope sourcers feel a srog bod wh her  her ow commuy. commu y. We We could ee say ha hs has eeryhg o do wh self-fulfillme ad lfesyle: he ope source challege  queso becomes he mos mpora eleme of persoal dey. Eery orgazao would loe o hae such a srogly boded ad commed commuy of workers. Geerally, profi ca bes be gleaed from he egageme of a commuy f cosderao s ge o he followg moaoal facors, whch hae all bee rased earler  hs chaper. Eight decisive motivational factors

. . . . . . . .

I rus r us he (ope source) erome. erome. I choose my ow challeges ad asks. I ake par because I defy wh he goals. I work specfically o projecs where my corbuo s percepble ad I ca make a dfferece. I ge back more ha I pu , ad I share my kowledge for hs reaso. If I do hgs  a cleer way, I ca also promoe my ow career. Work Wor kg g o ope source les me experece ex perece flow. I ca lear from he experece, boh as a resul of my ow corbuo ad he reacos of ohers. rus s  s mplc ad, afer a fer a perso cosders how how bes o corbue, parcpao ca self lead o such creased moao ha he perso would prefer o sped eery hour of he day workg o he projec. Ulmaely, self-maageme by meas of flow resuls  a deal learg experece. Ts foreshadows our dscusso  he followg chaper o performg beer  a ope source commuy. Ayoe who was o


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become more more oled  a ope source commuy should ake hs  hs moaoal lesso o hear. I ope source commues, hgh moao ceraly leads o beer performace. Such a srog commme s also desrable  oher sofware commues. Bu compaes are also forms of commuy. Te esseal dfferece les  he ably of people o choose her ow challeges sead of beg compelled o work o somehg by her boss. We do’ hae o skech a oule do’ oul e of a compay o realze ha  ha self-maageme ad moao are prese o a greaer degree    ope source commues. Self-maageme s perhaps easer o achee ac hee ousde compay walls, wall s, bu compaes compaes ha serously employ employ hese prcples erally ca ca  oba grea alue: esely moaed persoel who work coceredly o perform her asks  he bes possble maer. rusg people o do he rgh hg s o always easy. Compaes workg wh a ope commuy mgh hk, h k, “Sce “ Sce hey do  for for ohg ad are o o he payroll, I cao assg hem ay specfic ask.” A (radoal) orgazao s also cosaly  compeo wh oher commues ad lacks ay effece coerce meas of bdg people o he orgazao. Compaes herefore eed o surreder corol ad place some rus  he commuy, or else he members of he commuy mgh up ad moe. Ts s oe ew. Aoher ew s based o he coco ha usg rus as a model resuls  a beer produco mehod (hs po s elaboraed  he followg chaper). Ts coco s a pre-codo for he applcao of he ope oao prcples prcples erally era lly  he orgazao. orgaz ao. If hs coco does o exs, here s o reaso for compaes o do ayhg dfferely. Afer all, people o he payroll hae a corac wh he orgazao ad are “oblged” o perform. Crcs mgh say ha employees also ofe leae orgazaos. Such cases frequely ole brgh mds o he payroll who hae bee placed o he backburer. Tey are o loger geg he bes ou of hemseles. Workg  a ope source maer ca correc hs uder-use, as we saw  he example of oyoa  Chaper 2. We could he speak of ope oao sde he orgazao. Te fac ha moey s o a dry dr y word was demosraed earler  he examples of ope oao  oao.. I some commues, commues, moey smulaes smul aes flow. Moey helps o moae people ee  ope source commues. A par of he ope source commuy s,    fac,  pad employme, ad  s o uusual o use ope source work o adace career prospecs. Howeer, here are sll opporues for orgazaos o ue her ow objeces wh hose of he commuy. Afer all,  s a gf ecoomy, ad moey moey ca be a mpora par of he  he balace of ge ad ake. a ke. Howeer, he followg hree cosderaos are ee more mpora: • he dre ha ca be caused by “flow”; • he alue ha he parcpas oba from parcpag  he commuy; ad

148

Open for Business

• he realzao of a ew persoal dey ha makes lfe more meag-

ful. Notes to Chapter 4

. mgs.paraz.com/w/arches/2003/11/23/a-few-of-my-faore-hgs. . Oe Super Compuer, Te New York imes, 2005, www.h.com/ar-

cles/2005/11/28/busess/geek.php. FLOSS -US US,, Te Free/Libre/Open . Dad, P.A., A. Waerma & S. Arora, FLOSSwww w.saford.edu/group .saford.edu/group/floss-us. /floss-us. Source Software Survey for 2003, 2003, ww Ghosh, h, R.A., R.A ., Free/Libr . Ghos Free/Libree Open Source Software: Survey and Study, Uersy of Maasrch 2002, www.foomcs.l/floss/repor. . www.geoces.com/heeschechael/ma4.hm. Herma , “Moao of Sofware Deelopers . Herel, G., S. Neder & S. Herma,  Ope Source Projecs: A Iere-Based Surey of Corbuors o he Lux Kerel,” Uersy of Kel, Research Policy 32, 2003, pp. 1159-1177. 1159-1177. . Zely, D., “Gf Ecoomes  he Deelopme of Ope Source Sofware: Ahropologcal Ahropologca l Reflecos,” Uersy Uersy of Ke, Research Policy 32, 2003, pp. 1287-1291, opesource.m.edu/papers/rp-zely.pdf. . Hekel. J. & M. s, Munich/ MI Survey: Sur vey: Development Development of Embedded Linux, 2004, opesource.m.edu/papers/hekels.pdf. . l.wkpeda.org/wk/Perre_Bourdeu. . Lakha, K. & E. o Hppel, “How Ope Source Sofware Works: ‘Free’ User-o-User Asssace,” Research Policy 32, 2003, pp. 923-943, opesource.m.edu/papers/lakhaohppelusersuppor.pdf. Spaeh & K. Lakha, L akha, Community,Joinin . Krogh, G. o, S. Spaeh Community,Joining, g, and Specialization in Open Source Software Innovation: A Case Study, MI Sloa workg paper 4413-03, 2003, opesource.m.edu/papers/rp-okroghspaehlakha.pdf. . Bzer, J. & W. Schrel, Te Economics of Intrinsic Motivation in Open Source Software Soft ware Development, Phllp Phll p J.H. Schroder Aarhus School of Busess, 2004, www.dw.de/eglsh/produke/erasaluge/eare2004/ papers/docs/2004-301-V01.pdf. Lakha, , K. & R.G. Wolf, Wolf, Why HackersOpen Source Software Developers Do . Lakha What Tey Do: Understanding Motivation and Effort in Free/Software Projects, MI Sloa School of Maageme, 2005, freesofware.m.edu/papers/lakhawolf.pdf. . Aalbers, M.E., Motivatie voor deelname aan een open source software community, Vrje Uerse Amserdam, Augus 2004, dowload.bleder. org/documeao/bc2004/Mare_Aalbers/MareAalbers.pdf. . Cskszemhaly, M. Flow, the Psychology of Optimal Experience, Harper Pereal, 1990. . Cskszemhaly, M. Te Evolving Self: A Psychology for the Tird Millennium, Harper Pereal, 1993; 2000, www.dalyobjecs.com/Heroes/ MhalyCskszemhaly.asp.


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5

An open source culture culture is better

In this chapter, we will examine the emerging open source culture. When companies want to establish their own open source culture, they use terms like “community source” (Sun and IBM) IBM) or “shared source” (Microsoft). Te fact that proprietary giants like Microsoft and IBM are also striving for an open source culture may seem remarkable, but on second thought, it’s perfectly logical. Open source does not promote anarchy, despite what some people think. Instead, it empowers experts who are quite capable of knowing how they need to work in order to achieve the best results. Terefore, an open source s ource culture culture is a way to employ individual strengths, a high degree of self-determination and an organic form of collaboration within pro ject teams in order to create a better b etter product. We will conclude this chapter with a discussion of the similarities and differences between open source production, traditional software production and the “agile” intermediary form.

Modular structure

Begg o work  a ope source maer meas cosrucg modular forms for ms of sofware. Oherw O herwse, se,  would be dfficul for programmers progra mmers or esers o become oled  projec deelopme. Ts modularzao or compoezao compoezao has bee a mpora ssue  sofware deelopme for half a ceury. I 2005, IBM aouced ha  expecs o crease he rae of sofware deelopme by 30 perce by mplemeg a ope source culure. User-led and open innovation

Workg  a Workg a  ope culure s he curre cu rre red  ope oao oao  he sofware secor. MI Professor Erc o Hppel has bee spred by hs deelopme, dscussg he oo of user-led oao  hs book Vo Hppel promoes hs dea o compaes  Democratizing Innovation. Vo oher secors, such as Phlps, by meas of hs Lead User Coceps. Te boom-up, ope aure of user-led oao s prmarly dreced a “dog” ad has acheed a log ls of successes (from Apache ad Lux o he commuy-source ad shared-source aes of Su, IBM ad Mcrosof), dcag ha  s a effece meas of couerg oerregulao.

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Te radoal maer of sofware deelopme s ewed hese days as beg oerly maaged. ma aged. I leaes lle room for boom-up aes or self-deermao. A ope source culure correcs hs. Ope source s, a a mmum, a mpora ad readly aalable suppleme o radoal sofware produco. Because ddual users, sofware deelopers, large compaes (cludg HP, HP, IBM, IBM, Mcrosof ad Su) ad kowledge sues (cludg he Sofware Egeerg Isue ad he Isue for Sofware Research) are permeaed wh , we ca rghly descrbe hs as a culure of “ope oao.” Our four exhibits

Alhough he  he majory of ope source projecs do o ge ery far, a umber are exremely successful. Ope source deelopme does o dffer from “ordary “ordary”” sofware projecs  hs h s respec. o o make he  he case for he oae aure of ope source, hs chaper wll skech a mage of  based o he followg four elemes: he research of Wal Scacch, he ews of Alsar Al sar Cockbur, he  he sofware deelopme deelopme pracces defied defied for decades wh he Sofware Egeerg Isue, ad he aes o form a ope source culure a IBM, IBM , Mcrosof ad Su. Scacch s drecor of he Isue for Sofware Research a he Uersy of Calfora. Als A lsar ar Cockbur Cockbu r s he mos mpora represeae represeae of he “ag “agle” le” cocep ypcal of a ew geerao of sofware deelopers ad closely relaed o ope source. Open source and agile programming

Ope source source s prmarly prmar ly a culure of he rual r ual orgazao. Tere Tere s a lo of braura  a ope source commuy, propagaed by people who hae eared her spurs  ha commuy; hs s a feaure of merocrac leadershp. Te ambece  whch whc h ope sourcers work mos closely resembles a playg field where players compee o w. Ope source s a srogly compee culure. Regardless of rak or poso, ayoe ca look for asssace from hose who hk hey kow beer. Ad alhough he maer of workg may a firs appear chaoc, closer speco  speco geerally eral ly reeals a a  effice sysem of allocag al locag roles ad resposbles. resposb les. Sll, we mus’ sare bldly a ope source whou also examg oher explcly “f “free” ree” ad “ope “ope”” ypes y pes of produco produco culure. Specfically Specfical ly,, here are wo sysemacally srucured sofware deelopme aras (i.e., exreme ad agle programmg) ha are relaed o largely ureplcaed ope source source pracces. Ts chaper wll w ll coclude wh a comparso of he radoal maer of sofware produco ad he wo ew culures: agle programmg ad ope source.

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5.11 Open source: a culture in which everyone seems to be doing 5. something

“Culture or civilization is that complex whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by man as a member of society.” Edward ylor, Primitive Culture , 18711

Producg somehg  a ope source maer meas, aboe all, workg  a ope source culure. Te culure or he cusoms of a ope source socey are a re dered from people who are srogly moaed o collaborae oer he ere ad do o mce words f hey dsagree abou somehg. Ope source sofware produco works because parcpas ge  her bes sho. I s o hs bass ha people ear her auhory. Te culure of ope source s herefore prmarly focused o he ecourageme of merorous parcpa behaor.

Community managers Project managers Core developers Developers Active users Passive users/observers

Figure 5.1: Te proper role allocation for lean and mean production

Mcrosof ad IBM ow ew ope source culure as somehg ha s absoluely absolu ely ecessary for he effece deelopme of sofwa sofware. re. If we ake a good look a he curre sae of sofware deelopme, we see ha a ope source culure ad sofware deelopme are more srogly errelaed ha was orgally hough. Classcal, healy corolled egeerg culure has log sce los s promece ad s ow frequely supplemeed by culures relaed o ope source, such as exreme ad agle programmg. Ee he professoal sofware egeerg world s beg draw  hs h s dreco, a red show  such arcles as “Iegrag Agle Pracces o A Sofware Egeerg Course.” 2 We beg hs chaper by specfically cosderg ope source culure, ad laer we wll wl l shf shf  our aeo o s relaed offshoos. ogeher, ogeher, hey prode a good oerew of where hgs are headg  he sofware deelopme elopme  dusry. I addo, we wll w ll dscuss he essece of “ope” “ope” ad “free” produco, alog wh he coco – especally a IBM, IBM , Mcro-

5 • An open source culture is better

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sof ad Su – ha a ope source culure s boh feasble ad ecessary sde a orgazao. Te ope source mode of produco seems chaoc, or as Erc Raymod would say,  has a bazaar-lke srucure  whch eeryoe has dffere agedas ad eeryhg seems o occur  a swarm of acy. Ts corass wh he cahedral-buldg syle of radoal sofware deelopdeelopme, where eeryhg appears o occur  a well-plaed maer. Te sadard work o hese corasg produco models, Te Cathedral and the Bazaar, from 1997, s aalable o he ere  full ex. Curously, he bazaar-lke aure of leadg ope source deelopme projecs makes  possble o compare compare hem o ahlls. ahl ls. A firs glace, we see all ypes of creaures rug all oer each oher, whle furher examao reeals ha eeryoe kows “by sc” wha her asks are ad how hey are o be coordaed. coord aed. Gregoro Gregoro Robles, Jua Jula Jul a Merelo ad Jesus M. Gozales-Barahoa publshed a sudy  2005 ha esablshes a aalogy bewee ope source sofware produco (whch hey refer o as “lbre” sofware produco) ad a a coloy. 3 Tey make refereces o he work of he Frech bologs Perre-Paul Grassé, who suded he ways  whch whc h ermes buld ess. Grassé suggess ha h a hey,  effec, beg by “jus” “ jus” geg geg o wh he job. If a cera po  he cosruco s reached, ohers jo  because hey,  oe way or aoher, feel compelled o do so. Grassé called hs “sgmergy,” a erm dered form he Greek words stigma (urge) ad ergon (work). Fgure 5.2 llusraes hs form of self-orgazao. Oe of he rgug quesos rased by such a self-maageme mechasm cocers he maer  whch he socal, echcal ad orgazaoal produco requremes are me: how do people kow what eeds o be doe? Wal Scacch has coduced exese research o hs ssue.4 He comes o he cocluso ha ope source does,  fac, hae smlar ses of requremes o oher modes of produco, bu ha you hae o look ery closely o deec hem. Tey cao be see hrough a ormal admsrae-or admsrae-orgazaoal gazaoal les. Isead, Scacch clams ha he requremes goerg ope source produco emerge as par of a community-building process. I s a socoechologcal process sgaed by he deelopme of socal ad cosruce relaoshps. Iformal socal agreemes are egoaed ad commmes o parcpae  he produco of ope source sofware esured. Te composo of he commuy ad suppore oleme   are esseal aces. Scacch cocludes: “Tus, community building and sustaining participation are essential and recurring activities that enable open software requirements and system implementation to emerge and persist without central corporate authority.” Walt Scacchi, 20054

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Smells

No

No

Finds food ?

Follows pheromone ?

Yes

Yes

Finds food ?

