Saturday, February 10, 2007

Kerala's draft IT policy released

THIRUVANANTHAPURAM: The draft information technology (IT) policy released by Chief Minister V.S. Achuthanandan here on Wednesday proposes to make Kerala a cradle of knowledge workers. It aims to upgrade the productivity, skill and knowledge levels of the citizen.

Proposals include establishment of an International Centre for Free Software and Computing for Development, ITES Training Centre (in Kochi) and extension of Internet to all educational institutions and villages by 2010. Around 3,000 broadband-enabled information hubs called Akshaya e-Centres will be set up in difference parts of the State.

The Government will support private initiatives to set up IT parks. Private IT parks that meet a minimum set of standards shall be promoted by the Government as an integral part of the State's IT infrastructure, if the parks desire so. The Government will expand Technopark in Thiruvananthapuram and Infopark in Kochi on its own accord and in partnership with private infrastructure providers. Focus areas include e-governance, free software and development of appropriate technologies. The State will network with national and international organisations and industry for research and development in Information and Communication Technologies (ICT) and knowledge sharing. The proposed Centre for Free Software will focus on developing technologies relevant for social and economic advancement in developing countries.

The policy stresses that Free and Open Source Software (FOSS) will be used in e-governance projects. Open standards such as Unicode and Open Document Format and Open Architectures will be followed in e-governance projects to avoid total dependence on select vendors. The Government proposed to develop the State as the FOSS destination in the country. It will provide special incentives to companies developing FOSS. The policy says that the State will try to make maximum use of ICT in governance. Taking the Right to Information Act in its true spirit, the Government will take up ICT-enabled programmes for efficient flow of information between citizens and the Government.

The Government will make use of all the media tools and emerging technologies to ensure proper communication between the Government and the citizen. The Government will promote the use of Web sites, e-mails and other news communication facilities in various Government and semi-Government organisations.

Wednesday, January 24, 2007

Tamil Nadu (India) may shut door on Microsoft

Chennai, Dec. 31: The Tamil Nadu government, which is on a fast-track pushing the state to the top in the Indian IT sector, has almost shut its door on the software giant, Microsoft, preferring the Open Source Systems (OSS) for reasons of costs and easy migrating capabilities.

“Initially, 99 per cent of government systems have been running on Microsoft systems but then 2007 will be a watershed year for the state IT sector. We are fast migrating to Linux operating systems which are so much cheaper and can be operated at low cost, besides offering continuous updates and freedom from viruses,” says Mr C. Umashankar, managing director of state-owned ELCOT, vested with the responsibility of overseeing such ambitious government projects as e-governance, enumerating the beneficiaries of the free TV scheme, family ration cards and the free sari-dhoti distribution.

“We have already dispatched 6,500 Linux systems to village panchayats and another 6,100 Acer desktop systems with Suse Linux operating systems are on their way. We are procuring 20,000 desktop systems for schools, which will run only on Suse Linux. Remaining 30 desktop systems will also migrate as and when the new machines arrive,” Mr Umashankar told this newspaper.
He said all the ELCOT servers were on Redhat Linus and the government IT company’s 28-seater software development wing was fully on Suse Linux.

“We will train over 30,000 government officials in Linux Operating Systems and Open Office. A contract has been already finalised with the government departments and we have set up a Linux support centre with two Linux-certified professionals to assist the state officers. This number will go up to ten or more in 2007, which will be a path-breaking year for government on migration to Linux Operating System,” Mr Umashankar said. “India can live without Microsoft packages and even progress but Microsoft will find it tough without a huge country like India buying their software packages,” he said.

He said a top official from Microsoft India had met him twice to convince him to continue with MS products. The official offered the XP operating system for about Rs.7000 while he quoted Rs.500. “I explained to her that for a mere Rs.300, I could get the entire operating system, office productivity software and a wide range of utility tools, such as DVD/CD writing software, database software, multimedia editing software, vector map-drawing software plus a whole range of software development tools. Also, I have the option of downloading this entire package in DVD media and not even pay that Rs.300, which is the media cost and not the software charges,” said the ELCOT chief, an IT expert himself besides being a senior IAS bureaucrat.

He said he had also pointed out to the Microsoft official that MS Office did not allow saving of documents in open document format. While it was possible to open all MS Office files using Openoffice.org, the vice versa cannot be done. “I asked her why ELCOT should buy such an inferior product when
Openoffice.org is available free of cost for Windows as well as Linux.

She said Microsoft are working on open XML format,” he added. Mr Umashankar said he had written to state finance secretary enumerating the “huge financial and working advantages” of shifting to Open Source Environment in all government departments. “I have been receiving great support from all the senior IAS officers here, from the chief secretary downwards. It is very encouraging.

ELCOT is not the loser when Microsoft did not accept our price of Rs.500; on the other hand, Microsoft loses out due to our big volumes involved,” he said.
“There is a gross misconception among the governments and officials that if they migrate to Open Source platform, Microsoft would get angry and the entire software industry could come to a grinding halt. This is totally misplaced fear,” Mr Umashankar said.

“Within the next five years, it is going to be the IT services which would dominate the revenue share of the IT companies, because more and more users, governments and the corporate sector have started migrating to OS software, thus removing the scope for more revenues from products. It is time that the users understood this scenario and start saving their precious revenues,” Mr Umashankar said.

Talking of the changes happening in this direction, he said he had ordered 43 rack servers for ELCOT to host various government applications. “All the applications are to run under OS software. I would have paid Rs.20 lakh per server if I had adopted proprietary software but now I have saved over Rs.8 crore from this one transaction.

We intend to procure 1000 servers in the next two years. Imagine the amount of savings we are getting out of this,” the ELCOT chief said. “In my view, a state government of TN magnitude would be able to save Rs 200-500 crores every year, when the National e-governance action plan gets implemented,” he said, adding that school children too could get the benefit of “more robust, secure and economical Open Source software for their work,” he added. “Today, there is more demand for OSS trained engineers. I require at least 500 trainers to train 30,000 state officials across Tamil Nadu in the next six months.

Tuesday, October 24, 2006

MAVERICK RICHARD STALLMAN KEEPS THE FAITH

When Richard Stallman gave Bill Gates the finger in front of Stanford's computer science building, I got nervous. No, it wasn't the real Bill Gates -- it was just his name, engraved in giant letters over the main entrance to the 2-year-old, Gates-funded building. But it didn't seem like a Stanford thing to do. The campus is immaculately manicured, dotted with picture-postcard palm trees and squeaky-clean students. It's just not a flipping-the-bird kind of place.


