Open Source Activity – Business Model or Charity? 4


One of the great strengths of Open Source software is that thousands contribute to it. Many of those do so for free and therefore receive no wages for the time spent on their contribution. Others can use that contribution for free and make or save money from it.

So for example an Accountant could make use of an Open Source spreadsheet programme and pay nothing for doing so. Is this fair? The Accountant will have saved money by not using a proprietary programme, the Open Source programme maybe more productive than the commercial alternative, and the Accountant will expect to be paid for the work they have done using the programme.

In the UK and elsewhere the prevailing Economic ideology is that a workers remuneration is directly linked to the skills they have. So a general scarcity of particular skills will generally result in higher wages being paid to workers with those skills. This is clearly not what is guaranteed to happen with Open Source Activity.

There is a danger that the more time someone spends on Open Source Activity the more they will suffer financially. So for example they may not be able to afford to buy their own home or pay into a pension scheme.

Some critics of the Open Source Community claim that its ideology is “communist-like” perhaps because it does not fit in with the prevailing “free market” ideology. The converse side of such an argument is that there are and always have been gaps or faults with the “free market”. For example a drug company might not invest in research unless it can obtain a certain level of Return On Investment (ROI) that ultimately its shareholders will expect from it. Those shareholders might not be too happy if they receive no dividend payout on their shares, because they need it for example to pay for their pension or the pensions of others.

In the above example of the drug company, Open Source Activity might mean that a gap is plugged to produce much needed medicine for distribution in third world countries at a price affordable to those countries. That activity by thousands of Open Source contributors could mean that a new technology or process is discovered to make this possible. This might be impossible for the drug company because it simply cannot afford to employ that amount of people and stay in business. It may however, like the example of the Accountant above, be able to make free use and therefore profit from Open Source Activity.

Mark Elkins


4 thoughts on “Open Source Activity – Business Model or Charity?

  • ptansom
    Open Source Activity – Business Model or Charity?

    This is a tricky issue, and when I was working for a large organisation things almost seemed clearer. In that situation we had a reasonable sized IT department with a fairly good skill set and it was easy to see that if we did work in house it would save paying outside companies to do the work. The naturaly way of IT people developing things is to want to discuss what they are doing and bounce ideas of other people. If you were allowed to do this cross company/organisation then the ideas bouncing and skill set would increase dramatically.

    That view on things is fairly simplistic though. It doesn’t account for smaller companies with no IT skills and leaves them at the mercy of the big IT support companies. This is where I am now, supporting those small companies, charities and education – as my tag line goes, being the IT department they couldn’t otherwise afford.

    Where I’m trying to differentiate myself here is by provide a true choice of solutions, and not just a few Microsoft based ones. This brings things round to the collaborative Open Source approach again. A small support company cannot afford massive R&D on product/solution offerings (which may be why so many just provide Microsoft offerings off the shelf).

    With Open Source software I can draw on other peoples work to boost my own offerings. In return I try to make sure that what I do with it is also made available to others. This clearly flies in the face of recognised business practices of keeping your improvements to yourself to give you a market edge, but when it comes down to it I just consider it a more open form of trading.

    Personally I enjoy the approach more, which probably means I’ll not be a millionaire any time soon, but I do get more satisfaction from my work. If you look at what has been achieved by the Open Source approach already it pretty much speaks for itself, however you try to explain it.

    I think educational establishments have a big part to play here too. Open Source certainly has solid roots there and has only more recently been noticed by business.

    With business being more open to sharing, education being taken as a sort of global think tank and individuals looking to showcase what they can do to potential employers, or for fun we seem to be doing pretty well so far

  • grahamoakes
    Open Source Activity – Business Model or Charity?

    To call it “Business Model or Charity” is a bit of a false dichotomy – charities have to have a business model too. Most charities working in third world development, for example, are struggling with the issue of “sustainability”, in the sense of building initiatives that can continue to operate and add value after the initial donor funding dries up.

    When companies looking at open source express concerns about support, it’s often because they’re concerned about this question of sustainability – “OK, this looks like a nice bit of software now, but how do I know that the developers won’t all have trouble paying their mortgage next month and so move onto something that helps them pay it?” Having a large pool of developers helps mitigate this risk, but that’s not necessarily enough to guarantee sustainability. For example, charities (at least all but the smallest ones) build continuity around their pool of volunteers by having a paid, permanent staff.

    If you’re interested in open source as the chance to develop your personal skills and write some interesting code (which is all fair enough), then this isn’t too important. If you’re also interested in trying to run an organisation using open source (either as user or developer of it), then this sustainability question is important.

    One of the things I believe the open source community needs to do is demonstrate that there are models whereby everyone can win – developers can contribute & get the kudos & freedom & etc they want; a sustainable support infrastructure can be built to give some assurance of defect fixing, product support and training, ongoing evolution, sales support, etc; and hence that people can safely commit to using the software when it provides a better business case than commercial software.

    Graham

  • dcorking
    Open Source Activity – Business Model or Charity?

    Graham,

    Surely open source software has already demonstrated itself sustainable; those who could benefit from it just need to educate themselves.

    In the worlds of proprietary (COTS) and custom software, it often happens that the developers cannot afford to pay the mortgage next month. Then you need to switch, or hope the source code was put in escrow. Then you yourself may need to find and hire the developer while the ink on their P45 is drying.

    Ask anyone who is afraid of unsustainability ‘How are the alternatives better than open source?’

    David Corking

  • dcorking
    Open Source Activity – Business Model or Charity?

    Graham,

    Surely open source software has already demonstrated itself sustainable; those who could benefit from it just need to educate themselves.

    In the worlds of proprietary (COTS) and custom software, it often happens that the developers cannot afford to pay the mortgage next month. Then you need to switch, or hope the source code was put in escrow. Then you yourself may need to find and hire the developer while the ink on their P45 is drying.

    Ask anyone who is afraid of unsustainability ‘How are the alternatives better than open source?’

    David Corking

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