Open source, altruism, and the business model problem

Open source, altruism, and the business model problem

Summary: While at an event called Blognashville over the weekend it dawned on me that many open source projects, and bloggers, share a very basic problem. Their business processes seem backward.

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TOPICS: Open Source
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While at an event called Blognashville over the weekend it dawned on me that many open source projects, and bloggers, share a very basic problem.

Their business processes seem backward.

Bloggers and open source projects often start with their own unmet needs. The bloggers want to be heard. Open source contributors want to use the result themselves. The producers, in other words, are also the consumers (not that there's anything wrong with that).

C. Daniel Batson

A business model works differently. A publisher starts with the market's needs in mind. What do people need, and how can I engineer a profit from it? That question becomes the engine that drives the train.

This backwards business process may be behind some of the contempt I sometimes read in the comments here for open source advocates.  Altruism is being confused with Communism.

All this might interest C. Daniel Batson (right, from a Science & Technology News interview last year). Batson's career is based on seeking empirical evidence for altruism.

Well, I got your evidence right here, Doc.  I also have an answer to the confusion over motives found on some posts to this blog (and in Microsoft's early attacks on open source).

Altruism, whether it comes from pure motives or because you see the benefits for yourself, is the act of free people. Communism requires sharing of everything only (in practice) some pigs are more equal than others.

In both open source and the blogosphere, business models are an option. IBM makes money. So do the folks running this site.

But altruism is an equally valid motive for participating in open source, or the blogosphere for that matter. Until recently it has been the dominant motive.

The question is whether, given all the money now pouring into the space, that will remain the case. The betting is it won't.

Place your own bets in TalkBack.  

Topic: Open Source

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12 comments
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  • Altruism vs. Cooperation

    Cooperation isn't always altruistic. As the "gain" of a system increases [1], it takes less and less in the way of reciprocity to justify sharing.

    For instance, open source is often compared to barn raisings. The problem with the comparison is that barn raisings are only beneficial at economy-of-scale levels (the interim investment is out of use for a shorter time.) As a result, the reciprocity has to be nearly 100%: your neighbors have to be pretty darn sure that you'll return the favor or the system breaks down.

    Open source, on the other hand, produces enormous amounts of net value for value input (high "gain") and therefor even a small amount of reciprocity (one contributor per thousand users, for instance) is enough to produce a net benefit and keep the system viable. Altruism, or faith, or blind optimism, are probably needed to get the ball rolling but at some point it becomes self-sustaining.

    How this applies to blogging, I can't say.
    Yagotta B. Kidding
  • Business models

    "In both open source and the blogosphere, business models are an option. IBM makes money. So do the folks running this site."

    But IBM makes money off of its hardware and from paid support of its various products. And this site makes money from advertisers. In both cases, there's still a business model.

    Carl Rapson
    rapson
    • Explanation

      The point is that IBM makes money from open source, so capitalism works in the open source space. ZDNet makes money from its blogs, so capitalism works in blogging.

      But most bloggers, and most open source programmers, seem motivated more by altruism.
      DanaBlankenhorn
  • Altruism is for Boy Scouts

    What drives open source is capitalism, not altruism. Business, not any warm fuzzies from giving something back to the world. Okay, the warm fuzzies are there anyway, but most open source developers are shaping a career for themselves besides solving problems that interest them. And business is finally catching up the OSS, not the other way around.

    Business finally has a clue that millions of separate businesses all paying millions of dollars for software that does the exact same thing is economic insanity. Just like millions of homes all having their own water system is insanity.

    Open source is more sustainable long term than the current commercial software market, which is broken.
    Chad_z
    • There's reality to what Chad says

      In the long run Chad may be right, that capitalism will be a more powerful open source motive going forward.

      But altruism has been important in bringing us what we have, just as it was in creating the Internet.
      DanaBlankenhorn
  • Open source Business Model

    I don't think that this is true now. Many open source companies do ask what customers want and how can they meet those needs.
    <A HREF="http://www.ingsoft.net">Oliver</A>
    hoiatl
  • What's Wrong With Altruism?

    I really don't see the problem with contributing to something that everyone can use and everyone can benefit from.

    I look forward to the day when such a thing migrates from the software world into the world of "hard knocks" so to speak, when people get it through their heads that we're all in this together, and that the sum of our efforts as a whole is far greater, far stronger, than the sum of efforts on a ?every man for himself? basis.

    The Open Source movement will be remembered for more than just making free software.

    We?ll be remembered for starting a movement that will change the world, for the better.
    CPA050507
    • Nothing Wrong With Altruism

      Altruism helped create the Internet. Altruism is behind blogging. Altruism lets democracy work, rather than having it be a mere contest among corporations. (No, it's not that, not always.)

      Altruism is a powerful economic force in our world, and I mentioned Babson to show you people are studying this force and taking it seriously.

      Thanks for writing.
      DanaBlankenhorn
  • Explaining the model and Maintaining the code

    It's simple...

    Explaining the Free/Open Source Model
    http://itheresies.blogspot.com/2004_03_01_itheresies_archive.html
    [i]In the last six years information technology vendors have adopted techniques and resources from two existing movements geared toward the construction of software. The newer open source movement, represented by the non-profit Open Source Initiative (OSI) corporation, emphasizes the licensing of software in a manner which encourages its collaborative development in an open environment. The older free software movement, represented by the non-profit Free Software Foundation (FSF), focuses on the ethical issues surrounding the licensing of software. The free software movement emphasizes freedoms which are often taken for granted outside of the field of software: the freedom to use, study how something works, improve or adapt it and redistribute.