It didn't strike me as a Richard Stallman kind of place, either. Stallman is a legendary hacker, the founder of the free software movement, a MacArthur "genius grant" recipient and a programmer capable of prodigious exploits. But on this day in Palo Alto he looked unkempt and off-kilter. I had already spent a good part of the afternoon watching in bemused silence as he painstakingly examined his long, stringy brown hair for split ends. I was also mesmerized by his piercing green eyes, radiating the power of an Old Testament prophet. I feared his wrath.


We had come to Stanford in search of a place where Stallman could download his e-mail. Two hours away from catching a long flight to New Zealand -- partly for vacation, partly to continue proselytizing his free software "mission" -- Stallman was jonesing for one last connection to the Net. Being Richard Stallman, he figured he could just drop in on the computer science department at Stanford. He hadn't visited for several years, but he was good friends with equally legendary Stanford professor John McCarthy -- the man who invented the Lisp programming language and coined the term "artificial intelligence." Stallman himself programmed the multipurpose Emacs editing tool, a kind of nuclear-powered Swiss Army knife favored by top-notch programmers and computer scientists. Surely some Emacs acolyte would be delighted to help the one and only Richard Stallman grab his e-mail.


First we tried to sneak in through a side door of the Gates building. Over a lunch of ribs, duck, trout and popcorn shrimp at Palo Alto's MacArthur Park restaurant, Stallman had told me that he didn't despise Bill Gates as much as other free software guerrilla fighters do. But he clearly wasn't eager to legitimize Gates' stature by walking submissively through his totemic gate. Free software and Microsoft don't mix. There had to be a better way.


Except there wasn't. The path to McCarthy's office from the side door entrance was obscure. We sucked in our guts and headed for the main gate.


"Hey," Stallman called out to a graduate student opening the door in front of us, "is it the tradition here to give Bill the finger whenever you go through these doors?"


The student looked over his shoulder, twitched a nervous smile and disappeared inside. Stallman shrugged -- and right there on the spot decided to start his own protest movement. As we entered the building, out came what the ancient Romans used to call the "digit impudicus." Stallman flashed me a sly grin. I glanced around, looking for security.


Over the course of about half an hour in the building, Stallman encouraged three other people to join his campaign. No one signed on unreservedly, but two recognized him right away -- one from a conference some six years earlier and another from his picture in a recent Forbes magazine article celebrating the surprising commercial success of the free software (or, as it is now more commonly called, "open source") movement.


Would the movement to deride Gates have as much success? Stallman didn't know and didn't care. As he pointed out to me repeatedly through the course of our afternoon together, he doesn't do things because they are socially acceptable or strategically appropriate. Success is not his measure for accomplishment. He does what he does because he thinks it is the morally correct, or simply fun, thing to do. And he brooks no compromise.

Monday, July 24, 2006

The Challenge of the Multi-site Nonprofit

Why is it more difficult for nonprofit organizations than, say, retail chains, to run efficient multi-site operations? A recent Harvard Business Review story concluded that nonprofits waste $100 billion a year through inefficient fundraising and dispersal practices and clumsy administrative operations.


The problem, according to Harvard Business School professors Allen Grossman and V. Kasturi ("Kash") Rangan, rests in inevitable tensions and battles for power that arise between national headquarters and local operations.


Not helping the problem is the fact that many nonprofits employ management techniques developed for for-profit companies. "We say this is not a good approach," said Grossman. Instead, nonprofits need their own management practices that recognize the unique characteristics of the nonprofit enterprise.


Grossman and Rangan presented their findings—and some possible solutions—at the Faculty Research Symposium held at HBS on May 20.


Whether a particular nonprofit organizational structure favors central or local control, inevitable tensions develop between national headquarters and local operations, Grossman said. These disputes often result from the unique characteristics that differentiate them from for-profit concerns:
The real value creators for nonprofits are the dispersed units, where money is raised and good deeds accomplished. With for-profits, headquarters is usually where the value is created.
A constant power struggle takes place between local and national leaders.
Wide use of volunteer labor makes worker motivation more of an issue.
Up to 60 percent of a nonprofit CEO's time is spent fundraising, time that could be spent building a more effective organization.
The strong emotional environment around nonprofits can challenge rational decision making.
Nonprofits often have a cultural opposition to structure.
A lack of theory of management practice exists for nonprofits.


These characteristics lead to a number of disputes between headquarters and affiliates, according to Grossman and Rangan. For example, who controls the donor list and money raised? Is it the affiliate that actually raises the funds, or the national organization that provides the overall brand and direction? Are affiliates delivering the level of service defined by the national organization? Does the affiliate adequately represent the values and goals of the national brand? Do affiliates receive an appropriate level of national services from the fees they pay?


Traditionally these strains have fueled centralization versus the decentralization debate in the nonprofit community, Grossman told his audience. And that's the wrong approach to take—the value proposition created by a national organization with local units is lost. Instead, the debate should be reframed with autonomy and affiliation as the key dimensions.


In their research, Grossman and Rangan looked at the system behaviors of five nonprofits: Outward Bound (where Grossman once served as CEO), Planned Parenthood, Habitat for Humanity, SOS Kinderdorf, and The Nature Conservancy. Each was mapped on two dimensions—one that exerts forces toward unit autonomy and the other influencing the degree of organizational affiliation. (The Nature Conservancy and Habitat for Humanity were the highest affiliation organizations; Planned Parenthood and Outward Bound were high autonomy organizations; SOS Kinderdorf ranked lowest on the autonomy scale, and about in the middle for affiliation.)


The point isn't whether an autonomous-biased organization is better than a more affiliate-driven one, but rather to identify "levers of influence" system managers can employ to get their organization the desired balance between the two forces.


"Headquarters should undertake actions to enhance system value and then sustain it, and affiliates should maximize local resources to enhance their credibility and increase their voice in the running of the system," Grossman and Rangan wrote in a working paper on the subject. "The key for management is to develop a governance system that accommodates this tension in a constructive rather than a destructive fashion."


To get constructive co-existence of unit autonomy and organizational affiliation, organizations must have in place a clear process for making decisions as to who will perform the functions necessary for the system, and a process that commits operating units to adhere to systemic decisions.


At the seminar, Rangan cautioned that there is no single cookie-cutter approach to solve the problems of all nonprofits. For example, if a meal kitchen has 100 strong, local operations there is little need for national people to come in, other than to provide a few services.


