Written by: Paula Hunter
6/17/2010 1:37 PM 

Speaking with Stephen O’Grady of RedMonk the other day, it became clear that we are still far away from a perfect understanding of the value of open source, particularly for non-software companies which often consume open source but do not always contribute back to the community.

Examples of non-software companies that consume open source are many - Facebook, Twitter, Amazon come to mind. And, to some extent, Google. These companies generate revenue from advertising and retailing, or they don’t have a real revenue model yet; but they don’t make money differentiating on infrastructure - in other words IT is not a part of these companies’ products or services, it’s just a way of delivering their value. Consider the notorious lack of stability of the Twitter platform - no way that’s a money machine. Nevertheless companies rely on its platform to get things done, and in all of the above cases open source is a significant part of the mix.

Yet none of the aforementioned companies is fully committed to contributing back to the OSS community in the way that Intel or IBM, for example, contributes.

Nevertheless Twitter, Facebook et al have been able to achieve traction quickly because they didn’t have to build their platform from scratch. They took open source and used it to power an idea, saving development dollars to focus on their idea - their competitive differentiation. Sure, they made adjustments to the code they used to support their core businesses. But were those adjustments and changes all critical differentiators?

O’Grady makes a good argument that the future of development is differentiation, while cautioning that not all software is a core part of a company’s value. This argument leads one to the realization that it is possible to contribute to OSS, and achieve differentiation, without losing IP or value - in fact, you can increase your value. Here are a few ways:

• Contribute a non-core project - e.g., Google contributed Google Map Reduce - to the community. An immediate benefit: lots of young developers used the software, creating a great pool of smart applicants for roles within Google. The company not only got people to use its stuff - much as Bell Labs did when it gave early versions of UNIX to universities - it pretty much tied up the market for that functionality.
• Look at your software development lifecycle to discover where opportunities for differentiation exist, and avoid using in-house development resources for development tasks that do not differentiate, instead using OSS from one of the many great projects out there. Then contribute your work back to the project you’re using.
• Work with external expert resources to explore the IP ramifications of contributing code back to the OSS community. There are many foundations - Linux Foundation, Eclipse, Apache, OSI and the CodePlex Foundation - that can help clarify the contribution process.
• Determine the level at which you are comfortable participating in OSS - consumer, producer, contributor - and then expand your comfort zone.
• Increase your understanding of the cost/risk/value calculation at the heart of contributing back to open source. Cost may be an issue; legal matters may seem constraining; value may be difficult to measure. Again, participation through an open source foundation will bring clarity and reduce confusion.

Some would say that at the most basic level, the value of using open source lies in avoiding costs by not re-inventing the wheel; we would counter that open source development is faster, adds more features and results in higher quality code in less time. As Mr. O’Grady has observed, OSS gives companies a new way of looking at doing development. Rather than create a custom infrastructure, choose an OSS platform and differentiate on applications or APIs - wherever your value to the end user of your products or services exists. Focus on your differentiation and use OSS as a short cut to value. And don’t forget to contribute back. The real value of OSS is the strength, diversity and creativity of the community.

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Categories: Open source, Software development, Intellectual property, Corporate

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