1. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 1 BUSINESS MODELS FOR OPEN SOURCE SOFTWARE : TOWARDS A MATURE UNDERSTANDING OF THE CONCEPT AND ITS IMPLICATIONS FOR PRACTICE Joseph Feller, Patrick Finnegan & Jeremy Hayes University College Cork, Ireland Björn Lundell, University of Skövde, Sweden PANEL – OSS 2006

2. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 2 WHAT DO WE (NOT) KNOW? ● An analysis of 155 peer-reviewed research artifacts (1998-2004) ● Analysis – not review ● What types of OSS projects have been researched? ● What has been the area of research? ● What methodologies have been used?

3. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 3 WHAT TYPES OF OSS PROJECTS HAVE BEEN RESEARCHED? ● Ad Hoc Communities ● Standardised Communities ● Organised Communities ● Commercial Organisations

4. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 4 WHAT HAS BEEN THE AREA OF RESEARCH? ● Software Engineering Issues – Version Control – Software Architecture – Development Methodology ● Economic and Business Model Issues – Revenue Models – Resource Allocation – Market Drivers ● Socio-cultural and Organisational Issues – Conflict Resolution – Motivation – Legal Issues ● Software Application Spaces – Specific Vertical Sector (Automotive, Health, etc.) – Specific Horizontal Sector (Financials, Human Resources, etc.) – Software Acquisition and Management

5. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 5 WHAT METHODOLOGIES HAVE BEEN USED? ● Anecdotal / Descriptive – Little or no formal data-gathering methodology. ● Secondary – (Re-)Analysis of previous research. ● Case Study – Formal, high-depth data gathering focused on a single research site. ● Cross-Case – Formal, medium-depth data gathering focused on 2-3 research sites with comparative analysis. ● Field Study – Formal, low-depth data gathering across a wide number of research sites with comparative analysis. ● Survey – High-volume structured questionnaire. ● Experiment – Laboratory or field-experiment.

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7. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 7 THE “BUSINESS” GAP ● Commercial Organisations (particularly their relationships with other kinds of communities) ● Economic and Business Models (Full models, not just revenue models) ● OSS research literature requires greater discipline and rigour and more interdisciplinary research (cross-topic analysis) ● There is a relative lack of robust models and theories ● There is a relative lack of “why’s” and “how’s”

8. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 8 WHAT IS A BUSINESS MODEL? ● Consultants, executives, researchers and journalists have “abusively” used the phrase “business model” but have “rarely given a precise definition of what they exactly meant by using it. ● Business model as a way of doing business ● Business model as simplification of complex ‘real world’ description ● Business model as archetype

9. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 9 BUSINESS (REVENUE) MODEL ARCHETYPES The initial collection are as follows: Support Seller Loss Leader Widget Frosting Sell it, Free it Accessorizing Service Enabler Brand Licensing Community Enabler

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11. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 11 DELIVERING ‘WHOLE PRODUCTS’ WITH OSS ● Challenge for Libre software businesses is effectively delivering the “whole product” in a manner that takes account of, and in fact leverages, the unique business model dynamics associated with Libre software licensing and processes. ● Importance of business webs / networks in delivering ‘whole product’

12. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 12 WHAT IS A BUSINESS MODEL? (OSTERWALDER, 2002) It’s the business logic of how a company makes money in a sustainable way WHO? Target Customers Channels Customer Relationship HOW MUCH? Cost Model Revenue Model HOW? Capabilities Value Configuration Partnerships WHAT? Value Proposition

13. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 13 Business Model Ontology (Osterwalder and Pigneur, 2002)

14. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 14 Effects of network on participants' business models

15. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 15 EFFECTS OF NETWORK ON PARTICIPANTS' BUSINESS MODELS

16. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 16 EFFECTS OF NETWORK ON PARTICIPANTS' BUSINESS MODELS

17. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 17 EFFECTS OF NETWORK ON PARTICIPANTS' BUSINESS MODELS

18. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 18 technology life cycle COMMODIFICATION OF SOFTWARE intra company open cooperation commodity differentiating inter companies basic for the business wasting valuable engineering resources COTS Open source losing intellectual property technology (van der Linden, 2006) (www.itea-cosi.org)

19. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 19 HETEROGENEOUS DISTRIBUTED DEVELOPMENT in house outsourcing bounded collaborations external open collaborations company control & ownership knowledge & cost sharing software shift (van der Linden, 2006) (www.itea-cosi.org)

20. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 20 OPEN SOURCE IN THE STEEL INDUSTRY ● SSAB Oxelösund – a member of the SSAB Svenskt Stål AB Group – the biggest Nordic manufacturer of heavy steel plate – profits for 2003 totalled SEK 312 million http://www.ssabox.com/company/en_index.htm ● SSAB Oxelösund & Open Source – “SSAB Oxelösund releases its process automation system Proview as open source.” http://www.ssabox.com/news/pressreleases/h/en_proview_h.htm – Proview is available on SourceForge (under GPL) http: //sourceforge.net/projects/proview/ http: //www.proview.se

21. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 21 OPEN SOURCE IN LARGE COMPANIES In a study of state of practice with respect to Open Source in Swedish companies which have adopted Open Source Software one interviewee commented: “We use ObjectWeb, from a European OS consortium, which I would call a hidden pearl. We have used this in a large project at a customer site, and it runs like a Swiss clock.“ See paper in OSS 2006 (Lundell et al., 2006)

22. The Second International Conference on Open Source Systems Como, 8 th - 10 th June 2006 22 This research is funded by the European Commission via IST Project 004337, CALIBRE (http://www.calibre.ie) BUSINESS MODELS FOR OPEN SOURCE SOFTWARE : TOWARDS A MATURE UNDERSTANDING OF THE CONCEPT AND ITS IMPLICATIONS FOR PRACTICE DISCUSSION