No

Back to nest segregating pheromones

Yes

Back to nest segregating pheromones

Stigmergic algorithm used to find the optimal way to food from the nest

gets Position

knows Project ?

No

No

creates new ?

Yes

Yes

No

Yes

collaborates ?

learns

learns

codes

learns codes

Stigmergic algorithm used to model libre software developers in each turn

Figure 5.2: Building software like an anthill


155

Scacch oes  passg ha ope source culure does o requre ay ceral auhory. Neerheless, here s ceraly a herarchy, alog wh clearly defied roles ad procedures. We wll come back o hs po laer l aer..

Figure 5.3: Animal engineering: engineering: the ultimate smart structure5

Naural forms of sgmergy ad self-maageme mechasms are dscerble  orgacally formed a ess. Te orgac bazaar culure  whch work s performed has bee descrbed exesely by Erc Raymod. R aymod. Hs flueal book coas coas a log ls of lessos ad maxms. 6 We wll meo e of hese lessos here, he oes ha succcly represe he self-orgazaoal prcple of ope source sofware sofwa re produco. Raymod’ Ray mod’ss self-maagem sel f-maageme e lessos ca also al so be udersood  he coex of oao  oao  a “ope” “ope” erome. Nine points for successful successf ul self-management

Eery ry good work of sofware sars by srkg srk g a ere wh a ddual . Ee deeloper. . Whe you lose eres  a program, your las duy o  s o had  oer o a compee successor.

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. If you hae he rgh aude, eresg problems wll fid you. . reag your users as co-deelopers s your eases roue o rapd code .

. . . .

deelopme ad effece debuggg. Ge a large eough base of bea-esers ad co-deelopers, almos eery problem wll be characerzed quckly ad he fix wll be obous o someoe. If you rea your bea-esers as your mos aluable resource, hey wll respod by becomg your mos aluable a luable resource. Te ex bes hg o hag h ag good deas s recogzg recogz g good – ad somesomemes beer – deas from your users. Te mos srkg ad oae soluos ofe come from recogzg ha your cocep of he  he problem was wrog. o sole a eresg problem, sar by fidg a problem ha s eresg o you. Raymod’s ps dcae how self-dreco ca resul  successful produco. I begs wh a persoal respose, whch moaes people o ake aco ad herefore o ae produco. Tere s also a “lock-,” sce oce you beg a program, you cao drop  ul you hae foud someoe o ake  oer. Te oher pos prmarly cocer culag he aude requred o collaborae well wh ohers. Te orgac growh ha  ha we fid  larger ope source source projecs (lke (l ke he Lux kerel, Apache webserer or he PHP scrp laguage) s raslaable o “orgazaos” wh her ow decso-makg srucures ad prcples. Some commues, lke Deba ad Apache, hae formalzed procedures o elec he people allowed o lead projecs or modfy he source code. Oher commues are somewha less democrac ad are ruled by “beeole” dcaorshps, such as Lus oralds’s leadershp of he Lux kerel. Te larger ad more complex he projec, he more mpora he  he procedures ad maageme becomes. becomes.

us ers are involved 5.2 “Merit” is crucial and users Ope source commues are,  geeral, goered as merocraces; he poso of eery eery ddual d dual s lmed l med oly by hs or her ale ad ul uly. y. 7 Ehcy, geder or wealh should,  prcple, play o role. I a merocracy, a perso clmbs he socal ladder by compeg wh ohers ad beag hem. A merocracy merocrac y seems o be a more more effece form of projec maageme ha radoal projec orgazao. 8 Wal Scacch shows ha ope source merocraces somemes dsplay fully maure rual forms of projec maageme. For example, he ope source commuy surroudg Plaeshf, Plaesh f, a ere  ere game, has ha s officers who are resposble for labor marke polcy pol cy (he recrume recr ume of ew ope source employees), employees), for ssug


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press releases, for orgazg ees ad for fidg sposors. Tere s someoe who goers he rules of he game, aoher who corols he musc o he se, ad sll aoher who maages he appearace of he rual r ual world. world. User parcpao  ope source sofware leads o parcularly exese feedback abou expereces wh he sofware, whch subsequely resuls  mproemes. I Chaper 4, we cosdered he facors moag parcpas  ope source deelopme projecs. Some parcpas were moaed by a persoal demad for he mproed sofware. Te specal qualy of hs user-dre oao s s drec relaoshp wh user experece. e xperece. Cosequely, we could speak of a “culure of expeex perece”  hese ope source source commues. commues. May so-called so-cal led “bug fixers” fi xers” are alkers al kers raher ha doers. Tey Tey do o o hemseles “fix” ayhg ayh g  erms of makg a corbuo o he code, bu hey prode feedback or suggesos. geso s. Erc Raymo R aymod d esmaes ha hree-quarers h ree-quarers of he oal ope source secor s comprsed of hs sor of member. 9 Exese ealuao s a clear beefi  deelopg good sofware.

sof tware development 5.3 owards an open source culture in the software sector

Accordg o Su ad IBM  parcular, parcu lar, he delberae roduco of a ope source culure wh her compay walls has o ye bee ge suffice aeo. Boh ew  ew ope source culure cu lure as a a all addo for creasg producy  combao wh he process-oreed sofware egeerg ad agle sofware deelopme propagaed  professoal deelopme crcles. Agle sofware deelopme s a cocep specfically dreced agas he oer-regulao oer-regulao ha s characersc c haracersc of he radoal maer of sofware deelopme. I radoal sofware deelopme, elopm e, also kow k ow as “sofware egeerg,” programmg seems o be pushed o he backgroud. Te ope source recpe agas oerregulao goes goes ee furher, sprg MI Prof Professo essorr Karm Kar m Lakha La kha o formulae he geeral research queso, “Why “W hy do we eed maagers ayway?” A prese, he reowed Sofware Egeerg Isue s also argug for he addo of “agle” pracces, whch largely l argely meas wha’s gog gog o  he ope source commuy. Eablg deelopme professoals “ jus o do her work” appears o be he  he formula for success. success. Su ad IBM calll  “commuy cal “commuy source,” he bass of whch s modular sysem s ysem archecure. Ts s a “dseagled” srucure  whch he compoes are clearly lked ogeher. Modular sysem archecure s he fudameal codo for workg  a ope source maer. Te modulary allows a commuy o hae a arable workforce. A srogly modular source code makes  easy for deelopers o work o . Tey ca focus o ar ous

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pars of he code whou rug he rsk ha a chage or oao wll explcably paralyze he ere sysem as a resul of some obscure eagleme of he program code. Te commuy source approach leads o demosrably fewer errors, as well as faser oao ad mproeme of he program code. Te procedure procedure has proe effece  he Mozlla Mozl la projec as well as ohers. I he case of he Mozlla webbrowser, a grea deal of work was requred  lae 1998 o achee he eeded modulary, whch s dscussed  “Explorg he Srucure of Complex Sofware Desgs: A Emprcal Sudy of Ope Source ad Propreary Code.” 10 Te Mozlla program was so complex ha  preeed hose workg  he ope source commuy from f rom dog ayhg ayh g wh . o pu pu  bluly, bluly,  had o be firs ras rasformed o commuy source,  hs case by he ope source commuy self. Lous Noes ad he Loghor/Wdows Loghor/ Wdows Vsa projec are wo mpora examples ha show he beefis of adopg smlar “commuy source” pracces sde compay walls. IBM’s IBM ’s community source: making software 30 percent faster

I Jue 2005, IBM aouced ha  would, from ha mome o, be supplemeg s radoal sofware deelopme pracces wh commuy source: he offi ca call roduco of a ope source culure culu re hrough11 ou he ere orgazao. Te reasos for hs moe prode clear gudace as o how mpora ope source s for sofware deelopme ad compee sregh. Te erm “commuy source” s o a IBM eo eo;;  had exsed a 12 Su Mcrosysems for years. A he ed of 1999, Su made  kow, hrough spokesma Bll Joy, ha  waed o “commuy-source” as may of s producs as possble.13 I Jue 2005 Doug Hezma, Vce Presde Sraegy ad echology a IBM’s IBM’s Sofware Group, made  clear ha, haks o he purposeful lkg of he pre-exsg bes pracces (for example, he oe olg he Raoal Compay ha was egraed  2003) wh wha he labeled a “ope source culure,” culure,” IBM was able o deelop s sofware sofwa re as much as 30 perce faser. Te goal of IBM’s IBM ’s commuy source program s o promoe rasparecy ad smplficao hrough modularzao ad compoezao. I fac, hs has bee sadard pracce for sofware makers sce he eee-seees, eee-see es, bu Hezma Hezma clams cl ams ha  ha he culao of a ope source culure makes he dfferece. As Hezma descrbes , IBM was o combe src rules r ules ad procedures wh a boom-up approach approach  order o ap o programmers’ poeal for creay ad oao:


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“Tere is a very important role in a software company like IBM for top-down managed code architecture and all that kind of good stuff. But there’s also a tremendous amount of potential innovation that is locked up in the heads of the front-line programmers and we try to liberate that creativity and the innovative potential of all of those people.” Doug Heintzmann, 2005

IBM has a dso of “archecs” ge he ask of examg how he desred modularzao should occur ad whch sysems should be ge prory. As examples, Hezma meos IBM’s IBM ’s Lous Noes ad Mcrosof Wdows. Te old Noes ad Wdows are good examples of he spaghe code ha poses mmese egeerg problems whe makg updaes: here s smply o way of kowg he cosequeces a chage wll hae o he res of he sofware. For Lous Noes, hs problem has ow bee largely resoled by srge compoezao. I 2004, Mcrosof also recogzed a smlar problem  wha was formerly kow as Loghor, so hey cleaed up he Wdows code base ad rebul   modular form. IBM self has complee rus  hs ew ope source RAD (Rapd Applcao Deelopme), Deelopme), whch has a compoe-based oao capacy ad should herefore speed up deelopme by 30 perce. As we poed ou, howeer, hese goals hae bee recogzed as worhy sce he seees. I par, hey hae become more urge due o he seady crease  sofware ad sysem complexy oer he years. We are coug o chase he same goals  he hope ha hey may, someme, ruly be acheed ach eed.. Microsoft and the new architecture of Windows Vista

Jm Allch, he perso resposble for he ex erso of Wdows, belled he ca a Bll Gaes’s house  July 2004. “Ts cao go o,” sad Allch, Allch , referrg o he fac ha, h a, wh Loghor, hey crashed o he problem celg. How dd ha  ha happe? Before Before he PC made s ery, er y, programmg was doe  a mehodcal maer  order o esure ha he large compuers a baks,  goerme ageces ad o scefic projecs would coue o fuco properly. I he eghes, a chage ook place. People People bega o deelop sofware  a “quck ad dry” dr y” maer, ma er, as PC users were eager o pouce o useful ew fucos. Problems could always be soled laer wh a pach, or so  was argued. a rgued. Ts pracce fucf ucos well wel l for a whle, bu here comes a mome whe whe he complexy complex y ad rcacy of he code becomes so problemac ha ay furher deelopme s seseless. Accordg o Allch, Loghor – whch was he code ame for Wdows Vsa a ha me – had reached ha po  he sum-

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mer of 2004. Tere was ohg o do bu choose a safe code base ad work oe sep a a me rebuldg from hs ew foudao. Cosequely, a hsorc decso was made o Augus 26 o “rese” Loghor o a serer erso of Wdows ha was beg deeloped for large compaes. I was also decded o abado he pracce of hag four housad sofware egeers add somehg somehg eery eeg o a ew “buld” “bu ld” of he sysem, afer whch esers would (ofe maually) go hrough he housads of les l es of code o resole problems. wo mpora measures were ake. Frs of all, programmers who produced oo may bugs would be excluded. Secod, Amabh Srasaa ogeher wh Bra Valee had o moor he modularzao of he sysem. Srasaa dd hs by mappg how he Wdows compoes were lked ogeher o a char measurg hree meers by four meers. Te objece was o make  always possble o add or elmae pars of Wdows whou udermg he ere program. I addo, specal ools were deeloped dee loped ha h a he Mcrosof Mc rosof Offi O ffice group has ha s also al so come o deped upo. O July 27, 2005, Mcrosof se Wdows Vsa o a half mllo cusomers  order o hae  esed. Isead of es of housads of bugs, he code ured ou o oly coa a few housad problems. Tgs could sll be beer, beer, bu acheg hs smplfica smplficao o ad flexbly s already a ga sep forward. As a resul of mprog he sysem archecure, a ew buld oly akes a few days. Wdows Vsa remas a eormous Moloch, bu  s a leas a lle easer o work o.

soft ware engineering to agile/open agile/open source software sof tware 5.4 From software development

I s raher srage ha  ook so log o recogze ha modular ad raspare sofware sysems were beer, ad for IBM ad Mcrosof o beg proclamg he mers of a ope source culure – he oe explcly ad he  he oher mplcly. Furhermore, Furhermore, closer examao ex amao reeals ha “sofware egeerg” was orgally orgal ly mea o be somehg somehg erely dffere from raoally maaged ad herarchcally orgazed sofware deelopme deelopme  projecs. projecs. Alsa A lsar r Cockbur, Cockbur , he mos mpora represearepreseae of he ow geerally acceped “agle” hkg, has corbued a grea deal o he sysemac foudao of a ope source culure. Cockbur’ss deas were firs arculaed bur’ arc ulaed  “Te “ Te Cooperae Cooperae Game Mafeso”14 ad cocde wh he proclamao of ope source, boh dag, o cocdeally, from 1998. Boh are srog argumes agas he oer-regulao of sofware egeerg, whch a he me was preeg programmers from geg dow o her real work: wrg compug sofware.


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Cockbur’s maxm saes ha sofware deelopme s o egeerg bu ough o be see as “Cooperae Games of Ieo ad Commucao  Aco.” Makg sofware oles realzg deas  a ecoomc coex ad ca, herefo  herefore, re, be approached as a sysem of compee ad cooperae game suaos. I “Te Ed of Sofware Egeerg ad he Sar of Ecoomc-Cooperae Ecoomc-Cooperae Gamg,” Gam g,”15 Cockbur prodes suppor for hs ew.  ew. He He s a hs bes o hs subjec  a erew er ew recorded  July 2004.16 “In 1968 there was this NAO conference on software engineering. And when you read the preface to that [...] it says: ‘We wanted to come up with a provocative term, and so we chose the term software engineering.’ [...] In fact, what these people were saying is: ‘We don’t like the state that software development is, so we will throw out this word engineering [...] and see what goes from there.’ [...] If you read through their description, they didn’t understand what engineering was.” Alistair Cockburn, 200416

Noably, Cockbur Noably, Cockbur  says ha he  he word “egeerg” “egeerg” was w as a sor of sopgap erm. Ad alhough o oe really udersood wha he word mea, exacly,  was oeheless clear wha had o happe h appe o produce beer sofware. A careful readg of he NAO ex from 1968 reeals ha, ee he, he mporace of brgg br gg people o coac wh each oher was beg proclamed. Te ssues beg dscussed back he are all ems ha Cockbur would ow clude uder he headg of “agle sofware deelopme.” opme .” Cockbur logcally logcal ly cocludes cocludes here s esseally lle dfferece d fferece bewee sofware egeerg he ad agle sofware deelopme ow. “So, [...] there’s a lot of similarity between software development and engineering [...] It’s that they’re they’re both examples of cooperative games g ames of invention and communication.” Alistair Cockburn, 200416

I agle deelopme, he emphass s prmarly o rus ad empowerme – boh wh he deelopme eam ad  he relaoshp wh cles. Agle programmg s prmarly cocered wh he acy of people ad oly secodarly wh processes ad ools. Tere s a srog collaborao wh he eded user of he sofware; coracual egoao s less mpora. Laer  he same erew, Cockbur made he followg saemes abou wha s ruly mpora. Tey are all pos he made  hs Agle Mafeso.14

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“We value: • individuals and interactions over processes and tools; • working software over comprehensive documentation; • customer collaboration over contract negotiation; • and responding to change over following a plan.”

