ANZCA update and Open Source Commercialisation

Hi from Adelaide, where the Australian and New Zealand Communication Association (ANZCA) is having its annual conference. It’s been great to catch up with people (however briefly) and to hear some interesting papers. I’ll be posting the story attached to my paper some time tomorrow. The paper itself I’m submitting to the Harvard Business Review in a couple of weeks.

Another paper I’ve completed but am yet to find a source to publish is an update on Open Source Commercialisation. Any ideas for a spot to publish would be appreciated! In the meantime, I’ve included the full paper in the extended entry of this post.


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Commercial versus Community in Open Source

On 30 June 2006, Red Hat finalised its acquisition of JBOSS, a professional open source development community and producer of a popular application server among open source developers. The deal was more comfortably accepted by members of the open source community after an uneasy discussion with Oracle Computer Systems earlier in the year, who wished to enter into an uneasy mix of proprietary and non-proprietary system development in the technology sector, apparently in the interest of selling more proprietary products. Oracle Computer boss, Larry Ellison had discussed the Oracle interest in JBOSS, openly declaring that open source communities attracted developers, and more developers could lead to more sales of Oracle products. The distinctly commercial objective produced strong and negative reactions among the purists of the open source community. Participants in representative open source communities threatened to sabotage the outputs of the community, arguing that such commercial or partly commercial actions were antithetical to the fundamental philosophy of open source. But the supremacy of Red Hat in the JBOSS acquisition will arguably be premised upon a similar business model. And the community members of JBOSS or indeed any other open source community do need to accept that commercialisation is not necessarily as evil a concept as may at first be apparent.

Open source as a concept is based on shared information and collective wisdom in software development. By releasing the source code of a development platform, applications and functions can be created and shared among users. This is an application of the network effects model; the more widely a platform is adopted by a user base, the greater the value it has for all users. In the Free Software movement, the methodology was described in related literature as ‘free as in free speech, not free as in free beer’ – essentially the movement was associated with opportunities for accessing content and the notion of providing functional software in the public interest, rather than for commercial gain. In an era where technology and software were no longer a competitive advantage but crucial for business, the free software movement was designed to maximise access to functionality, and capitalise on the expertise and creativity of programmers working collectively on code bases to improve functionality. The phenomenon was in a true sense, an example, of a gift economy – reciprocal altruism based on the betterment of a community.

However, celebration of the gift economy aspects of free software were quickly absorbed across the entire open source sector, and this led to mass ignorance about the nature of open source as a practice, rather than necessarily implying free software outputs. In 1999 Eric Raymond released ‘The Cathedral and the Bazaar’ as an exploration of the open source development, saying that the egoless programming in a bazaar environment – rapid and chaotic, but ultimately open and less elitist than ‘Cathedral-style’ (or ‘closed-source’) research and development – produces better quality outputs than Cathedral programming because it facilitates a higher order of magnitude of skilled time to any problem. But importantly, Raymond does not believe that open source development is necessarily morally superior to Cathedral programming. The fundamentalist perspective of open source as moral imperative evolved not because open source advocates were calling their hacker-developers to arms, but because the notion of the gift economy was poorly understood by open source community members. In essence, there developed a committed and invested community of open source users and contributors who had moved from interpreting the model of open source as merely a pragmatic process, into a distinct philosophy of public interest software development.

The rhetoric of the gift economy has been the primary problem with perceptions and understanding of open source as a business strategy. Because base code is released as open source, there developed a belief among some participants in the open source culture that all derivatives of an open source code would be subject to the same reciprocal altruism principles that applies to the base code within the context of an open source community network. But this blanket interpretation of open source is naïve. While participation in an open source community may be altruistic and premised upon a common and sharing-oriented future, the same may not be true of the code itself, or derivatives thereof. Assuming that open source is all about the code and not about the process of collective application development is a crucial flaw in arguments about open source as free software; the code itself is still subject to the licence operating within an open source community, and where no clear licence is articulated, the participants in an open source community can find their work appropriated by third parties, adapted – perhaps even, without attribution – and sold as a commercial product without there being any financial reward for their intellectual contribution. And instances of such commercialisation of open source outputs have been the cause of serious and litigious conflict. Indeed, the very notion of appropriating open source applications for a commercial package has been reported as essentially betraying the interests and philosophy of the networked society.

At the end of June in London, Sun Microsystems chief open source officer, Simon Phipps told the audience of an international Open Source Business Conference that the future of the open source sector was dependent on ‘connected capitalism’ and not ‘free software’. The critique was valid: for too long the phenomenon of open source has been shrouded in confusion. The ideals of the free software movement have pervaded the mindsets of developers from open source communities, without there being any true obligation for open source developers to make all works created within an open source community to be made available for free.

There is a great deal of uncertainty in the open source community in relation to code ownership and application ownership. And this is where Creative Commons licensing should (but so far hasn’t) made an impact. Among open source community members, the integrity of open source is paramount. For the majority of open source developers, where source code is released in an open source manner, all applications developed on the basis of that code should be shared by all possible users, for free, for all eternity. The ‘business model’ (if you can call it that) is that open source produces a great number of applications and the quality of those applications improves over time, thus reducing cycle times for interactions and improving business productivity, lowering risk. But, as most venture capitalists would say, ‘there’s nothing in it for me’.

Entrepreneurs thinking about the realm of open source are studying the communities and tool development, seeking opportunities for commercialisation. For these entrepreneurs, and for open source developers wishing to protect their territory, the possibility of developing applications under a ‘some rights reserved license’, should probably be considered. An exercise of this is where a developer uses open source code to develop an application, but understands that their application could be repackaged and sold commercially. The best example of this (though from a rather unusual source) is the Everquest phenomenon, where users created objects within the Everquest environment, released those objects in to the Everquest environment, and Sony reserved the rights to use those objects in future releases and updates to the game. In the case of Everquest, there was occasionally recognition of the input of users I developing these objects either through discounted subscriptions or by-lines. On no occasion was it suggested that users should be paid a % of profits from this repackaging. However, that could be a model for other businesses.

The open source community is probably very well aware of the slow march of commercialisation in to the open source community, and thus far the usual response has been to resist it with shields of outrage. But increasingly, it may be necessary to explore Creative Commons opportunities for applications built on open source codes. The cultural of participation in open source communities is not threatened by Creative Commons, and indeed permits much more explicitly, attribution for intellectual input of developers. And under Creative Commons, the base code itself will never be ‘owned’. But the functionality, look and feel and data services improvised through applications built on open source codes may well offer many opportunities for commercialisation. So while an open source community may have provided the conditions for development of such applications and services, the result is more of an example of connected capitalism than the gift economy.

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