Today's open source world is a completely heterogeneous mix of voluntary communities, open source service providers, non-for-profit associations, government agencies and many more actors. In this context it is a great challenge for a firm to manage successfully its open source projects and create a properous community for them. Several recent examples have shown that such business-controlled communities broke apart through the forking of the project. This speech will analyze why voluntary contributors are beneficious to an open source community, how different types of open source projects are governed, and, by providing examples, what companies have to do to direct their own communities through the perfect balance between control and openness.
2. Short Bio Matthias Stürmer
● Senior Advisor at Ernst & Young
EMEIA Financial Services since 2010
● Before at Swiss open source software provider Liip
● Dr. sc. ETH Zürich at the Chair of Strategic
Management and Innovation of ETH Zürich, thesis
on firm involvement in open source communities
● Business administration and computer science at
Ernst & Young University of Bern
Belpstrasse 23
3001 Bern
Switzerland
● Founder and secretary of the Swiss National
matthias.stuermer@ch.ey.com Parliamentarian Group for Digital Sustainability
Mobile: +41 58 289 61 97
● Member of the Board of Swiss Open Systems User
Group /ch/open
Matthias Stürmer, Ernst & Young
3. Agenda
1. Forking today
2. Motivation and the private-collective model of innovation
3. Benefits and best practices of corporate community building
4. Balancing act between openness and control
5. Little surprise...
Matthias Stürmer, Ernst & Young
8. Forking today
Are these all failed open source projects?
Matthias Stürmer, Ernst & Young
9. Forking today
No, the core team just didn't manage well its
community.
Forking is the community‘s Sword of Damocles.
Matthias Stürmer, Ernst & Young
10. Agenda
1. Forking today
2. Motivation and the private-collective model of innovation
3. Benefits and best practices of corporate community building
4. Balancing act between openness and control
5. Little surprise...
Matthias Stürmer, Ernst & Young
12. Motivation for individuals to contribute
10 different reasons for individuals to contribute to open source software:
Intrinsic Motivation: ● Ideology
Can be enjoyment- ● Altruism
or obligation-based incentives ● Kinship
● Fun
Internalized Extrinsic Motivation: ● Reputation
Can be non-monetary... ● Reciprocity
● Learning
● Own-use
Source: G. F. von Krogh,
Extrinsic Motivation: ● Career S. Haefliger, S. Spaeth,
M. W. Wallin “Open Source
... or monetary incentives ● Pay Software: a Review of
Motivations to Contribute”
Matthias Stürmer, Ernst & Young
13. Firms adopting the open source model
Building a firm-sponsored community by
Level 3 renouncing some of the project's control
Revealing proprietary source code under an
Level 2 open source license → full control by the firm
Integrating externally available open
Level 1 source software → open innovation
Source: Matthias Stuermer 2009 PhD Thesis “How Firms Make
Friends: Communities in Private-Collective Innovation”
Matthias Stürmer, Ernst & Young
14. Motivation for firms to contribute
7 different reasons for firms to contribute to open source software:
Level 2: Legal constraints ● GPL demands contributions
forced contributions
Level 3: Business benefits ● Low knowledge protection costs
voluntary contributions ● Learning effects for the organization
● Reputation gain
● Lower costs of innovation
● Lower manufacturing costs
● Faster time to market
Source: Matthias Stuermer, Sebastian Spaeth, Georg von Krogh 2009
"Extending private-collective innovation: a case study"
Matthias Stürmer, Ernst & Young
15. Theory to explain firm contributions
Rivalry proprietary
software
yes no
yes private good club good
Excludability
no commons public good
open source
software
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16. Theory to explain firm contributions
1. Private investment model
● Appropriation of financial returns from innovations through IPRs
→ patents, copyright, licenses, trade secrets
● Knowledge spillover reduces innovator's benefits
2. Collective innovation model
● Investments in public goods → non-rival, non-excludable
● Free riding problem → public funding, governments
3. Private-collective model of innovation
● Innovators privately fund creation of public goods
● Example: production of open source software by firms
Matthias Stürmer, Ernst & Young
17. Private-collective model of innovation
● Free knowledge sharing
● Explains conditions when innovators receive rewards from private
investments in public good innovations
● Rewards from process of innovation surpasses rewards of free-riders
→ involvement in innovation process
● Process-related rewards are larger than process-related costs
→ public good innovation
● What are such rewards or incentives?
Sources:
Eric von Hippel, Georg von Krogh 2003 “Open Source Software and the Private-
Collective Innovation Model: Issues for Organization Science”
Eric von Hippel and Georg von Krogh 2006 “Free revealing and the private-
collective model for innovation incentives”
Georg von Krogh 2008 “Researching the Private-Collective Innovation Model”
Matthias Stürmer, Ernst & Young
18. Agenda
1. Forking today
2. Motivation and the private-collective model of innovation
3. Benefits and best practices of corporate community building
4. Balancing act between openness and control
5. Little surprise...
Matthias Stürmer, Ernst & Young
19. Why do managers want a community?
Benefits for open source project leaders having an active community:
● Free feature development
● Free extension development
● Free testing
● Free bug reporting
● Free bug fixing
● Free customer support
● Free documentation
● Free marketing
● etc.