I he laes book by Cockbur, here s a chape ch aperr eled “Crysal Clear Appled: Te See Properes of Rug a Agle Projec.” 17 I descrbes see properes prope res ha  ha he bes deelopme deelopme eams use o keep her projecs ruru g as smoohly as possble possble.. Crysal Cr ysal Clear, desged desged for small deelopm deelopme e eams, s self relaed o he firs hree. All properes, excep for Osmoc Commucao, are applcable o each projec, regardless of s sze. • • • • • • •

Property 1 Frequent Delivery Property 2 Reflective Improvement Property 3 Osmotic Communication Property 4 Personal Safety Property 5 Focus Property 6 Easy Access to Expert Users Property 7 echnical Environment Environment with Automated ests, Configuration Management, and Frequent Integration

I he preously ced erew from 2004, 16 Cockbur explas ha Crysal Clear ad agle deelopme as such are prmarly culural, o procedural, coceps. You eed o look for hese see properes ad see f hey are or are o prese  a projec. Cockbur says, “Whe I s a projec I always ask, ‘Whe ‘W he was he las me  me you delered ay sofware? sofware? Ad whe was he me  me before before ha?’ So he  he firs propery I look for s fref requecy of delery. So freque deleres become he doma propery. Ad he I ask, ‘Do you eer reflec? Do you eer alk abou wha you’re dog ad figure ou how o ge beer?’” Cockbur’s secod queso cocers “reflece mproeme.” He descrbes how askg quesos ad examg procedures ca lead o embeddg he desred agle culure. Persoal secury ad rus are also crucal o sofware deelopme. 18 Such rus ca c a oly be bul up f  f people ca freely adm whe hey do’ do’ kow he aswer, make errors, or lack experse. Such opeess mus be shared ad fosered fosered by eeryoe: eer yoe: oher eam members members as well wel l as yourself. Ts creaes coheso coheso ad rus r us  he  he group. Ta s why • your kuckles are o rapped whe you do o kow he aswer; • you lear he “dosycrases” of eam members ad o loger regard yourself as hreaeed, ee whe emoos ru hgh; ad • you lear o resole hgs ogeher ha you would o hae bee equal o o your ow.


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Ag le deelopme Agle deelopme s ceraly cera ly o a mracle drug, dr ug, bu  has proe s s alue  complex projecs where may chages are oled. Accordg o Semes’s Roma Pchler, Pch ler, experece eaches us ha agle ag le mehods ca crease producy of sofware deelopme eams by a facor of 2 o as much as 30. A Semes, producy was creased fourfold afer oe year. I he ex-o-las seco sec o of hs chaper we offer a comparso of radoal, agle ad ope source sofware deelopme.

Software ware engineering, components and the human dimension 5.5 Soft Te expresso “sofware “sofwa re egeerg” egeer g” was offi ca cally lly used for he firs me  Ocober 1968 a a coferece  Garmsch-Parekrche  Germay.. I he may  he preous seco, seco, we oed ha Alsar Al sar Cockbur Cockbur  regards he roduco of hs erm as a sopgap measure ha has msdreced a lo of people. Alhough he word choce mgh hae bee uforuae, Cockbur sll prased he coferece for s shrewd aalyss ad recommedaos. Oe of he proposals proposal s oled he roduco  roduco of a “compo“compoes dusry.” Ddg sofware o compoes s a obous srucural way o produce relable sofware applcaos by meas of sadardzao ad re-use. We hae kow hs for fory years, bu are oly ow begg o hae ayhg o show for . “My thesis is that the software industry is weakly founded, in part because of the absence of a software components industry. [...] A components industry could be immensely successful.” Douglas McIlroy, Mass Produced Software Components , 1968

As early as 1987, 1987, jus wey  wey years afer af er he aboe-meoed NAO cocoferece o sofware egeerg, Frederck Brooks wroe ha eormous effors were ecessary  order o make small adaces  sofware ad sysem deelopme. Brooks, ogeher wh Gee Amdahl ad Gerr Blauw, had formed he archec eam for he IBM sysem/360. He descrbed he problem by makg a aalogy aa logy wh he  he emergece emergece of moder moder 19 medcal research: “Te first step toward the management of disease was replacement of demon theories and humours theories by the germ theory. Tat very step, the beginning of hope, in itself dashed all hopes of magical solutions. It told workers that progress would be made stepwise, at great effort, and that a persistent, unremitting care would have to be paid to a discipline of cleanliness. So it is with software engineering today.” Frederick Brooks, 1987

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I “No Sler Bulle,” Brooks wared ha, sofar as sofware deelopme was cocered, here s o hope of a echologcal or maageme chage capable of smplf smplfyg yg or mprog producy producy or relably relab ly lke l ke he chages ch ages we’e we’e see  elecrocs elec rocs ad compuer hardware. oward the human dimension of agile software development

Sofware deelopme s sll plagued by projecs exceedg budges ad deadles, whch ofe leae ou he desred fucoaly as well. Howeer, we are exremely busy dsprog he “po” made by Frederck Brooks. We ow kow ha a large umber of problems are arbuable o he excluse use of coeoal mehods ad pracces  he deelopme process. I has become clear ha radoal approaches are o capable of oercomg key challeges, specfically hose of a busess ad echcal aure ha arse  he mddle of projecs. radoal ra doal waerfall waerfa ll sofware-deelopme sof ware-deelopme mehods were desged o aod chaoc “code & fix” suaos. Cosequely, hey esablshed a dscpl dsc pled ed process geared oward makg mak g programm progra mmg g more effice ad resuls more predcable. Te udersadable ambo was o escape udesrable upheaal. Te srog emphass o plag was spred by he physcal egeerg dscples. Bu oo grea a emphass o plag s clearly couerproduce whe chage ad adapao s he orm. I ha case,  s beer o keep eery eer yhg hg as smple as possble. I s frequely argued ha chage has become a ge, because orgazaos ad her processes are ow “chaordc”  aure: osesbly srucured bu acually usable  realy. Agle sofware deelopme wll beer su hese chages ha he radoal “aylora” waerfall echques,  whch he process s lear ad sequeal. Information analysis

Definition study

Functional design

Technical design

Program design

Testing & acceptance

Use

Figure 5.4: Te traditional waterfall was an initial methodological paradigm. It has persisted, in recent decades generating such schemes as Evolution Evolutionary ary Prototyping and Evolutionary Evolutionary Delivery. A good survey of this trend is provided by the article, “Managing “Mana ging the Development of Large L arge Software Soft ware Systems.”20


165

Amog oher hgs, agle deelopme prorzes he mos mpora sofware delerables; work s doe  shor cyclcal cycl cal eraos (me boxes of hree weeks or less) ad ess are coduced couously. Agle sofware deelopme mus be see as he rual ara of “lea produco””  he o  he physcal egeerg realm, whch has a log hsory  Japa, especally a oyoa.

sof tware development in companies companies 5.6 Open source software

.

.

.

.

A ery real warg has ofe bee ssued ha a compay sarg a ope source projec has o reaso o expec ha  wll achee resuls comparable o Apache or Lux. Afer all, s ay -house projec arace eough for deelopers  he ope source commuy? Coersely, he roduco of a ope source culure o a compay’s compay’s sofware sofwa re deelopme orgazao ad/or amog he compay’s compay’s parers par ers s acheable  ay orgazao ha possesses a well-raed sofware deelopme commuy. Forreser Research’s bes pracces repor, “Applyg Ope Source Processes  Corporae Deelopme Orgazaos,” prodes a fiely qualqual fied aswer o he queso ha may sofware deelopme orgazaos ask hemseles: “How ca we use he power of ope source o mproe he sofware deelopme pracce  our compay  erms of oupu fucoaly, fucoal y, qualy, coss, coherece, coherece, etc.?” Forreser’s aswer s bul from he followg e compoes: Deelopme processes processes ca be mproed boom-up. Mos orgazaos approach process mproeme by mplemeg op-dow aes, bu he cosequece cosequece s ha hese do o capure he hears ad a d mds of deelopers. Orgazaoal deelopme ca lear from ope source: • Adop a umber of ope source processes • Adop a umber of agle processes seleced by he ope source commuy • Dsregard a umber of ope source processes Adop hese ope source prcples: pr cples: • eam commucao • allowg users o parcpae • he parcpao model (deelopers hag dffere roles  seeral projecs) Buld a robus srucure for eam commucao: • Make documeao less of a oblgao (use blogs, wks, malglss, CollabNe, etc.) • Make formao a aluable asse • Icrease rasparecy

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Open for Business

. Esure ha users are oled  deelopme:

Reeal deelopme work o eral users • Recru a group of bea-esers . Saff projecs flexbly: • Prode projec workers wh a cera degree of self-deermao self-deerm ao (so hey ca make her ow choces) • Form eams of core ad o-core deelopers • Rase he saus of he people who supply he sofware code ad pay hem accordgly • Correspodgly reduce he emphass o admsrae asks ag le processes ha hae bee proe  ope source projecs: . Adop agle • Release sofware early ad ofe • Formally ole users  deelopme • Eac collece code owershp • Pracce couous code egrao ad employ auomaed esg processes . Ope source follows rules beer ha corporae I does: • Eforce peer code reew • Cosruc a mmal code base ad add ew fucoaly  separae modules Aod d hese  hese ope source processes: . Ao • Ta deelopers char her ow courses • Ta deelopers dere all her moao from rsc facors such as “recogo. “recog o.”” . Te fial corporae recommedaos: • Auomae pars of he documeao process • Ge users oled  deelopme as much as possble • Iole people  mulple projecs • Explore agle echques ha hae bee proe o scale effecely •

Forreser’s asue message s ha op-dow pracces mgh hae bee ecessary  he pas  order o mproe sofware deelopme  orgazaos, bu hs has o bee successful wh programmers hemseles. hemseles. Te aouceme by IBM ha ’s mog oward he commuy source cocep uderles hs fac, ad such a moe s,  effec, precsely wha Forreser Research promoes hrough s aalyses ad recommedaos. Howeer, such pracces are much less aalable o o- I compaes, alhough hey may deelop a grea deal of sofware ad sysems. For hese compaes, Forreser wars agas he wo “pos o aod”  em 9: . Do not allow “too many irons in the fire at the same time.” Alhough ope source deelopers lke o choose her ow challeges,  s almos mpossble o perm such self-seleco  a I deparme. me ad budgearyy resrcos budgear resrc os make such flexble fle xble projec saffi g mpossble.


167

. Do not rely too much on the possibilities of intrinsically motivating

developers in a conventional I department. Wh Wha a I people do s ofe so sble o ed users ha  cao rgger effece rsc moao. Neerheless,  s ceraly worh makg some effor. I s udeable ha culag rsc moao  hose performg eormously complex asks, such as deelopg sofware, represes he mos effece meas of mprog performace.

Forreser herefore herefore argues for a more boom-up approach, as well as cauoary awareess of he pos o aod. How exese ay assocaed problems are depeds upo he creay of he orgazao ad he “agly” of he sofware deelopme, whle he archecoc rasparecy s a ecessary codo for he collaborao of arous dduals  workg o complex source code: “Cosruc a mmal code base ad add ew fucoaly  separae modules.” Clearly, “proe” agly ad sreamled sreaml ed archecural compo compoes es (from Cockbur Cockbur  o IBM) IBM) –  addo o oher o her more commo-sese cosderaos – hae ow become esseal elemes. I shor, a ope source culure s lerally somehg for eeryoe. Proded ha  s appled  a balaced bal aced ad well-cosdered well-cosdered maer,, hs maer h s praccal form of agle sofware sof ware deelopme deelopme ca sere compaes well.

5.77 Differences among traditional, open and agile software 5. development

Forreser makes a dsco bewee sofware egeerg, agle sofware deelopme, ad ope source sofware deelopme (see able 5.1). Te boudares bewee hese hree are ceraly flud, especally owadays. Moreoer,  mgh be preferable o call he agle mehod “commuy source” because  oles he applcao of prcples from he whole culure of ope source. Sll, Forreser’s clary s ceraly useful  quckly makg dscos for he beefi of busess ad I admsraors. raditional Documentation

168

Agile

Documentation is Documentation emphasized as a means is de-emphaof quality control and sized. as a managemen managementt tool.

Open source All development artefacts are globally available, including code and information documentation.

Open for Business

raditional

Agile

Open source

Requirements

Business analysts trans- Users are part of Te developers typilate users’ needs into the team. cally are the users. software requirements.

St affi ng Staffi model

Developers are assigned to a single project.

Developers are assigned to a single project.

Developers typically work on multiple projects at different levels of involvement.

Pee eerr rev evie iew w

Pee eerr rev evie iew w is wi wide dely ly accepted but rarely practiced.

Pair programming institutionalizes some peer review.

Peer review is a necessity and is practiced almost universally.

Release schedules

Large numbers of requirements requirem ents bundled bundle d into fewer, infrequent releases.

Release early early,, release often.

Hierarchy of release types: “nightly,” “development,” and “stable.”

Management

eams are managed from above.

eams are selforganized.

Individual contributors set their own paths.

esting

esting is handled by esting is part of esting and Q&A can Q&A staff, following development. be performed by all development activities. developers.

Distribution of work

Different parts of the codebase are assigned to different people.

Anyone can modify any part of the codebase.

Anyone can modify any part of the codebase, but only committers can make changes chan ges official cial..

Table 5.1: Forrester Research, 200421

Placg agle programmg  he mddle suggess ha  occupes a ermedary poso bewee “radoal” ad “ope source.” Howeer, “agle” s more closely relaed o “ope source” ha o he carcaure of radoall sofware radoa sof ware deelopme preseed preseed by Forreser. Te prcples of self-orgazao ad peer reew, he pracce of olg users, ad he rapd ad freque release of sofware are o be foud  boh agle ad ope source. Tey share a culure ha we ca label  Alsar Cockbur’s erms as “cooperae gamg.” Crcsm s a sadard feaure  hs h s culure, ad ’s somemes somemes ee ecessary  order o eable people o lear abou each oher. Isders  sofware sof ware deparmes


169

ofe reproachfu reproachfully lly dsgu d sgush sh ope source source from agle o he bass of he ucrcal aure of he former; ope source s much less of a reflece acy, ac y, much much less s descrbed, whch s  s precsely he uque characer of ope source deelopme – ad how  mus rema. Furher Fur her research o ope source deelopme could reduce hs polarzao. For example, Wal Scacch has already show  hs research ha ope source has he same requremes requremes as radoal rad oal deelopme bu bu ha hey are erwoe  he ere process of “commuy buldg.” “radoal” ad “ope source” le a oppose eds of he specrum. Ts s because radoal s,  fac, ery precsely elaboraed ad descrbed, whle ope source has, so o speak, fewer ambos  hs respec. Te queso wheher ope source s beer ha radoal remas uaswered, a po ha was made  he roduco o hs chaper. Isead of aswerg hs queso,  s much more produce o look a wha wha s happeg  realy. real y. Ope ad agle culures culu res are o he crease, ad hey compesae for he falgs of radoal mehods, whch are excessely rddled wh oer-regulao. Te sgals are clear. I he fuure, boh exremes wll coue o coerge, ad a sofware pracce ad culure ha balaces radoal, agle ad ope source approaches wll emerge  may orgazaos.