Among their conclusions, Grossman said, are:
A multi-site nonprofit's value proposition must be real, and consistently communicated externally and internally.
Strong unit autonomy and strong systems can be compatible and mutually supportive.
Lack of understanding of multi-site dynamics leads to a waste of money and resources.


More research is underway on several issues. To what degree are corporate structure and strong unit autonomy incompatible? How much strong national leadership is required to complement local program customization? And how important is national leadership in determining the success of a multi-site nonprofit?

Saturday, June 10, 2006

VMWare - Virtualization

VMWare - Virtualzation the new business model for Low cost virtual machines

Friday, March 24, 2006

The Secret of How Microsoft Stays on Top

Perhaps no technology company outside of IBM has been able to keep on top of the industry as much as Microsoft. What's more, Bill Gates & Co. have achieved this success during times of incredible technological transformation, usually just the period when titans are vulnerable to being knocked off by disruptive technologies.


To understand the way Microsoft manages IP, you have to go back to the roots of the company. Back in the late 1970s, its first products were aimed at helping other programmers develop applications for the computing hardware of the day. It focused on developing programming platforms, in contrast to most other firms who focused on stand-alone applications. It was an approach that permeated both their tools business—the software they provided to other programmers for developing applications; and the operating system business—the software upon which these applications would run.


It was during these early days that Microsoft began to invest in creating libraries of programming "components": building blocks of intellectual property that could be used to develop different software applications. The original impetus was the need to provide programmers with pre-defined interfaces through which they could access commonly used functions and features. Why reinvent the wheel if someone else had already worked out what it should look like? In essence, Microsoft began codifying knowledge and embedding it in a form that could be leveraged, both by itself and others. But it got to decide which components to "expose," and which to keep hidden, providing a mechanism through which its core intellectual property could be protected.


As the company expanded, Microsoft formalized this component framework and developed a "programming model" to go along with it—in essence, defining the way that applications should interact with its preexisting software components. It extended the model to its application business, sharing increasing amounts of code between products like Word and Excel. Over time, as more and more partners signed up to use the model, developing applications for Microsoft's operating systems and using Microsoft's tools in the process, the power of the platform became evident. It was a win-win relationship—the community of development partners received benefits in terms of enhanced productivity, while Microsoft's position was strengthened through the deployment of products that were complementary to its own. This made it tough for competitors. They were not just going head-to-head with Microsoft's products—they were also competing against the repository of knowledge accumulating in Microsoft's component libraries.


By now, you will see that Microsoft was building a rather unique resource. Its approach to software "componentization" allowed the firm to leverage intellectual property across multiple product lines. And it also made it attractive for third-party firms to leverage Microsoft's platform, as opposed to others. But how did this allow the firm to respond effectively to technological change? First, it had an established base of knowledge that could be brought to bear on newly emerging opportunities. Second, it had a well-defined process through which new intellectual property could be codified and integrated into this knowledge base in a way that ensured compatibility with its existing components. And third, it established processes to evolve this knowledge base to ensure it reflected changes in the broader technological context. For example, the programming model was updated in the early 1990s to reflect the increasing use of networks. Then later in the 1990s, Microsoft once again began "re-architecting" its component base to facilitate the delivery of "Web services," applications that can be activated remotely over the Internet.
Only once in fifteen years did Microsoft products fail to win more than 50 percent of these reviews.


Putting this all together, we see that much of Microsoft's long-term success can be attributed to investments that have created "dynamic capabilities" for responding to technological change. These investments include: the process of software componentization through which it captures and embeds intellectual property in an accessible form; the component libraries that result from this process, which form a vast repository of knowledge that can be leveraged across its product lines; a programming model that allows developers, both inside and outside the firm, to access these components through well-defined interfaces; and the process through which both its software components and programming model are updated to reflect developments in the broader technological context.


Microsoft has been criticized as a company that relies more on predatory tactics than great products and innovation to succeed. What can you say about Microsoft's product development performance over the years?


We analyzed the development performance of Microsoft products for the past fifteen years. Our aim was to come up with an objective measure of performance—one that was unrelated to arguments about market power, monopoly position, or predatory tactics. This meant we excluded any consideration of measures like market share or profitability, and focused instead on the ratings given to Microsoft products by independent reviewers. We found that Microsoft products were consistently rated highly when compared to competitive offerings, a result that held true across different product categories and over time. On average, Microsoft products "won" more than two-thirds of the competitive reviews we examined. Indeed, only once in fifteen years did Microsoft products fail to win more than 50% of these reviews. Given the number and diversity of competitors they faced in each different product category, this consistently high performance is striking.
When developers find attractive alternatives to Microsoft technologies as they did when the Internet first emerged—it's not long before the tools division starts to hear about it.


We also evaluated Microsoft's response to a "technological transition"—a major change in the industry that required the firm to rethink its strategy. We chose to examine the rise of the World Wide Web, given that this transition brought about the rise of a new product category—the Web browser. Microsoft therefore needed to develop a product based on technologies with which it had little previous experience. Our analysis focused on Microsoft's first two internal browser development projects, comparing their performance to a sample of Internet software projects completed at the same time. We discovered that Microsoft's projects exhibited significantly higher productivity than the sample average. Furthermore, we found that the resulting products were rated as equal to or higher in quality than competitive offerings. These results often surprise people, given the perceived wisdom that incumbents have difficulty responding to major technological changes.


Microsoft was originally late in its embrace of the Internet. Yet Bill Gates was able to quickly change strategy to allow the company to become a top competitor in selling Internet-related technologies and services. How did Microsoft accomplish this?


 In any industry subject to rapid technological change, a firm faces two big challenges. The first is in recognizing the threats (and opportunities) presented by newly emerging technologies. The second is in mounting an effective response to these threats. Microsoft appears to have solved these problems, giving it the ability to quickly adapt to changing circumstances. The way they have tackled each however, differs in nature.


In terms of recognizing potential threats, Microsoft has built-in "sensing" mechanisms to keep abreast of what is happening in the broader technological context. Much of this ability comes from their tools division, which tracks the needs of the many developers worldwide who write for Microsoft platforms. When these developers find attractive alternatives to Microsoft technologies—as they did when the Internet first emerged—it's not long before the tools division starts to hear about it. You also have to realize that Microsoft has several thousand developers inside the company who are constantly examining the potential of new technologies—"lead users" if you like. When all these sources start telling you the same thing, it's hard not to pay attention. Even if it takes a while to work out exactly what should be done.


