The Economic Motivation of Open Source Software: Stakeholder Perspectives by Dirk Riehle

Summary:

- Open source isn’t just about lower costs for consumers, it is also a sound business strategy for developers.
- Open source software is generally free, easily changeable, and open to free copying and distribution.
- There are two types of open source software:
- Community open source
- Group collaboration, development, and change
- Volunteers create and change
- Example: Apache Web server
- Commercial open source
- Created by a company for-profit
- Company controls changes and updates
- Example: MySQL
- There are a variety of reasons that people contribute to open source projects such as skill building, personal gratification, creating a reputation among developer peers, etc.
- Open source allows companies flexibility in pricing of their products.
- Open source software can often complement other paid products or services delivered by the same company, and can allow companies to charge more for these products.
- Community open source software means that no one corporation can control pricing, but rather that this is dictated by larger market forces.
- Most of the costs involved in traditional software arise due to initial development. Open source software is much cheaper as much of the development is done for free or very low costs.
- Community open source removes barriers to market entry for smaller organizations due to smaller start up costs.
- Open source organizations can make profits from alternative channels such as provision, maintenance, and support.
- Traditional software organizations attempt to maintain market share through intellectual property protection, complex products, and/or customer data lock-in.
- Commercial open source software is often available for free to nonprofit users.
- While commercial open source software is similar to community open source, in this model the controlling company must still do much of the initial development.
- Open source service firms use the open source model to provide support, training, and development services.
- There are different types of contributors to open source projects, and developers are promoted through a communal process as they demonstrate their commitment to a project. Riehle refers to these developers as ‘committers’.
- Employing committer open source developers is beneficial for a company since it allows for faster solutions to software problems, a better alignment of company strategy, and greater visibility among the developer and user community.
- Committer open source developers earn a higher salary, and have significant power with their employer due to their high degree of visibility.
- More common than starting their own project is for developers to join an existing open source project in an attempt to be promoted within the developer community to a committer level.
- Multiple allegiances between traditional paid employment and open source projects means a more fluid job market and developers moving regularly into new positions.