5.8 Conclusion Beer performace  he sofware secor as a resul of ope source culure has,  fac, a lo o do wh he aure of sofware produco. I he examples we’e see from oher secors, he produco process s o always ceer sage. Somemes, people jus wa wa o admre he possblpossb les, or use hem as a markeg su. Howeer, some examples from oher secors would hae h ae eer happeed whou a raspare ad modular cocepo of he work: work: Wkpeda, Wk peda, OhmyNews, bu also Zeropres Z eropresge ge – he “ke surfers” – ad Lego would o exs whou he possbly of workg    a dffere d ffere way. A horough reform reform of sofware maufacurg, maufacur g, such as he commuy source propagaed by IBM or he oe pracced by Lus L us ora oralds lds for years, s ecessary  order o fully coer o a ope source mode of produco. Modular sysem srucures sr ucures hae bee he red  he sofware secor for some me ow. ow. Ts red  red ad he acual acua l acheeme of a ope source culure are ow mergg; op-dow maageme has sered us well for years, bu we hae forgoe abou boom-up aes for far oo log. o o a large la rge exe, hs  hs s  s a geeral maageme ma ageme problem. problem. Mos lkely, publshg publshg wll w ll follow he sofware secor  he coco ha beer performaces are possble wh ope source, so adopg  s herefore desrable. Jus as  he sofware secor, he publshg secor s ecouerg sff compeo from sources ousde ousde he radoal radoa l -

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dusry: blogs ad ole ewspapers are gag  populary. Te sofware secor remas  he lead, bu oher secors are followg  s wake. How rapdly hgs wll urael srogly depeds o he spread of experse ad sklls ousde he radoal core areas of he secor  queso. Te deelopme of ools ad smulao wll also hae a key role o play. Notes to Chapter 5

. ylor, Edward B., Primitive Culture. 2 ols. New York: Harper orchbook,

1871. . collaborao.csc.csu.edu/laure/Papers/csed_AglePracces.pdf. Merelo & J.M. Gozales-Barahoa, Gozales-Bara hoa, Self-organized Develop. Robles, G., J.J. Merelo ment in Libre Software Projects: A Model Based on the Stigmergy Concept , 2005, gsyc.esce.urjc.es/~grex gsyc.esce.urjc.es/~grex//sg sgmergy-robles-merelo-barahoa.pdf. mergy-robles-merelo-barahoa.pdf. . Scacch, W., “Udersadg Requremes for Deelopg Ope Source Sofware Desg,” I EEE Proceedings – Software, 2002, www.cs.uc.edu/ ~wscacch/Papers/New/Udersadg-os-Requremes.pdf. . Loughborough Uersy-led ermes projec, www.sadkgs.co.uk. . Raymod, E.S., Te Cathedral and the Bazaar, erso 3.0, 2000, guw. epfl.ch/arcles/e/cahedralbazaar/cahedral-bazaar.pdf. . l.wkpeda.org/wk/Merocrae. . Mockus, A., R.. Feldg & J.. Herbsleb, wo Case Studies of Open Source Software Development: Apache and Mozilla, 2002, www.research.aayalabs. com/echrepor/alr-2002-003-paper.pdf. . Raymod, E.S., Te Magic Cauldron, 1999, www.cab.org/~esr/wrgs/ magc-cauldro. Struct ure of ComMacCormack rmack A., J. Rusak & C. C . Baldw, Exploring the Structure . MacCo plex Software Designs: An Empirical Study of Open Source and Proprietary Code, Harard Busess School Workg Paper Number 05-016, opesource.m.edu/papers/maccormackrusakbaldw2.pdf. “IBM urs o Ope Source Deelopme,” BetaNews, . Worhgo, D. “IBM Jue 13, 2005, www.beaews.com/arcle/pr/20bm_urs_o_ Ope_Source_Deelopme/1118688437. . www.su.com/commuysource. www. w.c.com/ech/com c.com/ech/compug/9911/19/ pug/9911/19/su.comm.source.dg. su.comm.source.dg. . ww . alsar.cockbur.us/crysal/arcles/cgm/cooperaegamemafeso. hml. . 15. Cockbur, A. “Te Ed of Sofware Egeerg ad he Sar of Ecoomc-Cooperae Gamg,” Com ComSIS SIS Vol 1, No 1, www.comss.fo.bg.ac. yu/Comsspdf/Volume01/IedPapers/AlsarCockbur.pdf. . www.coersaos.com/rascrps/175/rascrp-pr175-1.hml. . Cockbur, A., Crystal Clear: A Human-Powered Methodology for Small eams, 2004. 17, ze ook www.form.com/ ww w.form.com/ar arcles/prerfr cles/prerfredly.asp?p=345009. edly.asp?p=345009. . Ibd. 17,


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. Brooks, F.P.: “No Sler Bulle: Essece ad Accdes of Sofware Eg-

eerg,” IEEE Computer, Aprl Apr l 1987. 1987. . Royce, W.W., “Maagg he Deelopme of Large Sofware Sysems,” Proceedings IEEE WESCO, www.cg.albay.edu/publcaos/repors/surey_of_sysde/surey_of_sysde.pdf. . Bare, L. Applying Open Source Processes in Corporate Development Organizations, Forreser Research, 2004.

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6

How open is the future?

In this chapter, we will sketch three scenarios of an open future. Tese three outline the major dilemma facing companies today: how do they protect their property rights while cashing in as much as possible on open innovation? At the end of this book, we will revisit the most relevant issues concerning concerning open source and open innovation in order to raise the questions, “How open is the future? Is open source only a temporary phenomenon or are we standing on the eve of a paradigm shift in the way that organizations innovate and create value?”

Tis chapter has been written with the assistance of Jason Haislmaier, a lecturer on copyright law at the University of Colorado and a partner in the Intellectual Property Group at the American law firm Holmes Roberts & Owen.

Are we acually able o creae a free ad ope culure where eeryoe forms commues for he purpose of parcpag parc pag  he creao of oaos? Are commues gog o operae o her ow  order o oae ad creae creasg alue  ways resemblg hose foud  he sofware dusry? Or are he legal resrcos so grea ha we wll rema  he geerally closed produco culure ha s ow so famlar o us? Ts s sag he ssue  a raher black ad whe maer. I usg he meaphors of ope ad closed, here s always he queso of how ope s “ope” ad does “closed” mea “shu up gh.” Surely here s a whole rage of ermedae sages bewee he ope ad closed, saes dscerble dscer ble  curre cur re ope ope source pracces? Ulmaely, he dspue oer owershp wll be decse  deermg how ope he fuure wll be; hs bale bewee publc eres ad prae propery s  full swg ad s oucome remas ucera.

6.11 Public versus private 6. We hae grow up wh he dea ha compaes make producs ad cusomers purchase hem. Howeer,  he ope oao model, cusomc usomers are also he co-producers co-producers of hese producs. Ts ges g es rse o he queso of who s he permed o clam owershp of he creaos: he compaes or he cusomers. For ope ope source sofware, hs h s ssue of owershp s resoled by meas of ew lceses esurg ha o oe has ex-

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cluse propery propery rghs o he producs. Tey are  he publc doma ad, o some exe, acually belog o us all. al l. Howeer, Howeer, he same lceses spulae ha owershp of ayhg corbued o he orgal produc s relqushed by he corbuor ad auomacally rasfers o “us all.” Prae propery proper y s cosequely haded oer o he commuy, ad he publc doma grows as a resul. I hs coex, he publc doma s deemed o comprse he kowledge ad oao (especally creae work such as musc, eos, ar ad books)  whch o oe ca hae a specal eres. Eeryoe s eled o use hem, as hey are presumed o be a par of our culural herage. Wha does o belog o he publc doma s prae propery, ad he use of ellecual propery s herefore subjec o resrcos. I he face of wha appears o be a commualzao of owershp, may commercal eerprses hae lauched a couer offese. Tey shore up more more paes paes ad copyrgh copy rgh ha  ha eer. Te legal opporues o acqure such rghs r ghs hae bee expaded  rece years ad eager use has bee made of hem. Whle he opporues for creag alue wh exeral pares ad hrough ope oao are also creasg, may compaess are fallg compae fal lg back o rgorous proecosm proecosm of ellecual ellecua l propery. A collso coll so bewee he proeco of prae propery propery rghs r ghs ad he publc eres appears o be eable.  eable. Terefore Terefore he queso s wheher or o he lawyers are gog o w a cory oer he freedom fighers. Te coflc does o cocer a compay’s rgh o a szeable meal cke. Tere are few people who queso eleme o profi. Ee he mos faacal propoe of he ope moeme, he Free Sofware Foudao, belees ha a compay has a rgh o a reur o s ow R&D. Te real coflc oles  oles much much more praccal barrers. bar rers. We are racg headlog dow a pah leadg o a src sr c “permsso “perm sso culure” culu re” where we we wo’ wo’ be able o ake a sep whou w hou firs checkg c heckg wheher we are fr frgg gg upo someoe’ someoe’ss ellecual propery rghs ad mus reques permsso from all poeal rghs holders. Commo Commo sese appears o hae ashed. Te arral ar ral of he ere ad collaborao wh w h “he commuy” ow force us o reew ad perhaps amed he legal regme we’e creaed. Te coflc ca hae arous oucomes: legal dspues, ew legal cosrucos, collaborao, pracy, or a combao of all of hese. Eery day, we see ha all four poeal oucomes ca occur sde by sde whou w hou ay clear wer emergg. Te ssue s esseally shaped by he permsso culure  whch we fid ourseles. Lawrece Lessg, a professor a he Saford Law School, has made  hs lfe’ l fe’ss work o war us agas aga s he adaces of propreary culure whereby he owershp clams cla ms of commercal commercal compaes are gag a greaer hold o our daly les. Large, mosly Amerca, lobby maches are perpeually busy sakg eer larger clams o he bass of paes ad copyrghs ha cosequely exed he domas of prae corporaos. o escape hs sraglehold, Lessg coceed of he socalled cal led “creae commos,” marked by he sg sead of ©. He creaed

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a “ope” lcese for books, mages, deas ad creae work, modeled o he GPL lcese. Te aswer o he queso “How ope s he fuure?” mus,  he  he ed, come from you. you. Opeess s ceraly cera ly he curre cur re red. red. A mlesoe was reached  he case of United States versus Causby  whch he Amerca cour dsmssed he legal challege of he Causby farm famly. Te Causbys coesed he lawfuless of mlary arcraf flghs oer her lad. Due o he ose, oe hudred ad fify of her chckes flew agas a wall ad ded, forcg he Causbys o ge up her lelhood. lel hood. Te Causbys Causbys argued ha, accordg o exsg ex sg law l aw,,,, he propery of each parcel of lad l ad exeds upward o he  he edge of he uerse. Te cours decded, howeer, ha hs ew was ou of dae ad ha he publc eres  aao prealed oer her prae eres. “It is ancient doctrine that at common law ownership of the land extended to the periphery of the universe – Cujus est solum ejus est usque ad coelum. But that doctrine has no place in the modern world. Te air is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea. o recognize such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim.” United States vs. Causby , 19461

Tere are, says says Lessg, comparable propreary cosrucos cosr ucos ha mpede he free oao of formao ad program codes. I he fuure, a cour could aga make a sudde correco o he balace bewee prae propery ad publc eres, oly hs me he decso mgh o beefi aao bu cural all ellecual propery rghs, makg  slghly easer for compaes ad dduals o egage  ope oao. Should hs h s occur,  would prode a eormous mpeus o oao  geeral ad our prospery  parcul par cular. ar. For For Lawrece Lessg, such a ed o he paralyzg effec of clams o ellecual propery cao come soo eough.

6.2 Neither mine nor yours, but public domain I examg he ope maer of dog busess, our firs ask s, of course, o cosder he dscussos cocerg he legal cosequeces of ope source. Afer all, ope source may be regarded as he focal po of ope oao, he model for oher “ope” deelopmes. Howeer, our prmary cocer  hs chaper s o look beyod he boudares of he ope source sofware doma ad a d pose quesos abou abou he owershp of

6 • How open is the future?

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ope oao  geeral. We are o gog o exame he arous ypes of ope source lceses  ay deal. Ta formao ca be obaed from he ere se of he ope source ae. 2 Furhermore, he Wkpeda ere ecyclopeda s aoher good source for a dscusso of he s ad ous of ope source lceses, 3 ad a praccal gude focused o rsk maageme s proded by Jaso Haslmaer’s arcle “Closg he Ope Source Complace Gap. Gap.””4 Te essece of he dscusso abou ope source lceses oles he queso, “Who ows , ayway?” Ts leads us o speak abou a socal deelopme hag cosequeces far beyod ha of a lcese for a pece of sofware. I ouches o he queso of balacg eress  prae propery wh w h wha we ca assg o he publc doma. Socey’ Socey ’s eres  lmless ejoyme of sofware, musc, wre ex ad eos comes o coflc coflc,, wh creasg  creasg esy, wh corporae eress  earg come. Te ope source world ad,  parcular, he Free Sofware moeme moeme wa o make he  he publc doma as large l arge as possble. Te publc eres  makg mak g free use of program code s forced o compaes compaes  he form of wha we defy as a “ral” form of lcese. Ts meas ha prae propery added o somehg coered by such a lcese s rasformed o publc propery. o expla hs po furher, le’s recosder he example of Joh Flueog ad hs ope source shoes, whch we dscussed  Chaper 2. Joh Flueog s oe of he busessme who hae foud a way o do busess  a more ope maer. Whoeer ss he ope source foowear page o hs webse wll be ed o desg shoes for hs compay. Aasasa  Russa was oe of he people who respoded, ad a Aasasa shoe was,  fac, ulmaely roduced o he marke. Bu who ows hs shoe model? Is Flueog he ower because he has bore he produco ad markeg coss ad added hs ow kowledge abou makg shoes? Is he ower Aasasa, who orgally made he desg ad has rghs o  o he bass of her ellecual propery? Who really real ly cares abou he ellecual ellecua l propery olg hese shoes? shoes? Flueog does’, as he has se he codo ha eery desg wll eer he publc doma. Ayoe A yoe makg a submsso mus agree wh he followg saeme: “Te submitting party understands and agrees that submission of this design to John Fluevog Shoes Ltd. releases the design into the public domain, where it is owned by no one and freely available to all. All claims to compensation in any form are waived.” John Fluevog

Cosequely, Aasasa mus reouce ay Cosequely, ay copyrgh copyr gh ha she orgally orga lly had due o he fac ha she came up wh he desg. Were she he copy-

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rgh ower, she would be able o demad ha ohers wag o make use of her ellecu ellecual al propery firs oba oba  her permsso. I relqushg hs h s rgh by releasg he desg “o “ o he publc doma,” doma,” she esures ha o oe has ay excluse rgh o s use. No ee Joh Flueog, despe beg he perso g he submsso of desgs. Ay oher shoemakers ca smply use he desg o produce her ow ersos of he Aasasa shoes. Flueog s’ worred abou hs possbly, probably because he does’ belee ay oher maufacurer would do ha. Howeer, here are oher busesses ha would be deeply cocered abou such a possbly. Of course, we hae o ackowledge ha he legal lega l cosruco cosruc o of Flueog’s Flueog’s ope produco produ co mehod s far from waergh. Te legal aldy al dy of smply sag ha ayoe submg work auomacally releases hs or her ellecual propery o he publc doma s sll uclear. I early all legal regmes, here coues o be a ower. Flueog’s clam ha he desg s released o he publc doma, “where  s owed by o oe” s o legally bdg ad may o be eforceable. Howeer,  s ceraly possble for ay ower (ad, (a d,  hs  hs case Aasasa, A asasa, he ower ow er of he skeched skeched shoe desg) desg) o relqush her rghs. Jaso Haslmaer makes he followg comparso: “Imagine that you are the owner of a water fountain in the local park. You could decide to permit visitors access to the fountain when they want to have a picnic. At the same time, you could refuse to allow the construction workers working nearby to use the water in their cement mixers, or charge them a fee for doing so. Fundamentally, as the owner of the rights in the property, you can decide to grant or retain any ‘bundle’ of the rights to whomever you want. Te same applies to the software licenses of proprietary manufacturers. Most of the rights are kept for the manufacturer itself and income is received for every bundle that is given away. Alternatively, the owner may retain only a few rights and make a broad contribution of rights to anyone in the software community for little or no fee. In certain cases, he may even do both simultaneously. Tis is how we end up with both proprietary and open source software, respectively.” Jason Haislmaier