In terms of responding to potential threats, Microsoft consistently plays to its strengths—its overall platform strategy, its existing knowledge base, and its process of componentization. For example, when developing the new Internet Explorer browser, the development team opted to leverage its existing programming model, despite the fact that this would initially slow the project down. From this point on, competitors in the browser space faced a formidable challenge—they were competing not only against the Explorer team, but also against the continual improvements made to Microsoft's underlying platform over its many years of existence.


What should company leaders everywhere take away from your research in terms of how to compete in the middle of a technological revolution?


Our research highlights two major themes. The first is the importance of taking a proactive approach to managing the development of a firm's intellectual property. We're not talking about patenting strategies here, but rather the set of processes that contribute to building and evolving a firm's knowledge base. These processes fall into four categories: creation/codification; integration/assimilation; application/exploitation; and evolution/adaptation. Inside Microsoft and other successful firms we've studied, managers give careful consideration to how each of these activities is conducted. In doing so, they pay explicit attention to the way these activities interact with processes that leverage the resulting intellectual property assets (e.g., product development).


The second theme that emerges from our work is the importance of architecture. This theme emerges at multiple levels—in the design of Microsoft's products, its platforms, and its intellectual property. At the product and platform level, the key idea is that in today's networked economy, no firm can remain an island. Technological innovations are increasingly brought to the market by networks of firms, each focused on only specific pieces of the overall puzzle. Competition takes place both between competing platforms and between products that build on top of these platforms. Managers must therefore make explicit choices about the technology architectures they adopt, deciding what to "design/make" themselves, and what to rely upon others to provide.


With regard to developing intellectual property, our work demonstrates the need for an architectural framework that defines how the various building blocks of IP should fit together. Without such a framework, these efforts are likely to be fragmented and difficult to integrate. At Microsoft, this role is performed by its programming model, which describes the interfaces through which its software components can be accessed. Critically, this model is designed to be flexible enough to facilitate future evolutions in content, as required to reflect changes in the broader technological context.


Gates has said, and history suggests, that Microsoft one day will fail. What will be the company's downfall?


If we knew the answer to this question, we'd be rich!


Slightly more seriously, the main threat probably comes from competing platforms—alternative systems that enable large numbers of developers to form competing innovation ecosystems. These other platforms, promoted by competitors such as Sun and IBM, are currently strong alternatives to Windows and the Microsoft Developer Network. One of the most interesting is the Linux/open source platform. This platform has recently become associated with IBM, which has invested resources in its development and extension, and used it to promote complementary hardware, software, and services. However, this is less a story of sudden dramatic failure and more a story of ongoing competition at the platform level. The presence of competing platforms like Linux requires that Microsoft continue to invest in its IP base and integrate new innovations into its own platform. If it fails to do this, it will be certain to lose out to alternatives.

Thursday, January 12, 2006

Why Evolutionary Software Development Works

Given the importance of software, the lack of research on the best ways to manage its development is surprising. Many different models have been proposed since the much cited waterfall model emerged more than 30 years ago. Unfortunately, few studies have confirmed empirically the benefits of the newer models. The most widely quoted references report lessons from only a few successful projects.


Now a two-year empirical study, which the author and colleagues Marco Iansiti and Roberto Verganti completed last year, reveals thought-provoking information from the Internet-software industry—an industry in which the need for a responsive development process has never been greater. The researchers analyzed data from 29 completed projects and identified the characteristics most associated with the best outcomes. (See "Four Software-Development Practices That Spell Success.") Successful development was evolutionary in nature. Companies first would release a low-functionality version of a product to selected customers at a very early stage of development. Thereafter work would proceed in an iterative fashion, with the design allowed to evolve in response to the customers' feedback. The approach contrasts with traditional models of software development and their more sequential processes. Although the evolutionary model has been around for several years, this is the first time the connection has been demonstrated between the practices that support the model and the quality of the resulting product.
Research on the internet-software industry


A study of projects in the Internet-software industry asked the question "Does a more evolutionary development process result in better performance?" The study was undertaken in stages. First, the researchers conducted face-to-face interviews with project managers in the industry to understand the types of practices being used. Next, they developed metrics to characterize the type of process adopted in each project. Finally, the metrics were incorporated into a survey that went to a sample of Internet-software companies identified through a review of industry journals. The final sample contained data on 29 projects from 17 companies.
The most remarkable finding was that getting a low-functionality version of the product into customer's hands at the earliest opportunity improves quality dramatically.


To assess the performance of projects in the industry, we examined two outcome measures—one related to the performance of the final product and the other to the productivity achieved in terms of resource consumption (resource productivity). To assess the former, the researchers asked a panel of 14 independent industry experts to rate the comparative quality of each product relative to other products that targeted similar customer needs at the time the act was launched. Product quality was defined as a combination of reliability, technical performance (such as speed) and breadth of functionality. Experts' ratings were gathered using a two-round Delphi (in which information from the first round is given to all experts to help them make their final assessment). To assess the resource productivity of each project, the researchers calculated a measure of the lines of new code developed per person-day and adjusted for differing levels of product complexity. Analysis of the data uncovered four practices critical to success

Friday, December 16, 2005

ONE -Your Source for Open Source Solutions

Your Source for Open Source Solutions

Welcome to linuxclub.org - an opensource developmet community site dedicated to providing a forum for open source software used in e-commerce,CRM,CMSin LAMP environments. While we have predominantly included software to date that we have created, we are looking forward to adding more software / developers from all of you as it is submitted to us for inclusion. If you are working on any type of software developemt for ecom, b2b,b2c development, this is your right place,

This Service is Managed by Biju Gopinath and Praveen Kumar

Wednesday, September 07, 2005

BS 1799

BS 1799 Started . Process For Security Auditing

Monday, July 04, 2005

The Organizational Model for Open Source

Programmers contribute to free software and open source projects for many reasons—some for the fun of it, some to improve their skills, others for a paycheck. Many people have wondered why these people give their work away. The truth is that many projects have incorporated in order to protect themselves from individual liability. Since the Free Software Foundation was founded in 1985, a number of new nonprofit foundations have formed, often around specific technologies, to serve the interests of programmers.


HBS professor Siobhán O'Mahony discusses her research on foundations formed around three projects: Debian, a complete non-commercial distribution of Linux; the GNU Object Model Environment (GNOME), which is a graphical user interface for Linux-based operating systems; and Apache, a public domain open source Web server.


Stark: Could you explain why the emergence of nonprofit foundations in the hacker culture appears to be a contradiction in terms?


