1. The Business of “Open”
November 2009
SANGKI HAN, Ph.D.
Professor
Graduate School of Culture Technology
KAIST
2. Commons-based Peer
Production
• Yochai Benkler @ Harvard Law
School and Berkman Center for
Internet & Society
• A socio-economic system of
production that is emerging in the
digitally networked environment
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3. Peer Production and
Sharing
Since 2005, over 5000
individual developers
from nearly 500
different companies
have contributed to the
kernel.
GNU
Linux
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4. Who Writes Linux?
Linux Kernel Development
[Linux Foundation, Aug. 2009]
WHO IS SPONSORING THE WORK
The Linux kernel is a resource which is used by a large variety of companies. Many of those
companies never participate in the development of the kernel; they are content with the software
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as it is and do not feel the need to help drive its development in any particular direction. But,
as can be seen in the table above, an increasing number of companies are working toward the
5. }
Business Model for 2008/2009 ANNUAL PLAN
[
Peer Production
This year’s Annual Plan includes increased spending on technical infrastructure to keep pace with Wikipe -
dia’s growing audience, the establishment of the Wikimedia Foundation’s first fundraising team, and the
hiring of additional software developers and staff with responsibility for public outreach and partnerships.
The Annual Plan anticipates increased revenues, due to the establishment of the dedicated fundraising
team. All figures in thousands of dollars.
[[2008/2009 Budget]]
Wikimania $96K [7] Board $130K [1]
Legal $357K [6]
• Licensing and Professional Service Programs $595K [5]
Office of the
Executive Director $472K [2]
- GPL for GNU and Free Software Finance & Admin. $1,619K [4] Technology $2,705K [3]
✓ As of August 2007, the GPL accounted for
nearly 65% of the 43,442 free software Total $5,974,000
[1] Includes board meeting expenses, D&O insurance. [2] Includes salaries for admin staff, audit fees, fundraising expenses, office rent, office supplies, bank fees, etc.
projects listed on Freshmeat Executive Director and Deputy Director; some fundraising and travel expenses; consul-
tants and contractors; staff and volunteer development. [3] Includes salaries for techni-
cal staff, servers, bandwidth and contractor expenses. [4] Includes salaries for finance/
[5] Includes salaries for program staff, public outreach expenses, communications expenses.
[6] Includes salary for General Counsel, and external counsel and consultant fees, filing fees, etc.
[7] Includes travel for board, advisory board and staff.
✓ Dual Licensing / Distribution & Service [[2008/2009 Projected Revenue]]
Model/ The Ecosystem Strategy / Dual Other Revenue $24K [4]
In-Kind Revenue $500K [5]
Product Model / The Web-Based Ad Model Earned Income $811K [3]
• Donation Community Gifts $3,000K [2] Major Gifts and Grants $3,000K* [1]
• Selling manuals, t-shirts, stickers, mugs, etc. Total $7,335,000
[1] Donations of more than 10K *Includes 1M from Sloan Foundation. [2] Donations [4] Includes income from sponsorships, interest, and foreign exchange gains.
less than 10K. [3] Income from live feed deals, trademark deals, etc. [5] In-kind donations.
[source: Wikimedia Foundation]
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8. Open Platform
• A software system which has
published external
programming interfaces (API)
that allow using the software
to function in other ways
than the original programmer
intended, without requiring
modification of the source
code
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9. Open Standard vs.
Open Source
Open Standards vs. Open Source
Attribute Open Standards Open Source
Nature Set of specifications Software code
Openness of interface By definition By design
Interoperability Enabled Cannot be assumed
Licensing Various types Various types (GPL, BSD, etc)
Development model Collaborative Collaborative
[Source: Roadmap for Open ICT Ecosystems by Berkman Center]
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Service Orientation
14. Webmail Windfall
Since each page of webmail comes with ads, more users means more revenue.
Chart: Steven Leckart; Chart design: Nicholas Felton @ WIRED
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15. How Can a CD Be Free?
Chart: Steven Leckart;
Chart design: Nicholas
Felton @WIRED; Sources:
Daily Mail, O2 Arena
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16. Free Business Models
From: “Free! Why $0.00 Is the Future of Business” by Chris Anderson @ WIRED
• Freemium
- Coined by Fred Wilson
- Flickr
• Advertising
• Cross-subsidies
- Cell phones, ‘free lunch’
• Zero marginal cost
- Online music -- Some artists give away their music online as a way of marketing
concerts, merchandise, licensing, and other paid fare
• Labor exchange
- Rating stories on Digg, voting on Yahoo Answers, or using Google's 411 service
• Gift Economy
- Altruism
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17. thank you and meet me at
Facebook: stevehan
Twitter: steve3034
me2day: steve3001
socialcomputing.tistory.com
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