Te specficao “release o he commuy” commuy” s  s oe we recogze from he “ope source lcese” of ope source sofware. I ha case, he holder of he ellecual propery specfies he rghs of use. Te ope source ae ess lceses o he bass of he prcples of “opeess.” All he lceses ha ca be used whe oe was o “release” somehg o he commuy are lsed l sed o he webse www.opesource. w ww.opesource.org org .We .We mus keep  md ha uder U.S. law he presumpo s ha compuer sofware cao be doaed o he publc doma, excep  ery arrow crcumsaces.5


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Tere are seeral lceses grouped o wo sgficaly dsc caegores: he lcese roughly ecapsulaed ecapsul aed by he saeme “I’e “I’e made hs, do wh  wha you wll” (uder cera explcly saed codos), ad lceses ha are more fudameal ad make  possble for ayoe o add somehg o he ellecual propery, a mproeme ha s he also released o he commuy. Le’s assume ha Aasasa had ssued her desg uder hs freer ype of lcese, of whch he Geeral Publc Lcese (GPL (GPL)) s a example. Sce a skech s o a pece of sofware, he ex  he lcese s herefore o fully equpped for hese sors of suaos. Howeer, here s also a GPL ha s o eded for sofware bu documes.6 If hs lcese were appled o he Aasasa desg,  would mea ha a coflc would mmedaely arse f he shoe sole was also paeed. pae ed. Afer all, al l, he GPL says says ha eeryh eery hg g you clude  a produc based o hs lcese auomacally comes uder he lcese. Ts s wha we call “ral”: “ra l”: somehg somehg else s “feced” “ feced” wh he  he freedom freedom ha he lcese prescrbes. Secos 7 ad 8 of he GPL (erso 2) dcae ha, f here are oher oblgaos – ad a d a pae pae s such a a  oblgao – he ew produc may o be sold. Now suppose ha Flueog has a pae o a specally desged shoe sole, oe ha forms he bass of he ere produc le. He he has a umber of choces. He could relqush he pae, lke IBM ad oher compaes whose paes were “released o he commuy.” He could sell he shoes  coures where he pae s o ald. Or he could cou ld abado he ere pla. I he case of sofware, IBM has doaed fie hudred paes o he ope source commuy as par of a so-called “pledge.” Arragemes hae bee made so ha eher IBM or ay oher pary ca make ay clam regardg he paes; hey may be used free of ay oblgao. IBM’s  patent pledge IBM’s “IBM hereby commits not to assert any of the 500 U.S. patents listed below, as well as all counterparts of these patents issued in other countries, against the development, use or distribution of Open Source Software. In order to foster innovation and avoid the possibility that a party will take advantage of this pledge and then assert patents or other intellectual property rights of its own against Open Source Software, thereby limiting the freedom of IBM or any other Open Source Software developer to create innovative software programs, the commitment not to assert any of these 500 U.S. patents and all counterparts of these patents issued in other countries is irrevocable except that IBM reserves the right to terminate this patent pledge and commitment only with regard to any party who files a lawsuit asserting patents or other intellectual property rights against Open Source Software.”

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Compuer Assocaes has also made a smlar pledge, 8 bu whe Su Mcrosysems gae 1,600 paes paes o he  he ope source commuy o mark he lauch of he OpeSolars operag sysem, he compay kep he aouceme o a smple saeme.9 Ts resuled  a grea deal of crouceme csm because, whou a explc pledge, here are a umber of uaswered quesos abou he possbly ha Su may,  oe way or aoher, make clams o s ellecual propery a some me  he fuure. Aoher rsk, oe ha Flueog s rug whe he does o proec hmself legally, s he possbly ha Aasasa may hae sole he desg by smply copyg  from a brochure or by seg  o paper afer seeg   a sore. Te rue ower of he ellecual propery could successfully ake Flueog o cour. If he shoe s deeloped by oe perso,  s easy o proec oeself oeself agas hs h s rsk. rsk . Aasasa Aasas a oly eeds o declare ha she hough of he desg herself. Bu f housads of people hae worked o a produc ad  s o loger possble o esablsh who has doe wha, hgs h gs could become slghly more dfficul. For hs reaso, Rchard Sallma asks all he people corbug o “hs” GNU Lux o sae ha hey were he orgal owers of her corbuos ad ha hey wae her owershp rghs. Sll, S ll, ayoe workworkg o he Lux kerel does o make ay declarao ha he code s o sole. Terefore here s a chace ha ohers mgh acually ow pars of he code for a produc hough o belog o  he commuy. Foruaely, here are seeral compaes who are wllg o demfy users agas such clams: HP ad IBM , o ame wo. Furhermore,  has also recely become possble o oba surace agas such rsk by meas of he Ope Source Rsk Maageme program a Lloyd’s. First-ever Open Source Compliance Insurance now available through partnership between London-based Lloyd’s underwriter Kiln, Lloyd’s broker Miller and Open Source Risk Management London and New York – 31 October 2005 – Kiln PLC of London, U.K., a Lloyd’s of London underwriter and Miller Insurance Services Limited (Miller) a Lloyd’s broker, announced today that they will offer a new product called Open Source Compliance Insurance. Press release from Open Source Risk Management, October 31, 2005

Jaso Haslmaer emphaszes he  he fac ha fear s a poor adsor ad ha full complace wh he codos of ope source ca ceraly be acheed. He s aoyed abou he fac ha  ha much aeo  may busess semars s deoed o he rsks of ope source. You oly eed o kow wha you are dog, be aware of he rsks rsk s ad ac appropraely, appropraely, jus as  ay oher busess acy. Ta s ohg ew. Ayoe wshg o pluck he fru fr u of ope source  he echologcal echologca l erome ad ope


179

oao  he busess erome eed oly deal wh he rsks  a prude maer ma er.. Te sores abou he rsks of ope source ca ofe be raced back o he mos mpora legal aco ac o agas ope source: Santa Cruz Operation ( SCO SCO ) versus IBM. A curre accou of hs case ca be foud o www. groklaw.e. I s a dspue abou he owershp of Lux, ad  was summed up by Ebe Mogle, professor a a Columba Law L aw School ad lawyer for he Free Sofware Sofwa re Foudao. SCO versus IBM Trough a number of acquisitions, SCO came to own certain rights in the Unix operating system. When financial problems arose, new CEO Darl McBride decided to increase the revenue from its intellectual property. SCO made it clear to users that it had rights to a part of their software, and that it must be paid for user rights. IBM wanted to put a stop to such claims, which led to a lawsuit. As part of Linux, IBM released some of the source code that A& A&,, the forerunner to SCO , had licensed to IBM for use in their AIX operating system. Tis is the bit of the code over which SCO claims ownership. Moglen disputes the claim that IBM released SCO’s SCO’s property on two grounds. First, SCO has no rights to the code, despite having inherited it. Second, any claim would have to involve a carbon copy of the Unix code, which is not to be found in Linux. Te codes of Unix and Linux bear a poor resemblance to each other. Up to a certain point, it was just a dispute between SCO and IBM. IBM . However, SCO itself was also distributing the Linux program under a General Public License (GPL GPL), ), which in fact says, “Do with it what you will.” According to Moglen, SCO did not really expect to win the case, but was playing another game. SCO sent letters to all the largest companies saying, “If you are using the Linux kernel, you should be purchasing a license from us.” Tat made SCO stock shoot up. Unfortunately, SCO was also shooting itself in its own foot. By demanding money from companies for something that it had made but on which thousands of others had also worked, SCO was exposing itself to innumerable countersuits. In fact, IBM filed a counter claim against SCO due to its contravention of the GPL freedom clause. Te only response that SCO could make to this was to deny the legal validity of the GPL. GPL . Next, Microsoft gave SCO US$10 US$10 million that, according to Moglen, was intended as an inducement to challenge the GPL. GPL . Consequently, SCO’s SCO’s McBride declared that the GPL would ruin the software sector, that it was un-American, and made similar polemical claims. However, in Moglen’s Moglen’s opinion SCO does not have any possible grounds for proceeding against open source. In the most pessimistic scenario, one in which a bit of the Linux code is, in fact, found to be SCO property, the infringing elements could easily and quickly be replaced. Te SCO company has now been transformed from a software company into a company specializing in lawsuits. In December 2003, SCO shares were selling at nearly US$20. US$20. Since Fall 2004, the share price has hovered around $US $ US4. 4.10

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SCO s ryg ry g o uderme he legal foudao of ope source sofware produco, whle makg ma kg a umber of scaremogerg saemes abou abou ope source  geeral:  s a-Amerca, commus ad somehg ha hacks away a he roos of he capals sysem. Despe he hyperbole  such ews, hey clearly esfy o he aee of hkg ha a closed world,  whch he proeco of ellecual propery s a mpor mpora bass for compee sregh, s smply gog o shf o a “ope” world, where eeryhg belogs o eerybody ad eeryoe s free o buld o exsg producs.

“open” under attack att ack 6.3 Permission culture: “open” If we ca belee bel ee pessmss such as Lawrece Lessg, supporers of “ope “ope”” are currely holdg he losg had. Tey are caugh up  a bale amog people  power, large mulaoals ad oher compaes ha ear come from paes o dscoeres ad from oher ways of securg ellecual propery, such as copyrgh ad rademarks. Te legal mplcaos of “ope” go rgh o he hear of “capalsm.” Idusres, goermes, mulaoals, lawyers ad mlas for a ope ad free world are busy workg o he queso of how ellecua l propery ca be legally pu o bed. Ts oles a umber of ssues. Frs, we mus sae ha he ere has made  especally smple o dsrbue bs of dgal formao ad, cosequely, peces of dgal propery  a quck ad easy maer. Flms, ex, musc ad sofware programs moe aroud he world whou he ower earg a ce. Secod,  eeds o be ackowledged ha code s beg geeraed  creasgly greaer quaes. Te ools eablg us o creae dgal producs are more accessble: o oly are hey smpler o use ad qualaely beer, bu also less expese. As a resul, he opporues of “ope” “ope ” produco produco are also al so creasg; produ produco co s becomg dsrbued dsr bued ad s mog ousde compay walls. Te ellecual propery rghs o creay crea y ha  ha has dsparae orgs s also becomg less agble ad so harder for compaes o secure. Fally, we mus recogze ha  s progressely easer o clam ellecual owershp  some regard. Ts creaes barrers for oher dduals ad orgazaos, whch mus firs make agreemes wh owers. For example,  has recely become possble o reques a pae o huma ad ama a mall gees. A prese, 20 perce of gees hae bee paeed. Te mproed efficec cecyy    he Ued Saes S aes Pae Offi O ffice s  s also al so meoed meo ed as aoher reaso for he  he crease  he  he umber of paes; paes;  ow has a sake  ssug as may paes as possble. Ee uerses hae a creasgly sharp eye for he acquso of paes. I he academc secor he pursu of kowledge s creasgly a race for pae proeco, proe co, despe he fac ha  ha free dssemao of kowledg k owledgee remas


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a basc prcple of he scefic commuy. Lode Wys, professor of bochemsry a he Free Uersy Uersy of Berl, also defies hs h s as a dagerous red. I hs ew,  s absoluely absurd for uerses o be cocered abou he umber of paes ha hey are able o acqure. I a erew cluded  he book How Open is the Future Future??11 Wys begs wh a quoe from Joas Salk, who syheszed sy heszed a polo acce  1955. I respose o he queso wheher he was gog o pae hs dscoery, Salk sad, “A pae? pae? Could you pae pae he su?” Salk Sal k regarded hs dscod scoery as somehg for he people, somehg ha was  he publc eres. Begg  1980,  became possble o acqure paes o lg subsaces, ad a erable sampede resuled. I 2006, uerses hold 3,600 paes. I 1965, he oal was oly 95 (see Fgure 6.1). 6.1). 400,000

US patents

300,000 Number 200,000

100,000

Applications

Obtained patents 0 1812

1850

1900

1950

2001 Year

Figure 6.1: Te registration of patents doubled during the internet decade

O he oe had we experece he emergece of a “ope” moeme, or a “ope-source” moeme f you wsh. A he same me howeer he sraegy of compaes ad uerses  geeral remas predomaly “closed.” Te remarkable growh  boh he ope ad closed dreco probably meas ha o dae grea progress s beg be g made o arous leels  may dusral ad scefic areas. Te creased opporues for ope oao hae o led o a reduco  propery proper y proeco. For he sake of coeece, coeece, suppose he umber of paes paes s a key dcaor  dcaor for he closed model ad he growh grow h  he umber of ere users a dcaor of poeal gas for he ope model. I he las la s e years of he weeh  weeh ceury, we saw a doublg  he umber of paes ad,  a lle more ha e years, he ere exceedg a bllo users.

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Figure 6.2: At the beginning of 2006, the number of internet users rose to 1.02 billion

I hs book Free Culture, Lessg explas ex plas ha corporae ellecual propery s domag our culure o a creasg degree. We fid ourseles  a suao where we mus ask permsso eery eer y me we wa o make mak e somehg ew. Lessg, who happes o lea  he dreco of Rchard Sallma’ Sallma ’s Free Sofware Fou Foudao, dao, belees ha  ha he ere suao has goe ou of had, ad ellecual propery clams of compaes hae become erely ouladsh. Wh he arral of he ere, he world has chaged, ad he ew echology makes ma kes  ecessary o amed he law. Te oerly perase culure of permsso was creaed  Amerca  1976 whe a ew Copyright Act replaced he old oe of 1909, ad eeryhg ha was desged ad produced auomacally receed a “copyrgh.” Uder preous ersos of he Copyright Act, obag ad maag copyrgh proeco requred he auhor or ower of he copyrghed work o obsere cera formales ad requremes, cludg oce, publcao publc ao ad depos. Uder Uder he 1976 Copyright Act ad laer amedmes amedmes o , may m ay of hese formales forma les ad requremes were reduced or or elmaed. el maed. As a resul, copyr copyrgh gh proeco ow aaches auomacally o ay work oce he work has bee creaed ad fixed  a agble medum of expresso, ad  s o loger ecessary o apply for copyrgh – whch up ul ha me was rare ayway. We hae see ha Lessg hopes for a legal decso, such as he oe redered  he 1946 case United States versus Causby. O ha occaso, a Amerca cour rafied he ac of Cogress Cogress declarg he “erroral ar colum” aboe a pece of lad o be a publc rgh-of-way, despe s hag bee ewed dfferely  he pas. Lessg refers o hs case o argue ha h a a decso o gra preferece o he publc doma doma  oer prae


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propery s o a-Amerca or commus – que he corary. I promoes he ecoomy ad remoes he barrers o healhy growh. urg o he ere, Lessg argues ha he comparable suao exsg here has o ye moed  he dreco of commo sese. We hae arred a a ourageous sae of affars  whch we mus ask permsso for dog ayhg ad usg ayhg o he ere. We surf o he ere ad creae ew hgs bu, as f we were respassg, mus couously ask permsso from couless rghs holders. Te pae race goes progressely furher ad, as meoed, ee as far as our gees. Lode Wys uses research o breas cacer as a example of wha ca happe whe prae compaes compaes ga ellecual  ellecual owershp of lfe self. Oce Myrad Geecs obaed a pae o gees assocaed wh breas cacer,  decded o roduce he geec es for breas cacer oly o he Amerca marke. Te prce ag for he procedure was he se so hgh ha o a sgle surer agreed o pay for . Sll more serous, says Wys, was he fac ha he  he compay does o coduc coduc ay research o a cure. Terefore he pae o oly prees he use of he kowledge  dagoss, bu also prees he course of furher research. Wys parcularly parcu larly objecs o he fac ha, alhough a grea grea deal s sad abou hese sors of ssues, ery lle s acually doe. Iellecual propery s acqured by he sues wh he mos moey. Ad he bg moey s  Amerca. Wys s cocered abou he lack of suppor for more progresse ways of hkg: “It looks as if the main forces are still heading the other way: against the current form of globalization, against free-market rules. Some sectors stick to the old rules and the open source spirit doesn’t have the means to enable them to achieve what they want. Our innovative potential is slipping towards third-world situations and we don’t know where it’s all going to end.” Lode Wyns, 2005