O'Mahony: The hacker culture prizes autonomy and self-determination. Eric Raymond defines hackers as those who love programming for the sake of doing it, for the sake of obsessively solving a problem. Thus, hackers who contribute to the open source community are often intrinsically motivated.


It is important to realize, however, that hackers are a diverse group. I have interviewed hobbyists, students, academics, software professionals, and government workers who identify themselves as hackers. It is not safe to generalize about all of the values that hackers share, but they tend to agree on at least one thing: Respect must be earned and cannot be derived from position.
There are three big challenges that I identified.
—Siobhán O'Mahony


Much of what is funny about Dilbert cartoons is the disgust that technical workers have for managers who do not have intimate knowledge of the content of their work. This emphasis on demonstration of capabilities is even more critical in the open source community. One earns the respect of peers by demonstrating skills and making valuable contributions of code to a project.


Associated with these values is an embrace of informality and distaste for "administrivia"—for this too can take away from the pure joy of programming. So I suppose what can be considered to be contradictory is that many community-managed open source projects have incorporated and created nonprofit foundations with formal boards and designated roles and responsibilities.


Now there is a wide range of foundations that are emerging. At one end of the continuum are nonprofit foundations that act as little more than legal shells to hold a project's assets and allow it to collect donations. At the other end are nonprofit foundations that have elaborate committee structures, manage releases, and even hire employees.


Q: What were the greatest challenges faced by the three nonprofit foundations you studied?


A: There are three big challenges. One, which is common to all start-ups, is resources. Many foundations have been successful in garnering donations of hardware and equipment when needed, but do not have vast reserves to support legal expenses, travel, or conferences. However, since these foundations are primarily electronically constituted and manifested in the physical world only by a mailing address, their capital needs are minimal.
People are intimately aware of the fact that too much structure will disenfranchise the very people who make the most successful open source projects possible.
—Siobhán O'Mahony


Second is the tension between embracing the informal work norms and ethos of the hacker style of programming with the need to be more predictable and coordinated in managing software releases. Projects that are more closely coupled with commercial firms have experienced direct pressure from firms to communicate better and do more formal planning of what will be included in a release and when. Several projects that have created foundations are experimenting with this tension now—"How much structure can we impose on volunteers?" People are intimately aware of the fact that too much structure will disenfranchise the very people who make the most successful open source projects possible.


Lastly, open source software foundations have been thrilled to receive support from Fortune 500 firms in the software industry. This support is attenuated by the fact that no community-managed software project wants to be "taken over" or co-opted by one firm. The biggest tension here is how to sustain pluralism. If open source contributors only recognize each other based on individual merit, to the exclusion of monitoring where those people of merit are employed, then the pluralism necessary to maintain a community form could be threatened.


One of the most important roles foundations can play is to ensure that pluralism in the governance of these projects is sustained.


Q: Will the nonprofit foundation be an organizational model that will define future software development?


A: I cannot see into the future, but I think the first experiment is in play.


I see the Open Source Application Foundation (OSAF) as an example of the next wave. Mitch Kapor, a successful venture capitalist who founded Lotus Software, invested $5 million of his own money into building a personal-information manager, Chandler. In his own words, "The whole idea of founding a company to develop new productivity software was a complete non-starter. No sane VC would or should fund a venture to compete with the Microsoft monopoly."


Even though his project is in the early stages, over 33,000 people downloaded the very first release in its first two weeks and OSAF has received a grant from the Mellon Foundation to further their work for educational environments.


I doubt that nonprofit foundations will define the future of software development, but all evidence would indicate that they will continue to play an important role. Keep in mind that the Internet Engineering Task Force (IETF), which defines the protocols of the Internet, is a nonprofit professional society. What is different from professional nonprofits or nonprofits focused on charitable causes is that open source foundations produce software that is resold by third parties on commercial markets.
The more fundamental question that firms and policy makers need to be thinking about is just what type of good is software?
—Siobhán O'Mahony


Similar issues surface in the biotechnology world, where university and market conceptions of the life sciences can become intertwined. The more fundamental question that firms and policy makers need to be thinking about is just what type of good is software? The answer to this question may be shifting just as economic and social life becomes dependent upon a common computing infrastructure. When a successful entrepreneur with every possible advantage chooses to found a nonprofit instead of a firm, because this is more likely to lead to success, what can be inferred about the state of the software market?


Organizational theorists argue that nonprofit foundations are created to protect goods too valuable and socially desired to be left to the market, goods like education. If we are granting special tax privileges to organizations to produce software, we as a society are saying something about the nature of that good and the nature of the markets that create it.


Q: What were the biggest surprises that you encountered in this project?


A: The biggest surprise to me was the level of involvement that firms engage in with community forms on software development and standard setting in general. That is, forms that are not government sponsored nor formally constituted by partnership, alliance, or consortia agreements.


It is interesting to watch how individuals with limited power and resources negotiate and collaborate with the largest of corporations. Community may not be exactly the right word to describe these forms, as the term denotes more consensus than reality might dictate. I do think that we need to expand our definition and construction of the types of corporate alliances that are possible and productive to include collaboration with collectives that identify with political or occupational norms and values.


See Related Articles
Nonprofit Foundations and their Role in Community-Firm Software Collaboration


by Siobhán O'Mahony


Contributors to community-managed projects have created nonprofit foundations despite the fact that such formal structures are an anathema to the hacker ethos of technical autonomy and meritocratic decision making. The technical organizations that emerged since the federal government privatized the Internet may have partially influenced the design of these foundations, but some features are the unique product of managing community software in a commodity world. One thing that stands out from either the early Internet working groups or the typical corporate standard-setting bodies of the past is the role of nonprofit software foundations in enabling collaboration between a community of individuals and corporate actors.


...


Facilitating Community-Corporate Collaboration: A New Actor in the Supply Chain
The foundations that emerged in this study are incorporated, organized by and for individual members, and produce benefits for the public, but do not redistribute profits to their members. What is unique about these foundations, in relation to technical communities of the past, is that these foundations also own assets that are sold by third parties in commercial markets and may in fact compete with other commercial offerings. Firms that use free and open source software have, in effect, allowed community-managed projects that grew out of a politically motivated social movement to become a part of their supply chain. This interdependence has fostered a new set of working relations among community projects, their foundations, and firms. Figure 1 [not shown here. -Ed.] outlines the role of nonprofit foundations in this new collaboration model. Foundations hold the assets and property rights of technical communities that produce software, but do not pay their developers or redistribute profits to their members. Community members retain the ability to set their own technical direction and manage the culture, norms, and governance of their own projects. In return for assigning their intellectual property to a foundation, they are granted protection from individual liability and a means to represent the project.


