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Will Geoghegan

Will Geoghegan Open Source- a new model for innovation?

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Will Geoghegan

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  1. Will Geoghegan Open Source- a new model for innovation?

  2. Open source software has the potential to fundamentally change the economics of the computer software industry. It will affect how traditional software firms structure the incentives that they provide to their programmers, the product markets in which they compete, and the business models and strategies that they use. It will also impact on the career choices of software developers, and provides an additional means for potential programmers to enter the software industry. (Schiff, 2002)

  3. What is Open Source Software? • “a decentralised form of production in which the underlying programme instructions, or ‘source code’, for a given piece of software are made freely available. Anyone can look at it, modify it, or improve it, provided they agree to share their modifications under the same terms” (Von Krogh, 2004) • Must comply with conditions set out in: • http://www.opensource.org/docs/definition.php

  4. Source Code • What is Source code? • the raw instructions that determine how a program works • Source code vs. Binary Code • Source Code not given out to users or general public as proprietary companies want to protect their IP. • OSS share their code with any interested user.

  5. Reasons for increased interest in OSS • The rapid diffusion of open source software – dominant product categories • The significant capital investments in open source projects • New organisational structure (Lerner and Tirole, 2002)

  6. History of OSS • Early 60s to early 70s • The computer programmers of the universities and research labs of the 1960s and 70s willingly shared programming code. • Early 80s to early 90s • Richard M. Stallman, who coined the term “copyleft,” left MIT in 1984 and began the Free Software Foundation • Early 90s to today • Linux

  7. Motivation to participate? • “I don’t know who these crazy people are who want to write, read and even revise all that code without being paid anything for it at all” (Glass, 1999) • Altruism? • Art form? • Programming is fun? • For the intellectual challenge? • To make a political statement? (Bonaccorsi and Rossi, 2003; Schiff, 2002 and Perkins, 1999)

  8. What motivates programmers? • A programmer participates in a project, whether commercial or open source, only if she derives a net benefit (broadly defined) from engaging in the activity.

  9. Benefits gained • Immediate Benefits • Monetary compensation if working for a commercial firm • Improve performance towards primary mission endowed by employer • Enjoyability of tasks • Delayed Benefits • Career concern incentive • Ego gratification incentive (Lerner and Tirole, 2002)

  10. Open vs. Closed source incentives for programmers • Edge for commercial companies as they generate revenue and therein are able to offer salaries • Open source can lower cost to programmers through: • Alumni effect • Customisation and bug fixing • Delayed rewards • Better performance measurement • Full initiative • Greater fluidity

  11. Why do programmers contribute to OSS projects? • IT problems • Stallman and Xerox printers • Reputational benefits • Lerner and Tirole (2002) point to the Apache project, highlighting that many people have received jobs out of being recognised on the website • Stepping stone for access to venture capital • Sun, Red Hat & Netscape

  12. Licences

  13. OSS vs. Other Software

  14. OSS vs. Other Software • Innovation necessitates the source code • OSS empowers • Clear demarcation between role of author and user (Proprietary) • Vs. • Large pool of producers and little distinction between developer and consumer (OSS) • The OSS system is predicated on an interactive relationship with the user. (Krishnamurthy)

  15. Pros of OSS • Free • Large developer and tester base • Peer review • Flexibility of use • Customer support from a community • Reliability

  16. Cons of OSS • Version proliferation • Appeal to high-end user? • Marketing • Yet to attract makers of desktop applications i.e. need remain for a windows machine

  17. Business models from OSS

  18. OSS as an example of Open Innovation

  19. Project 2 Graceful exists and foregone opportunities

  20. Questions to discuss? • “Open source is an intellectual property destroyer” (Microsoft VP Jim Allchin) • Is good enough….good enough? • Can the open source ethos flourish in other industries? • Will open source change the façade of the software industry? • Can the ideals of OSS be applied to Open innovation or vice versa?

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