Lode Wys sees wo ways of resolg hs dlemma. Te firs s, perss. We cao le he ourage oer cases lke Myrad Geecs o de dow. Te ogog lawsu mgh focus our dgao, bu here’s o guaraee of a faorable oucome. oucome. Tere mus be a geeral udersadg ha  ha ellecual owershp cao jus be clamed by ayoe. A culure  whch kowledge s freely shared sde ad ousde of uerses s produce. Wys’s secod soluo s he caasrophe, as oly a dsaser wll brg abou real chage. A prese, hgs are so far off balace ha such a dsaser seems close a had. Lessg mgh seem o be a exreme pessms, bu hs proposals for escapg he mpasse are raher mld, especally f we compare hem o

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Wys’s caasrophe. Lessg’s recommedaos are specfically eded o ake some of he be ou ou of permsso culure, whch would prmar pr marly ly eal reducg he asks requrg lawyers ad prodg a few praccal aleraes o he auomac “all rghs resered.” copyr gh. Tere are aleraes o he exs exsg g copyrgh. copyrg h. . A alerae copyrgh. For sofware, here are ope source lceses. For oher coe such as books, he “creae commos” exss as a alerae, recogzable by he double C wh he crcle sead of he sgle C of he radoal copyrgh. Lessg calls he creae commos a “reasoable” maer of esablshg esablsh g rghs. rg hs. No lawyers eed o be oled whe someoe someoe was was o do somehg wh he coe, ad ha s wha Lessg sees as he greaes blessg: he reduco  rasaco coss for hose who wa o work  hs maer. . Shorer ad smpler copyrgh. Te durao of copyrgh should be as shor as possble. Log eough o eable he maker o realze some beefi, bu o loger. I mus be smplfied, for he erpreao of “far use” or he dsco bewee “deas” ad “expressos” are hgs ha keep lawyers busy. . Te absece of a © symbol meas “use uless....” uless....” As meoed, copyrgh copyr gh s auomacally ssued o he perso who creaed he coe. Howeer, he absece of a copyrgh symbol o a work should mea ha ohers eed o ask permsso o make use of he work.

6.4 Private plus public in the software sector Chaper 3 descrbed he deelopme of he ew mxed form of prae ad publc propery  he sofware dusry. Self-eres ad moey hae resuled  he coergece of prae propery ad he publc doma. Such a mxure has proe o be possble  he sofware dusry. Deba, a Lux ara, ar a, has a marke alue of US$ US $ 1.5 bllo ad s publc doma. Compaes lke Red Ha ear subsaal subsaa l reeue reeue from sercg serc g ope source producs, producs oer whch o oe has excluse corol. Howeer, here s a balace, a rade-off bewee publc eres ad prae owershp. Whe orgazaos wa o ear moey by employg he publc – people who are o o he payroll – he publc asks a sks for somehg  reur, such as legal corol, respec ad ee moey. Whe ope source lceses are used, he collaborao bewee busesses ad he commuy elarges he  he publc doma. Howeer, may of hese collaboraos coll aboraos are o based o ope source lceses. Owershp of wha s he made ad creaed s,  mos cases, legally assged o he compaes. Te makers recee a fee for her effors or a share  he compay’ss come f compay’  f he  he produc geeraes ew busess.


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I “mash-ups,” boh he publc doma ad prae owershp grow, whch s oe of he reasos why hese forms are srogly o he rse. A mash-up s a ew serce ha cosss of a exsg webserce ad somehg ew ha somebody has added o . Te APIs API s of Google Earh or Yahoo Maps are, accordgly, made aalable ad ayoe ca buld hs or her ow serce aroud hem. Oher examples exa mples are proded  Chaper 2. Yahoo dsrbues s sofware deelopme k (SDK ( SDK)) uder a ope source lcese (BSD ( BSD), ), bu he serces ha you ca buld wh  come uder a specal lcese (erms (erms of Serce Ser ce). ). Such Such serce ser ce coracs assg mos of he ellecual propery o he compay. Google does he same. “As between bet ween You You and Google, Googl e, You acknowledge that Google owns all right, title and interest, including without limitation all Intellectual Property Rights, in and to the Service and that You shall not acquire any right, title, or interest in or to the Service, except as expressly set forth in the erms of Use.” 12

Bre aylor, he brad maager of Google Local, says ha he success of Google mash-ups s parly due o he fac ha he  he publc ca make moey wh hem.  hem. Google ges he mash-up makers a share of he reeue from adersemes ha Google sells. As a cera mash-up proes o be popular, Google exercses he rgh o pos adersemes o he se. (Oer he hrd h rd quarer of 2005, Google eared abou US US $1.5 bllo from ole aderseme sales, a rplg of hrd-quarer eargs  2004.) Cosequely, rghs ad come are shared. Google has he rgh o place adersg; he makers hae he rgh o use Google maps ad o make somehg ew from hem. Yahoo does deed gra a poro of he ellecual propery o he makers of ew serces o he bass of her API s. “Yahoo!’s “Yahoo! ’s rights apply to the Yahoo! APIs APIs and all output and executables of the Yahoo! APIs, APIs, including Yahoo! search results, but excluding any software components developed by you which do not themselves incorporate the Yahoo! APIss or any output or executables of the Yahoo! APIs.” API APIs.”13

Isead of he frusrao ad lawsus arsg bewee owers of ellecual propery ad he “msusers” of , a w-w suao s creaed. Makers of webserces, webser ces, eors eors who parcpae parc pae  he Iocee ework (see Chaper 2) were spred o corbue somehg o someoe else’s ellecual propery ad rewarded for dog so. Te mos mpora lmaos of he permsso culure as descrbed by Lessg ca be remoed by clarfyg  adace he agreeme bewee he pares. Isead of regardg he sharg of self-bul serces as a hrea, a ew

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Open for Business

busess model s cosruced ad a ew legal bass esablshed o suppor a muually profiable collaborao. We are so cocered wh cosrug he dscusso abou “ope”  legal erms ha we early forge o cosder he oher exsg possbles: gorg he lawyers. For a lawyer, hs s o a arace opo, bu  pracce, ellecual owershp s largely gored  he case of books, musc, games, compuer programs programs ad physcal produ producs. cs. Immedaely we hk of coures lke Cha, where proeco of ellecual propery s rually o-exse. Tere s a joke gog aroud abou ellecual propery rghs  Cha: “Cha s he bgges fa of ope source. Look a he umber of Mcrosof producs beg used here.  here.”” I realy, hgs hae goe so ou of had ha he sascs abou he use of Lux  Cha cao be rgh. PCs PC s are sold wh Lux, Lux , bu as soo as a box s opeed ad he compuer compuer ured ur ed o, a llegal ll egal erso of Wdows s salled. Te defeders defeders of prae propery, he large mulaoals, are seekg a way o collar lawbreakers. Oe of her effors oles closg dow eworks such as Napser o whch dgal files ca be shared. Te problem wh hs approach (or perhaps “ragedy” s he beer word) s ha he srume s ofe ery blu. I o oly prees he llegal use of such programs, bu ofe permssble pracces are uecessarly resraed. Ts draws he re of Lawrece Lessg, who clams ha he “all rghs resered” lobby ow has he upper had.

6.55 Conclusion 6. Neher ope or or closed bu “somehg -bewee” seems he mos lkel kely scearo for oao. We ca see hs happeg  he sofware secor. Howeer, Howeer,  mus also be sad ha  ha ope oao ad he publc doma hae much greaer sgficace here ha    oher secors. If he happegs  he sofware secor are o be mrrored elsewhere, he publc doma wll hae o ga  sregh  order o prode a beer balace. Te growh of he publc doma  he sofware secor has occurred  a boom-up maer: orgag wh users raher ha wh compaes, ad he GNU Geeral Publc Lcese was subseque subsequely ly he codo for hs growh of he publc doma. Correspodgly, we oe ha raslaos rasl aos of proper properyy rghs  he  he form of he “creae “creae commos” are also percolag hrough o oher secors. If he publc doma s o preal oer prae propery, or a leas o grow  sze, he goerme wll hae o creae he approprae codos. Despe all he ope source aes,  s clear ha oher secors are sll sl l uable o ejoy he same laude ha holds sway  he sofware sofwa re dusry. We We wll w ll heref  herefore ore coclude coclude hs book wh w h a subjec ha we hae o ye addressed: wha role should goerme play? For he aswer o


187

h s queso we ca reur o he hs  he farmg farm g couple who who waed o proec proec her propery, her arspace. Te cour ameded he law uderlyg her argume because a ew echology requred . Smlarly, Sml arly, oudaed oudaed legslao s obsrucg he produco reoluo sparked by he ere, he possbly of lkg l kg ogeher all he ellgece ellgece all al l oer he world. New produco compaes requre proeco o grow. Whe proecosm occurred  he  he aao dusry, he publc doma creased  sze. A flourshg floursh g ew ere ere dusry dusr y has also bee aded by a larger publc doma. As proecor of he publc sphere, he goerme has o creae he approprae codos by re-ealuag exsg legslao o ellecual propery  he lgh of ew echologcal possbles, prae ellecual propery, ad publc eres. Howeer, hs s o o coclude ha we ough o wa for wha he goerme wll do before reapg he rewards of ope oao. Eery compay ca beg expermeg wh ope oao ee ow. Te more success ha compaes ejoy wh ope oao, he  he greaer he chace ha he fuure wll, wll ,  fac, be ope. Notes to Chapter 6

home.esa.e/~h home.e sa.e/~hpb/ pb/cases/ cases/causby-1.hml. causby-1.hml. www.opesource.org. e.wk e. wkpeda.o peda.org/wk rg/wk/Ope /Ope-sour -source_lcese ce_lcese.. Haslmaer, J.D. Closing the Open Source Compliance Gap, 2005, www.hro. com/pubs/closghegap.pdf. . 37 cfr 201.36, ze www.sce.oas.org/_prop/a_leg/Usa/rcref. asp201.26. . www.fsf.org/lcesg/lceses/dex_hmlDocumeaoLceses. . IBM Saeme of No-Assero of Named Paes Agas OSS , www. bm.com/bm/lcesg/paes/pledgedpaes.pdfsearch=’bm20Pa e20pledge’. Compuer er Assocaes Assoc aes Ieraoal, Ieraoa l, Ic.’s Ic.’s Saeme of No-Assero of . Compu Named Paes Paes Agas Aga s OSS, OSS , ca.com/paes/oss. . Su Mcrosysems, Sun Grants Global Open Source Community Access to w ww.su.com/sm/Press/susu More than 1,600 Patents, Jauary 25, 2005, www.su.com/sm/Press/ flash/2005-01/suflash.20050125.2.hml. IBM ’, December 2003, ww www. w.coersaos.com/ coersaos.com/shows/ shows/deal deal61. 61. . ‘SCO s. IBM’ hml. (Te ere aalyss s aalable for lseg or o be dowloaded as a podcas) . Wyas, M., Corels, J. (Eds.) How Open is the Future? Economic, Social & Cultural Scenarios Inspired by Free & Open-Source Software, VUB Brussels Uersy Press, 2005. . Google Maps API erms of Use, www.google.com/aps/maps/erms. hml. . Yahoo SDK Software Soft ware License Agreements and Web API ’s ’s erms erms of Service, deeloper.yahoo.e/dowload. . . . .

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7

Tirteen lessons for open innovation

“Te aim and the core of this book is to draw inspiration from developments in open source software and apply it profitably to business innovat innovation.” ion.” Tis is how the first chapter begins. We hope that the spread of open source outside the sof tware sector and the stormy impact of open source culture inside of it have provided you with sufficient incentive to experiment further f urther with wit h open innovation. innovatio n.

Te exremely mpora coeco bewee ope oao  all secors of he ecoomy ad ope source s beg made o a creasg exe, as llusraed llus raed by he Demos repor “Wde Ope: Ope Source Mehods ad Ter Fuure Poeal Poeal”” ad by he so  so of dsrupe oao propagaed by Professor See Weber. Ta s why a passage from he Demos repor ad a expresso ex presso of Weber’ Weber’ss ehusasc expecaos e xpecaos appear as epgraphs for hs book. Te coeco s also made by he repuable cosulg firm McKsey & Compay, whch ssued a saeme  he sprg of 2006: “Tanks to the many books on ‘open innovation’ and to the prominence of opensource software projects such as Linux, most executives have at least a passing familiarity with the subject. Its central idea is that when companies look outside their own boundaries, they can gain better access to ideas, knowledge, and technology than they would have if they relied solely on their own resources. Some executives may even be familiar with the many variants of open innovation, a number of which stray a considerable distance from traditional ‘closed’ models of innovation management. Despite the familiarity of these ideas, persistent doubts and misunderstandings often make it hard to generate value from them. At one extreme, many people ask whether distributed models of innovation aren’tt notoriously hard to control, manage, and commercialize. At the other aren’ extreme, open innovation may seem to be mostly about narrowly defined joint ventures or transactions to acquire intellectual property created by others. If so, what’s all the fuss about? In truth, except for narrowly scoped forays (such as the licensing of technology) outside the confines of the enterprise, few top executives believe that they understand how best to create value with the open model of innovation.” McKinsey, 20061

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Despe he success of user-led ope source mehods  he sofware dusry, here s oly waerg belef ha ope oao ca creae alue for ddual busesses  oher secors. o buld a more obous brdge bewee ope source sofware ad oher fields where ope oao could be appled, we hae proded umerous examples of ope oao, eded as sources of sprao. Tese examples show ha he escapable fuure of ope source ad he eable emergece of a ew produco model (ope oao) wll coerge ad reforce each oher. Ts sgh should prode a mpora smulus, makg  clear ha busess ca o loger wa o reac o deelopmes  her ow markes. Makg a proace early sar dow he  he pah of ope ope oao wll crease he chace of acqurg a compee adaage. We wll herefore coclude hs book wh hree lessos for ope oao,  order o help you sharpe your sraegy alog he suggesed les. 1 Te end of the closed business model

Ope oao prodes a rch array of possbles. Compaes ha close hemseles off o hese opporues wll, o a creasg exe, be cofroed by orgazaos ha are,  fac, profig from ope oao. Compleely closed compaes wll lose groud o he compeo ad hey w wll ll fid fi d  creasgly dfficul o keep k eep up. I s o loger a queso of IF bu WHEN o adop ope oao. 2 Future competition will come from anyone with an idea

Opporusc compeors wll prmarly succeed by bdg people o he orgazao. I a me of hypercompeo, here s less ad less me o urure uru re good deas deas ad allow al low hem o deelop. Before Before we kow , he compeo has ousmared us. A Procer & Gamble, he defio of compeo has bee updaed o be more  ue wh moder mes: “My bgges compeor oday s a perso wh a dea.” Swchg from cosumer producs o sofware produco, we see he beefis of user oleme descrbed by Erc Raymod  Te Cathedral and the Bazaar: “Ge eough eyeballs, all bugs are shallow.” Ayoe ca come up wh deas for mproeme, ad a sofware commuy makes  possble o ga access o he deas of eeryoe. A Boeg, he commuy deoed o deas for mproem  mproeme e s called ca lled he  he World Desg eam. eam. Ayoe A yoe readg hrough he dscussos publshed o he Boeg se wll fid such remarks as, “Hae you hough abou abou hs h s possbly” possbly ” or “I’e oced oced ha you hae hough abou hs, bu would  o be smarer smar er o approach he problem  such ad such a maer?” Ts s o so dffere from he deeco of sofware bugs, excep ha produc mproemes lead  hs case o a beer arcraf.