Firms can sell and distribute the community's work at a profit by creating complementary software, hardware, and services that reflect their conception of market needs. They can modify the work of the community as long as they respect the terms of community licenses and contribute improvements back to the code base where required. In return, firms offer sponsorship and support to both individuals and foundations. Individual volunteers that are working on components of critical interest to firms may be hired to continue their efforts as sponsored contributors. Proprietary code, financial resources, hardware, and equipment that firms wish to donate to the project are entrusted to the foundation. In return, some foundations offer firms advisory or sponsor roles: mechanisms that can provide them with a voice on the project. On a day-to-day basis, commercial support of community-managed projects is enacted through the sponsored contributors that work on those projects. On a legal basis, the foundations play an important mediating role. In Figure 1, release coordination is depicted with a question mark sitting between the authority of projects and their foundation. The strength and role that foundations play when collaborating with firms may well depend on the degree to which the authority of the foundation touches the technical core of the project.


In this model, the ownership and maintenance of code is decoupled from its sale and distribution. Without some means to retain their rights it is unlikely that community-managed projects would have had the base of power necessary to engage with firms and create this model (O'Mahony, 2003). Firms, for example, could have legally used community-developed software without necessarily collaborating with them. Community-managed projects held two bases of power that helped firms consider them a credible partner for collaboration: the market share and user base that derived from a project's technical excellence, and the legal and normative controls that encouraged users to "give back" to the project. These two bases of power offset technical communities' lack of economic and political power and helped establish them as a viable commercial actor with which firms could partner.


Granted, this analysis provides a rather static view of the legal and organizational structures that undergird a larger and more complex network of social relationships that flow in and out of these different forms. For example, a volunteer contributor could become sponsored by a firm and then be elected to a board position of a nonprofit foundation. Individuals who were once volunteers and have since founded firms may be active in shaping the nonprofit foundations that represent their project. Informants often stressed that they wished to perceive each other as individual contributors without regard to organizational affiliation. And yet many informants who occupied two or more roles acknowledged that they often experienced role conflict when their activities touched multiple interests.


This touches on an implicit but unarticulated tenet of the hacker ethos: the desire to maintain pluralism. This belief takes two forms. First there is pluralism in voice and process. Raymond has argued that with "more eyes, more bugs are shallow" (1999). An unstated condition is that diverse eyes are necessary for this lay maxim to hold. The more programmers from diverse cultures and backgrounds run various applications in different computing environments, the more likely it is that each user will detect problems unique to them. This allows code to be tested and contributions designed at a level that would require more permutations than are possible at most software firms. Diversity matters as much as volume. The second form of pluralism is required to make multilateral contributions possible: pluralism in the computing infrastructure itself. Software that is created independent of any one vendor's terms; is portable to different types of operating systems; and is interoperable with other applications allows pluralistic contributions to continue. The principle of pluralism depends upon shared standards and protocols, but, I would argue, it also depends upon a form of organizing that prevents dominant interests from forming.


Herein lies a source of conflict. Individuals contributing to community projects want to recognize each other as individuals, retain their individual autonomy, and remain as free from their employment affiliations as possible. On the other hand, without recognition of organizational affiliation, preserving pluralism will be more difficult. Project responses to potential conflict of interest problems have varied, but one feature that works in their favor is public disclosure. The organizational affiliation of project leaders is typically publicly available. When the relationship of one's activities to one's organizational affiliation becomes suspect, other community members are likely to be vocal about their concerns. For contributors who adopt project-based e-mail addresses, affiliation is less public. Over time, this could lead to further blurring of these different roles. The structure foundations provide may become one means to help preserve pluralism.


The evolution of a symbiotic relationship between community-managed projects and firms required adaptation from both actors, and some of these changes are manifested in the roles that nonprofit foundations fulfill, but not all. An understanding of how community-managed projects and firms maintain this relationship at the level of code contribution requires much more explication than has been discussed here. This structural examination of the community-firm collaboration model distributes a very different set of power, ownership, and rights than has been fully appreciated. From an economic perspective, one might ask, have community-managed projects outsourced their distribution costs? Or, have firms outsourced their development costs? Arguments could be made to support both lines of thought. That is in itself perhaps a test of mutualism. A more sociological perspective might question whether community-managed projects that are both politically and pragmatically motivated have successfully resisted co-optation by powerful market dominants. Legally, nonprofit foundations play a critical role in preventing this from happening, but this role reinforces mutual relations that are normatively maintained. Equally significant implications are likely to stem from the intellectual and innovative contributions that can result from collaboration with a new type of actor in the software industry.


Excerpted with permission from the chapter "Nonprofit Foundations and their Role in Community-Firm Software Collaboration" in Making Sense of the Bazaar: Perspectives on Open Source and Free Software, Siobhán O'Mahony, ed. O'Reilly & Associates Publications, 2003 (forthcoming). Copyright (c) 2003 Siobhán O'Mahony. Permission is granted to copy, distribute, and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts. A copy of the license is included in the section entitled "GNU Free Documentation License."

Wednesday, June 02, 2004

Microsoft claims to love the open-source concept

For years, Bill Gates and other top executives at Microsoft railed against the economic philosophy of open-source software with Orwellian fervor, denouncing its communal licensing as a "cancer" that stifled technological innovation.

Today, Microsoft claims to "love" the open-source concept, by which software code is made public to encourage improvement and development by outside programmers. Gates himself says Microsoft will gladly disclose its crown jewels--the coveted code behind the Windows operating system--to select customers.


"We can be open source. We love the concept of shared source," said Bill Veghte, vice president of the Windows Server Group. "That's a super-important shift for us in terms of code access."




Did Microsoft suddenly find open-source religion? Hardly. It was dragged there kicking and screaming by its customers, who are increasingly drawn to open-source software like Linux, whose inner workings of code can be seen by anyone and modified.
While small in scope, Microsoft's adoption of some key open-source tenets is monumental in meaning. It is an acknowledgement that the company sees the technology as its most serious competitor in years and is taking steps to make sure its Windows franchise can survive the attack.
The open-source movement also represents a larger threat to Microsoft that transcends any particular technology or company: The high-tech industry has undergone a psychological shift that encourages challenges to Microsoft, which for many years had been technologically possible but practically unthinkable.
For a combination of reasons ranging from the troubled economy to mistakes in Microsoft business strategies, many large companies are wondering, for the first time in maybe a decade, why they pay so much for its products and how they can get by with less.
"This is going to force Microsoft to look at how they structure their software architecturally, and how they package and market their products, and I think that's good," said Michael Cherry, an analyst with Directions on Microsoft.
Microsoft has itself to blame at least in part for strengthening the hand of its rivals. A controversial new software licensing policy, which raises prices for some customers and asks them to pay in advance for future releases, has angered many Microsoft customers and driven them to seek cheaper alternatives such as Linux.
While no one expects the open-source trend to affect Microsoft's profits immediately--the company is still ringing up record sales and has roughly $40 billion in cash--it is clear that the technology's popularity has forced the company to respond.