    The Free Software Foundation offers two software license schemes which are compatible with their own goals and those of the Open Source Initiative: The GNU General Public License (GPL) and the GNU Library General Public License (LGPL). Essentially, the GPL and LGPL licenses grant the recipient extra rights than that granted by copyright law. Both licenses insure that a contributer or distributer of a GPL or LGPL licensed work may not further impede downstream recipients the rights granted by the same license. Many developing software in an open source manner have realized that this benefit offered by the GPL and LGPL licenses outweigh any potential losses. The licensing also insures that no contributing or distributing vendor or group of vendors could potentially monopolize the market, insuring that real market competition dictates price. Just as the automotive industry can commonize on standards for the production of the mechanisms of seats, instrument panels and doors while providing brand and regional differentiation across a wide array of models, the information technology community can collaboratively develop works under free licenses. Both vendors and consumers benefit from the resulting development cost reductions and competition from use of the resulting commons.

    The Linux operating system and many other opens source and free applications have been developed in an open source manner under free license terms. Despite free licensing and open source licensing requiring that the source code is freely available there are numerous profitable business models. Vendors can offer proprietary software for open source platforms and/or take a hybrid approach dual licensing the development of software. Vendors can select, customizing and configure free software, offering the bundled result. Vendors can offer support services. Vendors can also offer hardware which runs the freely available software. The resulting collection of hardware, software and services has been widely deployed as a server operating environment. Many vendors, from small one person operators to large multinational conglomerates, now compete to provide goods and services for the resulting platform. Linux has restored true free market competition to the server arena.[i]

    Maintaining and expanding the code = [b]reputation[/b]
    http://itheresies.blogspot.com/2005_04_01_itheresies_archive.html
    [i] The major commercial Linux distributions ( such as Redhat, Suze, Mandrake etc ) and bundling vendors ( such as openlogic's blueglue ) maintain a large number of open source software packages as part of their core products. The reputation each of these distributions is entirely dependent upon the quality and security of each component. All of the vendors apply patches to the software before compiling, so effectively they maintain the included packages for you. You can depend on the vendors desire to maintain their reputation to use the open source software they distribute.

    The difference with pure proprietary software is that either through a desire to do the right thing or because of the terms of the license, changes made by the vendors get distributed back to the open source software project developers. If you see that the original developers are including patches from the vendors or applying their own solutions to fix the same issues in a timely manner, then you can expect to trust that software project independent of the vendor platform.

    To a lesser extent, the same dynamics of reputation apply to "community" Linux distributions ( Debian, Gentoo ) and vendor "development" distributions ( Fedora ).

    At some point some open source projects developers may go in a direction that the distribution vendors and end uses may disagree with. It is the licensing which allows a fork of the project to develop that sets the open source development model apart from the pure proprietary development model. Apache, X.org and even the current version of the GNU GCC compiler toolset have been all derived from an outside fork of an existing open source project. No vendor or open source software developer can block development for any substantial period of time without the risk of the development being taken over by a descendant of the same project -- it's called evolution.

    Any so called analyst or even a journalist who covers open source software, that cannot grasp the above simple concepts must be lacking in either competence or integrity.

    - republish at will[/i]
    David Mohring
  • Everybody wins, nothing's forced

    That business model attracts a kind of intellect
    not easily available to traditional startups, but
    the big win for the users is freedom. Freedom to
    ship copies to their branches and across borders
    without having to fart around with licence
    servers. Freedom to tweak stuff to more exactly
    suit them. Freedom to not reinvent the wheel.
    Freedom to try stuff out without having to drop
    six figures to get started. Many freedoms.

    The traditional model has been to fence an idea
    off and charge admission. Sell people back meagre
    quantities of the freedoms we should all have.
    That will only work now in specialised
    situations, which is bad news for businesses
    unwilling to abandon the traditional model.
    leonbrooks
  • Subjectivism is not altruism

    Simply because the result of my self directed effort benefits the community does not make it altruistic. In fact, that the effort arises from self interest is enough to exlcude it, by definition, from being considered as altuism.
    paul@...
  • Right from the start to a fork and back again

    Right from the early days of Unix development and the founding of POSIX standards. i.e. "Portable Operating System Interface." Since those "early days" of computing when it became apparent that in order to have the ability to exchange a common business model "Application". An Open Standard needed to be created. Even the Operating system Unix which was assembled on a PDP-7 then PDP-11/20. Then rewritten in C which made it portable. By 1975 it began to be widely used. UUCP is the Unix to Unix copy protocol which made it possible for files to be transfered to another Unix. TCP/IP is an open standard. Linux and open source applications are based on the Unix standards like USG, CRG, Open/X now Open Group as well as IEEE, and RFC's ...ect. Open source can be certified though testing standards. There is an LBS standard for Linux and a Certified standard for Unix and in fact some Distrebutions are on the way to becoming Certified to Unix standards.

    The fork: The fork is the long story of the PC and the operating systems written for them. Software companies who write and market proprietary OS's and applications attempt to enforce a closed source standard. This is not good for any business model alone, as it turns out. In fact it sounds closer to Social communism. "This is the way you must do business"

    How it works: Open Architecture, Open Source and Open Standards. Nice fit huh? C/C++ an open source standard. Altruism is a personality thing. When it comes right down to it no matter what people are bloging. There has to be a Certified standard for any business model application. For security, support, and quality control and the ability to share files. I forgot to mention FSF and OSI also. This is all off the top of my head. This topic is huge! and long to explain. I say, fasten you seatbelt and get ready for some amazing open source business model applications! Dell just dumped $99 mil in Redhat, Novell and Suse, IBM and the huge Server models that run on Linux... on and on.. it goes everyday.
    Mike
    xstep