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3 User experience is essential to open innovation

If ope source makes us aware of ayhg, ’s he fac ha users (cusomers) are esseal ad her expereces are prceless. Look a wha happeed wh he expereces of a few ke surfers who decded o buld her ow kes. k es. Tey were were able o make a beer produc ha hose beg sold  he sore. Clearly, ope oao o oly oles he quay of deas ha compaes ca ge her hads o bu also he qualy of hese deas. Buyers ad users of producs are beer able ha ayoe o make ealuaos based o expereces – beer able ee ha he producer, who s o exper  ha field. For que some me, may cosumers hae bee wag o modfy sadard producs. A sudy o hs subjec, rackg cosumer behaor oer more ha hry years, reeals ha o aerage 10 o early 40 perce of users hae cusomzed somehg  some way. Ope oao s ow geg so much aeo because he possbles possbl es of dog somehg h g wh he oao process hae ow quck quckly ly ad radcally chaged. c haged. Te ere s he mos mpora facor  hs regard; ope source would hae a much more margal exsece f he ere dd o exs. 4 echnology makes open innovation possible

Taks o he ere, we ow hae ope source, weblogs, peer-o-peer commucao ad ope oao. All hese forms of commucao hae chaged socey. We ca do more ad kow more collecely ha we ca as dduals. ddual s. Ts emacpaes us, as kowledge kowledge ad expereces ca lerally shoo off  all drecos ad are more accessble ha eer. Oe oher aspec of echology s jus as mpora for he rapd ad radcal emergece of ope oao: he ools ha make  possble o co-creae. A ere se for he deelopme of sofware s oe such ool, bu so s a program for processg phoographs. Eeryhg ha makes  possble for us o code ad process he world aroud us corb ues o ope oao. Tese deelopme deelopmes s come ogeher  a geerao ha s famlar fam lar wh he ere, adep a usg he ools ad capable of rasformg socey by sharg s creay wh eeryoe. Ts geerao s kow as Geerao C; he “C” sadg for coe, creay, commuy ad, of course, codg. 5 ake a digital view of the organization

Te laguages of ope oao oao are dgal. dga l. Dscoer he possbles by adopg a dgal ew  ew of your orgaz orgazao. ao. Webserces, Webserces, sofware, sof ware, ex, audo, aud o, CAD CA D/CAM desgs, bu also jus he smple commucao ools of he ope source commuy are all seps oward ope oao.

7 • Tirteen lessons for open innovation

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6 Find people with a passion for the product

Ope source sofware deelopme has demosraed ha passo s a mpora facor for success. We see he same hg elsewhere: beer loers go Brewopa off he groud, aao ehusass hae –  a cera sese – suppored Boeg ad, who kows, here mgh soo be a ew le l e of fishg rods o he marke desged by passoae fishg ehusass. Te rue passo for a produc ca lead o somehg successful, such as Lux. Ye, Ye,  ca beg wh w h somehg as small as a sgle shoe, shoe, lke l ke he shoe deeloped by Aasasa  Russa for a compay wag o brg ope source shoes o he marke. May creae dduals hae a passo ad are prepared o share  wh each oher or wh a compay. Te pah leadg o profig from such a resource oles bdg he mos mpora users – he “lead users” – more srogly o he orgazao. Ts ca be a sep oward a more ope sraegy for a compay ad he foudg of a ruly passoae commuy. 7 Anyone wanting to undertake open innovation innovation must surrender partial control

People from ousde he orgazao are less wll w llg g o be maaged. Ts s rue r ue  ope source sofware projecs ad apples o oher ope oa oao aes  aes as well. wel l. o o pu  ee more srogly, srogly, a par of he success depeds o he exe o whch people ca maage hemseles. ask allocao s a odds wh hs h s feaure. Self-deermao Self-deerm ao o oly esures ha a a  effice mechasm mecha sm regul reg ulaes aes he supply ad demad dem ad of work, bu  ee leads o he bes possble performaces by parcpas, who are excepoally moaed. I addo, asprg parcpas esmae o he bes of her ables wheher ad how hey ca make a suable corbuo. 8 Open innovation makes fewer managers necessary

Karm Lakha s resposble for he MI Ope Source Research Commuy ad he s wrg wr g a dsserao dsser ao  whch he speculaes specul aes abou abou wha added alue maagers ow prode. Ope source produco ca be performed wh ery lle oerhe oerhead ad ad he persos who assume some of he roles of bosses do so purely o he bass of her mers. Tey all are perfecly famlar faml ar wh wha has o be acheed because hey hae hae hemseles come up hrough he raks, ad f hey do o perform well, here s always someoe someoe else ready o ake oer. Ts s perhaps a dealzed pcure, bu eery maager should eerheless udersad ha you ca succeed  delerg ery good performaces  hs maer. Why do we acually eed maagers s oe of he may quesos ha ope source rases. I may be ha Lakha Lakh a’’s queso wl wlll spre orgazaos o uderake more ope oao. Te success of self-deermao  ope source sofware could cause a resurgece of self-dreced eams ad re-geerae prcples of self-dreco ha orgally org ally bega o emerge emerge  he eghes.

192

Open for Business

Ousde he sofware secor secor,, compaes lke l ke oyoa oyoa hae ery serously corporaed self-maageme prcples o her ow orgazaos 9 Open innovation innovation is is good for the company image

Boh sde ad ousde he sofware sof ware secor, we see ha ope oao oles more ha he al queso  hs book: “How do we ga access o he mds of all cleer people?” Afer all, hag users ad cosumers collaborae wh compaes blurs he boudary bewee be wee R&D ad commerce. Ts was abudaly clear wh Brewopa, Treadless ad Lego, as well as wh he mash-up webserces of Amazo, eBay, Google ad Yahoo, ad also  he case of Su’s Solars operag sysem. Oe of he aracos of ope source s ha  has a pose effec o compay mage. Ope source s more readly assocaed wh “good” whereas closed s assocaed wh “bad.” IBM makes commercals for Lux, a produc ha does o a all belog o IBM , purely for markeg purposes. IBM wll beefi f Lux becomes a srog brad, bu  wll also beefi by aachg self o he successful mage of hs h s brad ame. Te same apples o “popular brads.” Google, eBay, Amazo ad Yahoo all hae a cas-ro mage haks o he laude wh whch hey e cusomers o parcpae. parc pae. Ts does o always ole ope source  he srces sese, bu ceraly cera ly ope oao. oao. I parcula parc ular, r, hs oles brad democrazao, he esablshme esabl shme of a ope brad, whch s o exacly he same hg as produco democrazao, he powerful effec of ope source sofar as produc oao s cocered. Flueog, Boeg, Coerse ad all he oher examples of ope oao dscussed earler are ceraly also cocered wh “brad democracy.” 10 Slightly open is also permissible

Closed ad ope are o muually excluse. Te choce s o black or whe. Open for Business ca be realzed  may ma y ways. A aalyss of wha I corporaos do wh ope source reeals ha “ope” ad “commercal” ca reforce each oher. Te pure ope source players, such as Apache, are ow assocaed wh commercal ope source eerprses. A hybrd sofware marke has bee creaed  whch ope ad closed suppleme each oher. Ope source has become masream, ad eery compay was o ge a pece of he pe. Te same hg s happeg ousde he radoall I secor. I he mos closely relaed field, ew-ecoomy comradoa compaes lke Amazo hae dscoered ha sharg sofware wh he exeral world ca reap rewards. Esmaes are ha e mllo ml lo requess are made o Amazo daly by way of webserces o oher ses. Ts geeraes more raffi c a he compay’s ere sore. s ore. A ope oa  oao o approach has proe successful, ad demosraes ha a mxure of ope ad closed ca work. Open for Business comprses seeral opos: wde ope, half ope or ope jus a b. I all depeds o he desred relaoshp bewee ope ad closed.

7 • Tirteen lessons for open innovation

193

11 Intellectual property is to be protected, even in the case of open innovation

Makg moey from R&D s sll possble f rghs are properly maaged. See for example he lceses ha Google uses for s webserces or he coracs used o he Iocee oao ework. 12 Te open future offers a range of opportunities

Te deelopmes  he sofware marke dcae ha ope source s gag he upper had. A he same me, we see ha legslao coues o place resrcos resrc os o “ope.” “ope.” IBM releases paes whle smulaes mulaeously acqurg ew oes. People lke Lawrece Lessg ad Lode Wys prophesy a roubled fuure. Te mos mpora lmao o ecoomc growh s he permsso culure  whch we are all ow lg. Te doma of prae ellecual propery s growg larger, ad he free exchage of kowledge  he publc doma s beg creasgly frusraed. Lessg ad Wys hope ha commo sese wll preal, bu oly me wll ell whe ad how hs mgh happe. 13 Open innovation is just that good

I s o accde ha ope source deelopers are able o make ousadg producs. Specfic arbues of ope oao are resposble for geerag excepoal moao ad supreme focus. Ope oao allows oe o eer he sae of “flow,” he codo uder whch performace s opmzed. Note to Chapter 7

. “Creao Nes: Geg he Mos from Ope Ioao,” Te McKinsey

Quarterly, Aprl 2006, www.cfo.com/arcle.cfm/6937262?f=relaed.

194

Open for Business

Index .NE 129 3M 31, 46, 46, 86

A Aalbers, Mare 142 Acceure 91 Adobe 104 Adraas, Peer 26 adersg 74-75, 89 Agle Mafeso 162 agle programmg programmg 152, 162 agle ag le sof sofware ware deelopme 158, 161-166, 168 arcraf cosruco 53-54 As Seka 68 Allch, Jm 160 Amazo Ama zo 42, 62-65, 86-8 86-877, 90, 193 Mechacal Mecha cal urk urk 30, 66 Amdahl, Gee 164 AMOS 50 Apache 15, 17-18, 17-18, 21, 33, 37, 101, 114, 129, 1 29, 145, 157, 157, 193 Ope for Busess Projec 28, 31 usee 139-140 Apple V 111 Arficall Iellge Arfica Iellgece ce Laboraory Laboraory (MI) (MI) 18 assocaes 65, 90 Asersk 103 Aos Org 91 Aud 75, 86-87, 89 Augus, Larr Larryy 100, 100, 122 B Baler, Dae 77 Basc Lear Algebra Subroues 131-1 131-132 32 BEA sysems 112 beer 77 Behledorf, Bra 17-19, 101

• Index

195

Berkeley 17 bo-compug 42, 50 Brey, Ewa 50-51 Bzer, Jürge 141 Blaauw, Gerr 164 Bleder 142 bloggg 30 Boeg 80, 91, 123, 190, 190, 192-193 Boodma, Aaro 63 Bordeu, Perre 139 Boso Cosulg Group 68, 70 brad democracy 193 Brauer, Klaus 80 Brewopa 77-79, 87, 87, 89, 192-193 Brooks, Frederck 164-165 Buldg Buld g a Ope Source Space Program 54 busess 16 busess model, closed ~ 190 Busess Process Re-eg Re-egeerg eerg 70 buzz age 77 BzzAge 42, 76-77

C CAD/ CA D/CA CAM M 42-43, 48, 50, 54, 57 Cambra Cambr a House House 30, 82-83, 86 Cao 60 Capgem 91 Cathedral and the Bazaar Ba zaar,, Te 154, 190 Causby, United States versus ~ 175, 183 CDDL 119-120 Ceer for Ope Ioao 23 Ceraall Beheer (surace compay) Ceraa compay) 76 challeges 129 Cherkoff, James 75 Chesbrough, Hery Hery 23, 26, 26, 70 Chcagocrme.org 64, 86-87 Cha 187 Chrsese, Clayo 34, 41, 44-45, 44-45, 87 Chumby 32, 83, 86 Clckworks (NASA) 66-67 Cloudscape 114 Cockbur, Alsar 152, 161 161-164, -164, 169 Cohe, Josh 107 CollabNe Colla bNe 18-19, 101, 132 Coloy, George 106

196

Open for Business

commercal success 19 commercals 75-76 Commee for Ecoomc Deelopme Deelopme 23 Commo Deelopme ad Dsrbuo Lcese (CDDL) (CDDL) 119 commo source 22 commual characer 14 commuy 14, 36 commuy produc 89 commuy source 22, 151, 151, 158-159 158-159 commuy-buldg process 154 compeo 12 124, 4, 145, 190 Compere 16, 91, 97, 97, 105, 113 compuers, buld buldg g ~ 80 compug 52 Coerse 75, 86-87, 86-87, 193 cooperae gamg 169 copylef 17, 27 copyrgh copyr gh 17-18, 17 174, 4, 176, 176, 185 Copyright Act 183 cos reducos 122 creae commos 49, 77, 77, 174, 174, 185, 187 crowdsourcg crowdsourc g 13, 27-30, 33 CrowdSpr 82-83, 86 Crysal Clear 163 Cskszemhaly, Mhaly 142-143, 146 culure 151, 153 ~ of exp experece erece 158

D Dad, Loel 82 Deba 100, 116, 185 Dell 91, 106 Democratizing Innovation 46, 48, 77, 89, 151 Demos 47, 189 Dgal Coecos Coecos Coucl (DCC) (DCC) 23-24 Dgall Desger (Lego) 55 Dga dgal ew of orgazao 191 Dgum 103 Drecorae-Geeral DrecoraeGeeral for he Iform Iformao ao Commuy (EU) 134 dsrupo: low-ed ~ 45 ew-marke ~ 45 Doofro, Ncholas 47 DoubleClck 111

• Index

197

Draper Fsher Jureso 104 Dyamcs 3.0 111

E eBay 63, 65, 193 Eclpse 114, 129 El Llly 71-72 Ellso, Larry 111 Ecyclopeda Braca 84-85 Epphay 104 ERP sofware 16 Eas, Phlp 68-69 Eas Daa Daa Corporao 132 experece, ex perece, culu culure re of ~ 158 Experience Economy, Te 80 exreme programmg 152 F F/OSS 99 Facory (Lego) 55-56 facory smulao 52-53 famly affar 140-141 Fk, Mar 119-120 Frefox 129 FL/OSS 99 Flexsm 53 Florda, Rchard 60 flow 127, 142-1 142-146, 46, 148 Flow: Te Psychology of the Optimal Experience 14 1422 Flueog, Joh 58-60, 87, 122 122,, 176-179, 176-179, 193 Ford, Her Heryy 17 17,, 43 Forreser Research 106, 166 Free Culture 183 free sofware 21, 99 Free Sofware Foudao (FSF) 17-19, 100, 174 174 Future of Competition, Te 46 fuure scearos 173

G Gabrel, Rchard 30, 118 Gaes, Bll 37, 111, 128, 134 134 Geeral Moors 76 Geeral Publc Lcese Lces e (GPL) (GPL) 17 17,, 120, 178, 187 Geerao C 35, 41-42, 41-42, 57-58, 57-5 8, 60, 80, 191 191

198

Open for Business

geecs 42, 50 Gerlach, Charles 54-55, 80 Gerlach Space Sysems 54 Gerser, Lou 114 Gerwe, Fras a 76 gf ecoomy ecoomy 128, 138-141, 138-141, 148 Ggaworld 106 Glmore, James 80 Global Ioao Jam (IBM) 31 Globus projec 114 Gluecode 114 Gome 103 Goldma Sachs School of Publc Publc Polcy Polcy (Uersy (Uersy of Calfora) 51 Goldma,, Ro 30, 118 Goldma Gozales-Baraho Goza les-Barahoa, a, Jesus M. 154 Google 62-65, 90, 110-11 110-111, 1, 185, 193-194 193-194 ~ effec 62 Google Earh 185 Google Local 185 Google Maps 64 GoDoNe 107-108 Goo, Kazushge 131-132 GPL 17 17,, 19, 21-2 21-22, 2, 81, 120, 175, 178 Grassé, Perre-Paul 154 Greasemokey 63-64 Grosfeld, Tomas 24