Matthias Stürmer, Ernst & Young
20. Best practices in
corporate community building
Two examples:
Eclipse by IBM
Maemo by Nokia
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21. Evidence from the Eclipse case
Key benefits for IBM:
1. COCOMO: external
contributions of 21.5 million
LOC by 2007
~ 214,000 man-months
~ 1.7 billion USD
2. Standard-setting in Java IDE,
beating competitor Sun
3. Strategic platform for IBM
software solutions: basis for
proprietary applications
Source: Sebastian Spaeth, Matthias Stuermer, Georg von Krogh 2010 "Enabling
knowledge creation through outsiders: towards a push model of open innovation"
Matthias Stürmer, Ernst & Young
22. What did IBM do?
1. Preemptive generosity
● Revealing of initial Eclipse source code by IBM
2. Continuous commitment
● Constant number of IBM programmers in Eclipse
● Constant level of participation in newsgroups
3. Adaptive governance structures (giving up control)
● Non-profit foundation with equal membership of firms
4. Lowering barriers to entry
● Sub-projects by non-IBM people; modular architecture
Source: Sebastian Spaeth, Matthias Stuermer, Georg von Krogh 2010 "Enabling
knowledge creation through outsiders: towards a push model of open innovation"
Matthias Stürmer, Ernst & Young
23. Nokia's (past) open source
community building
● 2003: product decision for Nokia 770 tablet
● 2007: successor devices N800 and N810
● June 2009: Nokia partners with Intel for Maemo
● August 2009: Maemo shall supersede Symbian as smartphone platform
● October 2009: Nokia releases smartphone N900
● March 2010: Nokia Maemo and Intel Moblin become MeeGo
● March 2011: Nokia partners with Microsoft for Windows Phone 7...
(for strategic reasons)
Matthias Stürmer, Ernst & Young
24. What did Nokia do?
Source: Matthias Stuermer, Sebastian Spaeth, Georg von Krogh 2009
"Extending private-collective innovation: a case study"
Matthias Stürmer, Ernst & Young
25. What did Nokia do?
Source: Matthias Stuermer, Sebastian Spaeth, Georg von Krogh 2009
"Extending private-collective innovation: a case study"
Matthias Stürmer, Ernst & Young
26. Agenda
1. Forking today
2. Motivation and the private-collective model of innovation
3. Benefits and best practices of corporate community building
4. Balancing act between openness and control
5. Little surprise...
Matthias Stürmer, Ernst & Young
27. Control of open source projects
Community-driven open source projects
● Meritocracy: “exercise of control on the basis of knowledge” *
● Technical contributions and organizational-building behavior
lead to authority and control **
Firm-driven open source projects
● Why do firms want control?
● Business model: value creation and value appropriation
● Firms need control to appropriate returns of investment
● Balancing act between openness and control
Sources:
* Max Weber 1978 “Economy and society”
** Siobhán O'Mahony and Fabrizio Ferraro 2007 The emergence of governance in an open source community
Matthias Stürmer, Ernst & Young
28. Firms influencing open source projects
Corporations influence open source projects when...
● firms reveal previously proprietary code.
● firms contribute code.
● firms control release management.
● firms employ core developers who previously contributed as unpaid volunteers.
● firms contract intermediary OSS firms and individuals.
Firm-driven open source projects face challenges such as..
● lack of external contributions. (issue 1)
● possible crowding-out effects of intrinsic motivation. (issue 2)
Matthias Stürmer, Ernst & Young
29. Issue 1:
Balancing act between openness and control
Control decreases contributions *
● Transparency increases contributions strongly **
● Accessibility increases contributions slightly **
Balancing is difficult
● Too much control: communities may not contribute with all of their
energy, interest, and creativity
● Too little control: results may not serve the firm's goals
Sources:
* Sonali Shah 2006 “Motivation, governance, and the viability of hybrid forms in open source
software development”; Dahlander and Magnusson 2005 “Relationships between
open source software companies and communities: observations from Nordic firms”
** Georg von Krogh, Sebastian Spaeth, Matthias Stuermer, Guido Henkel 2009 “The Credible
Sponsor: Participants’ Motivation and Organization Attributes in Collaborative Digital Innovation
Matthias Stürmer, Ernst & Young
30. Issue 1:
Effect of control on motivation
Perceived firm attributes Individual Identification, Motivation, and Contribution
⊘
Source: Georg von Krogh, Sebastian Spaeth, Matthias Stuermer, Guido Henkel 2009 “The Credible
Sponsor: Participants’ Motivation and Organization Attributes in Collaborative Digital Innovation
Matthias Stürmer, Ernst & Young
31. Issue 2:
Crowding-out of intrinsic motivation
Source: Matthias Stürmer, LinuxTag 2007 Berlin
http://www.slideshare.net/nice/crowding-effects-how-money-influences-open-source-projects-and-its-contributors
Matthias Stürmer, Ernst & Young
32. Agenda
1. Forking today
2. Motivation and the private-collective model of innovation
3. Benefits and best practices of corporate community building
4. Balancing act between openness and control
5. Little surprise...
Matthias Stürmer, Ernst & Young
33. Ernst & Young's
new publication on open source
● For your clients: Why and how to
professionally use open source software
● Content:
● Benefits, risks and good practices
● Professional application of
open source software
● Legal aspects of open source
● Background information on
open source software
P DF o n line end
1
of J une 201
Matthias Stürmer, Ernst & Young