Q&ABallmer's tangled .NetMicrosoft's CEO say she's untangling the .Net mess

"Microsoft hasn't yet been hurt by Linux in any absolute sense, but open source gives customers alternatives," said Jonathan Eunice, an analyst with market researcher Illuminata. "It means Microsoft has to devote some of its resources to thinking about how to combat it. It makes Linux and open source a strategic problem, not a 2002 revenue-loss problem."
Microsoft customers say the software giant has already made significant changes, such as sharing source code with large customers and launching a "trustworthy computing" initiative to button-up troublesome security holes in its software.


The company's next server version of Windows will ask clients to join online newsgroups for support and advice, following the community-based traditions of the open-source philosophy.
"With open source, I can make systems work where closed-source software just won't," said Phillip Windley, chief information officer of the state of Utah and a longtime Microsoft customer. "I can't always afford to wait for a software vendor to come around to my way of thinking."
Too little, too late?The question is, did Microsoft act too late? In just the past year, many companies have found that open-source software has gained a level of sophistication that makes it a viable alternative to Windows for server systems and Web site operations. Amazon.com, Verizon Communications and Air New Zealand have all switched to Linux over the past 12 months to cut costs.

Initially, Linux was seen as a competitor to Windows only for server operating systems, used by roughly 27 percent of corporate servers and more than half of all Web servers, according to industry researcher IDC. Recent moves, however, have begun to strengthen Linux's appeal in desktop PCs when combined with open-source alternatives to Microsoft's Office, such as Sun Microsystem's StarOffice.

That's leading some longtime Microsoft customers to the next, once-unthinkable step: serious consideration of Linux and other open-source software as a replacement for Windows and Office on their desktop systems.

Satish Mahajan, chief information officer of American Automobile Association, is evaluating Linux for his server systems and beginning to eye the open-source software for his desktops as well. "When I talk to my colleagues, I hear more and more willingness to move a portion of their businesses to Linux. I'm still weighing the pluses and minuses, but it has moved up on my scale," he said.
Mahajan and others say cost is only one reason for the decision to evaluate Linux. In Microsoft's modern world, its products are seen by a growing body of corporate technology managers and even some of the world's governments as inflexible, expensive and bloated. Large companies and public agencies--some of Microsoft's best customers--are weighing Linux and open source to simplify their operations and get off the update-replace treadmill long prevalent in the computer business.
Microsoft executives acknowledge the rising threat but, mindful of the popularity of Linux and open source among their customers, have tempered their comments.

RoundupEyes on LinuxGamers, hackers, virus writerstake notice of the OS

"We need to take a balanced tone," said Microsoft's Veghte, the man assigned by CEO Steve Ballmer to come up with a competitive strategy toward Linux. "No matter how you look at it, Linux is a huge competitor and isn't going to go away."
Still, Ballmer--never known to mince words--is quick to point out where he sees Linux lacking. "The Linux client hardly runs any applications except a bunch of shareware stuff that’s not very good," he said. "There has yet to be any innovation, new features, new capabilities out of the Linux platform.

"First they cloned Unix, and there are people working on cloning some of our stuff. But it’s just a cloning OS. I don’t think anyone should expect anything innovative coming out of that world," said Ballmer.

The most difficult part of this competition is one of simple economics: Linux and other open-source technologies are licensed for free. That’s where Microsoft can’t compete, a point Ballmer willingly concedes. As Ballmer said at a recent conference in London, "We cannot price at zero, so we need to justify our posture and pricing."

But Ballmer thinks price is only one reason why companies are considering Linux. "People are going to look at Linux, whether our stuff costs $5, $50 or $100. So we have to work that value proposition every day." Numbers cause concernIn a recent survey of 225 chief information officers, 29 percent said they owned Linux servers and 8 percent are formally considering buying them. More troubling for Microsoft, 31 percent of those who recently purchased a new Linux server used it to replace a server running Windows.Many technology managers cite the controversy over Microsoft's new licensing plan in their reasoning.

"We're looking at Linux as a less expensive alternative to Windows and Office," said Alan Flint, systems applications manager at Richmond Wholesale, a food distributor in Richmond, Calif. "I'm looking for more simplification in my environment because I'm displeased with Microsoft's licensing programs."

Mahajan said Microsoft's licensing plan is also driving him to take a closer look at Linux. "The cost of Microsoft's software continues to increase and change from the old days, where you could buy Windows 98 and keep it for three years. That's not an option anymore. You have to pay."
Utah's Windley agrees, saying the new plan "just makes people more leery" of Microsoft. "I've got a whole group of IT workers in this state who are tired of the licensing headaches with Microsoft. They want OpenOffice (an open-source version of Sun's StarOffice) just to do away with the headaches."

Flint sees another trend driving large companies away from Microsoft: the company's practice of issuing frequent upgrades and new versions of its products, often ahead of its customers' willingness to buy those products. "Microsoft wants to lock in their revenue by having customers tied to subscriptions. I think they are changing their licensing because there aren't many features that users are clamoring for."

Cherry of Directions on Microsoft said these comments are echoed throughout the industry as technology buyers are much more price-conscious than they were in the 1980s and 1990s. "Linux is becoming more of a threat because customers used to be a lot less sensitive. Whether it was money or whether each version of Windows had enough compelling features, they were willing to upgrade even if it cost them more hardware," he said.

"Now they look at something like Windows XP and say, 'OK, it's more stable, but I have to buy new machines. I don't think Microsoft has ever made a version of its products that used less resources than the previous version.' Or, 'Windows 2000 Server looks really good, but all I need is a Web site, and I can take this old 486 and I can put Red Hat Linux and Apache on it and have a Web server up in no time at all,'" Cherry said. News.CommentaryLinux's foot in the doorForrester says CIOs can be confidentthey'll get first-rate Linux support.