H Haslmaer, Hasl maer, Jaso 173, 176-177, 176-177, 179 Hallowee Hal lowee Docume 106-107, 109 Hase, Mark 55 hardware 81 propreary ~ 106 hardware rualzao 52-53 Harard Busess Busess School 34, 44 Hawk, Jeff 80 Hezma, Doug 159-160 Hppel, Erc o 19, 25-26, 25-26, 34, 46, 48-49, 77, 88-89, 139-1 139-140, 40, 151 151 Hor, Paul 24 Hot Wired 17 How Open is the Future? 182 Howe, Jeff 29 HP 22, 91, 99, 106, 116-117, 116-117, 120, 12 1244 huma ework, gredes for succes 70

• Index

199

Huer, Jaso 131, 145 Huer, hybrd model 22 hype cycle (Garer) 33

I IBM 15 15-16, -16, 22, 35-37, 35-37, 91, 99, 106, 112, 114-115, 11 4-115, 120, 122-124, 122-1 24, 151, 153, 159-161, 159-161, 178, 193 193 Global Ioao Jam 31 SCO ersus ~ 180-181 IDC 62-63 mage 123, 193 formao mapulao 52 Iobase 112, 125 Iocee 71-72, 86, 185, 194 194 oao 16-17 16-17,, 22, 43 closed ~ 24-25 cosumer-led ~ 25, 35, 46 dsrupe dsr upe ~ 34, 44-45, 86 ope ~ 13, 23-25, 25-26, 33, 41, 189 user-dre user-d re ~ 27-28, 34, 46, 48 user-led ~ 151 Ioao ad Erepreeurshp Group (MI Sloa School of Maageme) 34, 48 oao commuy 70 Innovation Happens Elsewhere 30, 118 oao che 49 Ioao Plaform (Duch) 24 Innovator’ss Dilemma, Te 45 Innovator’ Isue for Busess Value Value (IBM) 54 Isue for Sofw Sofware are Research (Uersy of Cal Calfor fora) a) 37, 152 Ieraoall Socey for Compuaoal Bology 50 Ieraoa ere 17, 19 umber of users 182 Irdum 53 J Jager, Durk 71 Jake, Jorg 113 Jaa 121, 123 JBoss 15, 19, 106, 112 Joes Soda 77, 89 Joy, Bll 159 K Kaeko, See 80 Kelly, Joh 35, 115 Kempele, Wolfgag o 66

200

Open for Business

ke surfi surfig g 48-49, 54 kowledge, kowledg e, eral eral ad exeral ~ 123 KRO (broadcaser) 58 Krogh, Georg o 140

L Lafley, Ala 71 Lakha, Lak ha, Karm Kar m 19, 13 139-140, 9-140, 142, 145, 158, 158, 192 192 laguage 88-89 Lead User Coceps 46, 48, 151 lead users 47, 86, 192 192 Leadusers (webse) 46 learg process 144 Lego 55-56, 86-87, 89, 91, 122, 193 ope oao lessos lessos 57 Lessg,, Lawrece 115, 174-1 Lessg 174-175, 75, 181, 183-185, 187, 187, 194 Lee, Paul 65 lcese 17-18, 22, 49, 77, 81, 81, 119, 124, 174-177 174-177 caegores 178 Lux 15-1 15-177, 19, 21-22, 21-22, 33, 35-37, 96-97, 99-100, 102, 105, 108, 114, 116-117 116- 117,, 119-120, 157, 187, 192-193 owershp 179 Loghor 37, 159-161 Lous Noes 159-160 low-ed dsrupo 45 Lulu.com 58 M maagers 192 Madrake 116 MapPo 111 marke oao 17 markeg 74-75, 89 mash-up 42, 63-65, 111, 185, 193 Maurer, Sephe 51 McKsey 189 McMaus, Jeffrey 63 Mechacal Mecha cal urk urk (Ama (Amazo) zo) 30, 66 Medell, Rco 143 medce 42 Merelo, Jua Jula Jula  154 merocracy 157 merocrac leadershp 21 Mckos, Mare 101

• Index

201

Mcrosof 16, 22, 35-37, 35-37, 80, 91, 97, 105-111, 151, 153, 153, 160-161 compeors 108-111 Google as eemy 110-1 110-111 11 modularr sruc modula srucure ure 151, 158, 170 Mogle, Ebe 180 moey, mak makg g ~ 96, 134-135, 134-135, 148 MONO 129 moao 127, 146-148 rsc ~ 19, 146 146-147 -147 Mozllaa 99, 104, 129, 159 Mozll 159 MV 58 Mulhall, Lam 78 Muller, Werer 71 Myrad Geecs 184 MySQL 16, 19, 19, 36, 97, 97, 99, 101, 105, 112 112-113 -113

N Napser 187 NASA 16, 30, 55 Clckworks 66-67 Naoal Ceer of Supercompug Supercompug Applcaos (NCSA) 17 Nescape 99 ew-marke dsrupo 45 Nezsche, Fredrch 136 Nke 75, 89 NeSgma 71-72, 91 Noka 26 Noell 91, 99-100, 102-103, 112, 120 O Oh Yeo Ho 73-74 OhmyNews 73-74, 85-87, 89 Ope for Busess 28 Ope for Busess Projec (Apache) 28, 31 ope oao 13, 23-25, 25-26, 33, 41 examples 42 lessos 189 Ope Ioao 70 ope sof sofware ware deelopme 168 ope source: characerscs 18 may faces of ~ 15 moao 127, 146-147 power of ~ 16

202

Open for Business

relaoshp wh ope oao 13 sraeges 95-96 Ope Source Busess Coferece 44, 81 ope source commuy: moao 127, 147-148 roles 131, 153 ope source culu culure re 151, 153 ope source deelopers: characerscs 132-133 moao 127, 147-148 wag o belog 136-138 Ope Source Deelopme Deelopme Lab (OSDL) (OSDL) 100 ope source effec 62 Ope Source Fooware 59 Ope Source Iae (OSI) (OSI) 19, 21, 119 Ope Source Referece archec archecure ure (HP) (HP) 116-117 Ope Source Research Commuy (MI (MI)) 192 Ope Source Rsk Maageme 96, 179 179 Ope Source Sof Sofware ware Deeloper Lab 105 Ope Source Space Program 80 OpeSolars 118-119, 179 OpeVew (HP) 116 Oracle 22, 91, 105, 111-113, 125 Ora, Cl 104 O’Relly, O’Rel ly, m 45, 63 Ormala, Erkk 26 Oero prze 50-51 owershp 173

P Palmsao, Sam 115, 120 Paraz, Mgs 130-131 passo for produc 192 pae pledge 178-179 paes 14, 26, 174, 174, 178, 181, 184 umber of ~ 182 Pahfider 16, 55 paro 124 peer-o-peer 31-32 Perl 129 permsso perm sso culu culure re 17 174, 4, 181, 181, 183 183 Permsse Lcese 111 pharmaceucal research research 14, 50 Phlps 24-26, 31, 46

• Index

203

PHP 102, 112, 129 Pchler, Roma 164 Pe, Joseph 80 Plaeshf 157 Plao 48 PosGreSQL 105 Powell, Jule 58 Prahalad, C.K. 46 press 73 Primitive Culture 153 prae plus publc 185, 185, 187 Procer & Gamble 14, 42, 70-72, 190 190 produc oao 50 propery: ellecual ellecu al ~ 26, 70, 70, 174, 174, 183, 185, 194 194 prae plus plus publc 185, 185, 187 publc ersus prae 173-175 propreary hardware 106 propreary serces 106 propreary-sofware propre ary-sofware supplers supplers 105 publc: ~ plus prae 175 ~ ersus prae 173-175 publc doma 175-1 175-177, 77, 187

R R&D 13, 24, 122 RAD 160 Ramaswamy, Vekaram 46 Rapd Applcao Deelopme (R (RAD) AD) 160 Raymod, Ray mod, Erc 18-19, 154, 156-158, 156-158, 190 Red Ha 35-37, 91, 96, 100, 100, 102, 112, 116, 120 Republic, Te 48 Rho 50 Rise of the Creative Class, Te 60 Robers, Joh 104 Robles, Gregoro 154 S Salesforce.com 104 Salk, Joas 182 Santa Cruz Operation (SCO) versus IBM 180-181 SAP 22, 91, 102, 105, 112 Scacch, Scacch , Wal 37, 152, 154, 154, 156-157, 156-157, 170 Schrel, Wolframm 141

204

Open for Business

Schumpeer, Joseph 34-35, 43-45 43-45 Schwarz, Joaha Joaha 81, 115, 120-121 Scece ad echology echology Polcy Coucl AW (Duch) 25-26 SCO ersus IBM 180-181 Secod Lfe 31-32 seeker-soler ework 71 seeker 91 self-deermao 19, 192 self-dreco 157 self-maageme 147-148, 156 Serceguard (HP) 116 shared source 22 Shared Source (Mcrosof) 107 107,, 111, 151 151 shoes 59, 176, 192 Sebel 100, 104 Semes 164 Smcs 53 smulao 52-53 Smulao Based Desg 54 Sleepyca 112 sofware deelopme 166-170 role users 17 sofware sof ware deelopme secor 158 sofware sof ware egeer egeerg g 161, 164 Sofware Sof ware Egeerg Isue 152, 158 sofware marke 95 sofware porfolo 97 Solars Solar s 22, 97, 97, 106, 106, 115, 118-1 118-120, 20, 123-1 123-124, 24, 193 soler 91 source code 17-18 SourceForge 19, 50, 108, 132, 141 Spaeh, Sebasa 140 Specer, Mark 103 Srasaa, Amabh 161 Sallma, Rchard Rcha rd 17-18 17-18,, 22, 100, 100, 179 Saford Uersy 132-133, 135, 139 Starzine 58 sgmergy 154, 156 Solea3.com 75 Success of Open Source, Te 17 SugarCRM SugarCR M 36, 91, 97, 97, 104 Su 22, 36, 81, 91, 97, 97, 99, 106, 112, 115, 117-121, 117-121 , 123-124, 123-1 24, 151, 159, 179, 193 193 Su Grd 121 surfke 86, 90 Suse 91, 100, 100, 102, 116

• Index

205

T aylor, Brad 185 aylor, Bre 63 aylor, Jacob 104 aylor, Mar 111 echc echcal al Uersy Uersy of Berl 132 echology 191 Teory of Ecoomc Deelopme Deelopme 43 Treadless 58-59, 74, 74, 86-87, 89, 193 193 ime Magazine, YOU as perso of he year 27, 32 MF 58 ora oralds, lds, Lus 17 17,, 21, 37, 37, 105, 157 157 oyoa 67-70, 86, 91, 166, 193 193 rasparecy 21 redwachg.com 57 ral ad error 49 ropcal rop cal Dsease Iae (DI) 31, 51 ylor, Edward 153 U UlraSP Ulra SPARC ARC processor 81, 120 Ued Layer 101 United States versus Causby 175, 183 Uersy of Berl 141 Uersy Uer sy of Calfora 23 Uersy of Ke 138 Uersy of Kel 136-137 Uersy of Maas Maasrch rch 132, 145 Uersy of Much 138 Uersy of rese 69 UNIX 99, 106, 121 user experece 191 user oao 49 user parcpao 48 user-dre oao oao 27-28, 34, 46, 46, 48 user-led oao 151 V VA Lux Sysems 100 VA Sofware 100 Valee, Bra 161 Vallopplll, Vud 107 alue creao 46 Vahaerbeke, Wm 23, 26 Vllasae, Jesus 134

206

Open for Business

Vrual Serer 97 rualzao 52-53 Vruech 53 VoIP 103

W Walde Ieraoal 104 waerfall mehod 165 Web 2.0 62, 111 Weber, See 17 17,, 45, 45, 189 webserces webser ces 42, 61, 63, 90, 111 WebSphere 114, 129 Weedma, Jeffrey 71 Wes, Joel 23 Wide Open (repor) 47, 189 Wjffels, Herma 24 Wkews 85 Wkpeda Wk peda 31, 84-87, 8989-90, 90, 176 Wdows 97 97,, 105, 160 Wdows Vsa 37, 159-161 Wired 13, 17, 29 Wolf, Rober 142 Wolfe, Bob 68-69 worksao, rual r ual ~ 17 17,, 19 World Desg eam eam (Boeg) (Boeg ) 80, 91, 190 World Wde Web Web Cosorum (W3C) 129 Wys, Lode 182, 184-185, 194 194 X Xerox 18 Xma 100, 102-103 XML 111 Y Yahoo 63-65, 89-90, 185, 193 Yahoo Maps 185 Yggdrasl Compug 100 Yoshmoo, Yuaka 26 YOU (ime Magazine) 27, 32 YourEcore 72-73, 91 Youube 30, 111 Z Zely, Zely , Dad 138, 141 Zed 36, 102, 112

• Index

207

Open f or business business Open Source Source Inspired Innovat ion About t his book book Innovation is the engine of the economy, prospe prosperit rit y and progress. In our era of computers computers,, Internet and smart smart sof tw are, innovati onal inspiratio n is encroac encroaching hing f rom all di rec recti ti ons ons.. In order t o exploit the new b us usines iness s oppor tun it ies that are becombecoming available, organizations are being compelled to open themselves up t o t he masses masses.. This means fi rst rst and f oremo st th at ideas must be fostered via intense interaction with the outside world: partners, knowledge in sti tut es es,, competi competi tor s, and indi viduals viduals.. Expert users play a crucial role in this dynamic environment. This trend, w hich start start ed wit h open source soft ware development, i s now clearly spreading spreading thr ough all economic sec sector tor s. “ When we started started Brewtopia, we never never had a book like t his one t o tel l us how t o be ‘Open f or Busines Business s’, but I was there at th e bleeding edg e, developi developi ng rob us ustt t enets and and pr inciples. So I discovered discovered fr om fi rst-hand rst-hand experience that, w hen appl ied cor- rectly and w it h di lig ence ence,, th e practices and lessons described described in the chapters you have before you will certainly help you in set- ti ng up successfu l o pen-source and crow d-sourced bu sin es ess ses es.” .” Liam M ulhall Chairman, Managing Director/CEO of Brewtopia Limited www.brewtopia.com “ The traditional notion of what an organization organization is, how it is structured and how it operates operates,, is the equivalent of a silent silent movie i n t he 21st 21st cent ury. Human bein gs are are deeply social, and they have an innat e need to connec connectt and collaborate. Therefore, Therefore, understandin unders tandin g t he philo sophical and structural structural impli cations of the o pen source source movement movement i s imperative. Ignore thi s book at your peril!” Alan Moore Founding director of SMLXL Co-author of Communities Dominate Brands www.smlxtralarge.com About VINT Wit h VINT, VINT, th e Res Researc earch h Instit ut e fo r t he Anal ys ysis is of New Tec echnol hnol ogy f ound ed in 1994, Soget i Group i ns nspir pir es organi zati ons by means of publ ication s, seminars seminars and wor ks kshops hops on th e impact IT innovat ion s wi ll h ave. Rec ecent ent res research earch topi cs have been: Serviceervice-Orient Orient ed A rchit ec ectu tu re, IT Governance, Governance, Innovation, and New Media. VINT | Vision • Inspiration • Navigation • Trends F r o m l e f t t o r i g h t : E r i k , J a a p a n d M e n n o .

Open for Business - Open Source Inspired Innovation

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