Day 2 Morning - Open Source (Carbone and Weiss)

Lead to WinMade available under Creative Commons License

New Tools and Rules of the Game

How to Lever Open Source to Gain Advantage

Peter Carbone & Michael WeissMay 2009

Lead to WinSlide May 20, 2009 Peter Carbone - Made available under Creative Commons License

Agenda

As senior leaders and founders - you are responsible for the strategy of your business - to design the business to compete:

• Open source as a powerful and dangerous tool• What you need to know.

• New go-to-market models and tools• What you need to know.

2


Introduction

Upon Completion of this segment you will know:• what open source is and is not• understand the context for applying open source• areas of strengths and value• things to watch out for

You will be able to:• determine if and how to use open source to advance your

business• avoid disasters

3


Myths of Open Source

4

Myth RealityFree Commercial

Cost driven Strategy driven

Software thing S/W, H/W, content, process

Volunteers Commercial support

Ad Hoc Collaborative Process


What is Open Source All About

•Software– most well know

•Hardware– designs

•Content– education (MIT)– information (Wikipedia)

•Process– know how

5

License to IPRTransparency


A Word About Licensing

• Many types with varying degrees of flexibility

• Inheritance - Clean IP• Lots of expertise in TFN

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Permissive Hybrid Restrictive


New Technology Strategy Options...Open Source Example

1. Use

Profits extracted from Open Source

projects

3. Champion

4. Collaborate

5. Redefine

0. Deny

Time

Engineering drivenDevelopment efficiency

Business drivenValue appropriation

Value co-creation

Value appropriation

Coupling management

Singleproduct

Multipleprojects

2. Contribute

7


How it Works

8

• Open Source development model encourages open innovation

• Openness, Transparency, Meritocracy • Anyone can participate

• Open Source licensing allows competing vendors to collaborate on the infrastructure technology

• No requirement for royalties. • No single control point of intellectual

property

• Open Source business model encourages rapid adoption of technology

– It is free and easy to access

• No control points• Open Governance• Vendor neutral• Meritocracy• Code rules• Attracts the broadest

and deepest participation


Importance of Platform

Architecture of participation

9 A Practitioners Guide to Ecosystem Development - Mike Milinkovich

Lead to WinSlide May 20, 2009 Peter Carbone - Made available under Creative Commons License10

Five Levels of Value ...Why Businesses Engage with Open Source

1. Use 2. Contribute 3. Champion 4. Collaborate 5. Redefine

Explore and reduce build costs

Fill gaps in feature set of company’s product

Champion open source project

Gain positional advantage for company’s product in a market segment

Change value proposition of offer delivered to customersDecrease

time to market

Improve software quality

Steer new functionality and its evolution

Gain positional advantage for company’s product in a market segment

Change value proposition of offer delivered to customers

Changes to: Motivation -> Behaviour -> Investment -> Commitment


Company Value Appropriated1. Use 2. Contribute 3. Champion 4. Collaborate 5. Redefine

Role of manager making decision to use open source

Technologist resp. for technical work in function or project

Project manager or technology lead responsible for a product component

Manager responsible for developing product portfolio

Manager responsible for market segment and sales strategy

Line of business president responsible for growth, chief technical officer

New actions company decision maker carries out

• Uses and promotes open source software

• Contributes time, code, developers, and money to open source project

• Coordinates activities of internal developers

• Contributes leaders and experienced developers to open source project

• Steers manages info from open source project

• Mobilizes external developers to contribute to project

• Coordinates internal & external developers

• Mobilizes & coordinates community to promote open source project

• Collaborates to implement company’s product strategy

• Exerts influence on customers & competitors to change competitive environment in favour of company and reduce industry redundancy

• Connects, enables and positions experts to deliver solutions to customers

• Promotes solutions

• Invests in programs and tools to design products so they can be developed using open source projects

• Mobilizes a network of outside and diverse references to help persuade customers to buy

• Connects, enables and positions experts to deliver solutions to customers using new business model

• Develops partner network and services to this network

Lead to WinSlide May 20, 2009 Peter Carbone - Made available under Creative Commons License 12

Value to the Community

1. Use 2. Contribute 3. Champion 4. Collaborate 5. Redefine

No change in value to open source softwareNumber of users and awareness of open source software increases

More features and better quality

Company pull for open source projectLeadership structure and governance

Company commitment to health and advancement of open source project New versions of open source software

New company driven resources to establish links with other open source projects and new project contributors


Why You Might want To Participate

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1. Use 2. Contribute 3. Champion 4. Collaborate 5. RedefineExplore and reduce build costs

Fill gaps in feature set of company’s product

Build open source community around company initiativee.g. Manage cost of Customer Customization

Create an industry platform for shared infrastructuree.g. COTS, aTCA

Redefine your position in the value chain

Decrease time to market

Improve software quality

Build open source community around company initiativee.g. Manage cost of Customer Customization

Create an industry platform for shared infrastructuree.g. COTS, aTCA

Redefine your position in the value chain


• Motivation -> Behaviour -> investment -> Commitment

Market

Co-Development

Market making ecosystems

Feature-Driven

Business-ProcessDriven

Products

Strategic lever

Business

Some Dynamics of Open SourceBusiness

Value appropriationTechnicalValue creation

Development cost saving


Open Source - Lessons Learned

• valuable strategic tool not just engineering tool• business model versus technology dependency• facilitates collaborative innovation• cultural implications• requires different design approach

• collaborative vs waterfall• integration vs development processes

• take care with licensing• engineer life cycle cost vs first cost alone

Changes the Game

15


Decisions

How to:– leverage community to advance your business?– collaborate with partners - is OSS a focal point?– manage required investment to drive influence?– make the value chain changes that are required?– appropriate value?

16


References

1. Talent First Network http://www.talentfirstnetwork.org/

2. “Competitive Open Source” - July 2007 - The Open Source Business resource [ Carbone ]

3. Value Derived from Open Source is a Function of maturity Levels” - OCRI partnership Series - April 2007 [ http://www.ocri.ca/events/presentations/partnership/April1907/PeterCarbone.pdf ]

4. “Insights From Research on Competing with Open Source - OCRI Partnership Series - April 2006 [ http://www.ocri.ca/events/presentations/partnership/April2106/Carbone.pdf]

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http://www.tlaentfirst.ca

http://www.tlaentfirst.ca

http://www.osbr.ca/ojs/index.php/osbr/article/view/351/312

http://www.osbr.ca/ojs/index.php/osbr/article/view/351/312

http://www.ocri.ca/events/presentations/partnership/April1907/PeterCarbone.pdf




http://www.ocri.ca/events/presentations/partnership/April2106/Carbone.pdf