Support from big gunsMoreover, technology buyers said Linux is getting better in quality and range, largely because of help from Microsoft's rivals. "Once folks like IBM and Sun started providing support for Linux, (they) made Linux better by plugging some holes and providing better support," Mahajan said.

That, coincidentally, is exactly how Microsoft got its foot in the door with Windows back in the 1980s. "Microsoft used the divide-and-conquer marketing tactic. They didn't go to IT managers--they went to business departments. And suddenly, the IS manager looked around and said, 'Man, we're running a lot of Microsoft stuff.' So I think that's going to happen with Linux," Cherry said.
Nevertheless, despite the significant challenge posed by Linux and open source, Microsoft hardly has its back against the wall. Linux may have become a bona fide competitor in the server market, but Microsoft still rules on the desktop.

Special coverageIt's a Linux worldFull coverage of the 2002 LinuxWorld Conference and Expo


Industry veterans, including many Microsoft customers, note that it is extremely difficult--and expensive--to unseat the incumbent technology in large companies. One of the largest costs is retraining users.

"It would be very hard to convince the mainstream user in Utah state government that Linux is the right desktop choice for them. Most of the reason for that is not functionality--it's training," said Windley, who supports 22,000 desktops throughout Utah. As a CIO contemplating making such a huge change, he noted, "you have to be willing to fall on your sword, because you very well may expire doing it."

In addition, those companies that did agree to Microsoft's new licensing program have paid to use the company's products for up to three years in advance, making it unlikely that they will switch to a competitor.

But the mere existence of Linux will most likely benefit Microsoft's customers in the long term. In fact, many longtime analysts said that, with the slump in the technology business and the weakening of some key rivals, Microsoft needs Linux.
"The funny thing about this Linux thing is it might just end up being the perfect kind of threat for Microsoft," said Rob Horwitz, another analyst with Directions on Microsoft. "It's something that ain't gonna kill Microsoft, but it is something that will help it focus on who the enemy is and what they have to do."

Key to that battle plan is making its products more secure and reliable, customers say, as well as changing licensing policies to be less complicated. Otherwise, Microsoft will find itself the victim of a time-honored trend in the computing business: obsolescence.

"Linux is the end game in 'good enough' computing," Illuminata's Eunice said. "It's great stuff, it comes at little or no cost, and it's good enough to do the job. Just as Windows gave Unix makers fits in years past--and the Unix makers gave minicomputer guys fits, and minicomputer guys gave the mainframe makers fits--open source is giving Microsoft and Windows fits."

Monday, April 12, 2004

The Business of Free Software

IT vendors including Oracle, IBM, and Sun that traditionally have built offerings based on proprietary technologies are now investing billions of dollars into open source software—arrangements that are transforming in some ways the fundamental nature of technology strategy development, according to recent research at Harvard Business School.


In "The Business of Free Software: Enterprise Incentives, Investment, and Motivation in the Open Source Community," the authors—HBS professor Marco Iansiti and Gregory L. Richards of Keystone Strategy—examine what drives companies with large, proprietary software portfolios to invest in open source software (OSS) projects that can sometimes seem unrelated to their core business.


"This new reality upends the classic rules of strategy," Iansiti says, "and it's changing the way technology firms approach the development process. How much of your product do you share? Does your business model extract value from a core product or a portfolio of complementary products?"


Most academic research has focused on individual contributions to OSS, but this working paper is among the first to consider the impact of massive IT vendors like IBM and Oracle on the open source community.


Why are proprietary firms diving into open source? The answer (it's good for business) is hardly shocking. But the line from investing in OSS to profiting from a product is not as straight as one would expect.
Influencing what you don't own


"In a complex, sophisticated environment where so many products and services are connected, strategy has become, in large part, the art of influencing assets that you don't own," Iansiti observes. It's the old saw of the razor/razor blade business model, with many more options for profit. "For IBM, Linux is the razor, and WebSphere software and its related services are the razor blade," he says.


"The question of how you invest and extract money becomes much more interesting when you consider the different layers of the software 'stack' and how they can be leveraged," Iansiti adds. As a measure of IBM's commitment to open source, the company announced its intent to invest $1 billion to the development and promotion of the Linux operating system.
This new reality upends the classic rules of strategy and it's changing the way technology firms approach the development process.


In their paper, Iansiti and Richards divide a sampling of OSS projects into a "money-driven" or "community-driven" cluster. The former group has received over $2 billion in investment in technologies including Linux, Firefox, and OpenOffice, while support for the latter derives solely from the voluntary efforts of vendors' employees.


Not surprisingly, they find that the money-driven cluster consists mostly of high impact OSS projects that draw customers to a vendor's mainly proprietary, core businesses.


"OSS is a business tool that has been used by a variety of corporations for very logical purposes," notes Iansiti. "If you have an environment in which part of the service you provide and the product you sell can be given away for free, that changes the dynamics of the industry. As a company, you will most likely spend more time thinking about exactly what to give away and how to couple it with complementary products and services than you do anything else."
Wooing open-source developers


Another focus centers on determining how to make it easier for the open source community to work on projects that are consistent with your company's strategy.


"There are five or six million people in this space," Iansiti says of the open source community. "It's important to ensure they're doing something that helps your cause."


It makes sense to provide tools that help programmers develop applications that will make Linux more successful if it drives other aspects of your business. (And it doesn't hurt that you're also putting a stick in the eye of a competitor who makes money from the operating system layer of the software stack.)


"It changes the way we think about business development and alliances," Iansiti says. "Traditional alliances are formed between a business development executive and an individual company like IBM or Cisco. In the open source scenario, you could say that there's an alliance between IBM or HP and every Linux developer out there. And that alliance is being mediated by dynamics that are less investment-oriented than a traditional deal and more oriented toward indirect tools to make money."

The payoff


Sometimes the strategies software companies employ are so complex that it isn't immediately evident why a company is investing in a particular area, Iansiti notes. There can be a significant lag time between a company's investment and extraction of a profit.


"People can be too quick to point fingers, saying that one company is stealing while another is giving something away. In fact, the whole picture is often below the surface."
It changes the way we think about business development and alliances.


In another ironic twist, some developers who were motivated toward open-source software development in rebellion against huge proprietary software vendors now find themselves being paid for work from those very same companies.


While research indicates a large majority of those who contribute to the open source community do so in order to learn and share new knowledge and skills, over half cite direct payment for their work or the chance to improve their employability as motivating factors.


Iansiti is the David Sarnoff Professor of Business Administration. He is the author, with Roy Levien, of The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability.