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Business models of open hardware

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  • 1. Faculté Polytechnique [ RMLL 2013, Bruxelles – Monday 08th July 2013 ] Business models of open hardware Department of Economy and Innovation Management Dr Ir Robert Viseur
  • 2. 2 / 36 Part 1 Basis about software licenses and business models
  • 3. 3 / 36 Protection of computer softwares No specific law. Covered by copyright. Possibility to patent software. – In particular cases in Europe (e.g. industrial process). – Widely used in United States. Legal rights and duties explained in licenses (contract). – The licenses are build on copyright but can also refer to commercial brands and patents.
  • 4. 4 / 36 Software licenses Three types of licenses: – Proprietary licenses. • E.g. CLUF for Microsoft softwares. – Hybrid licences (rare). • E.g. former SCSL for Sun Microsystems softwares. – Free software licenses. • E.g. AL, BSD, GPL, LGPL,... • More or less 70 free software licenses.
  • 5. 5 / 36 Free software licenses (1/3) Two families of free software licenses: – Permissive / academic licenses. – Copyleft / restrictive licenses (licenses with reciprocity). Three types of licenses with reciprocity. – Weak reciprocity. • File-based, or not. – Strong reciprocity. – Network reciprocity.
  • 6. 6 / 36 Free software licenses (2/3)
  • 7. 7 / 36 Free software licenses (3/3)
  • 8. 8 / 36 Business models for free and open source softwares (1/2) Trade-off between value creation and value capture. – Value creation: • Investment in R&D. • Collaboration with community (open source innovation). – Value capture: • Weak appropriability regime. • Often: indirect valuation (eg. services, advertising, etc.).
  • 9. 9 / 36 Business models for free and open source softwares (2/2) Services (« best knowledge here »). – Common services: custom software development, installation and integration, training, etc. – New SaaS and cloud computing opportunities. Dual licensing schemes. – Without technical differenciation. – With technical differentiation. – Opencore schemes (e.g. free kernel + private add- ons).
  • 10. 10 / 36 Part 2 Business models of open hardware
  • 11. 11 / 36 What is open hardware ? Definition from Open Hardware Summit and then Open Source Hardware Association. – See details at http://www.oshwa.org/definition/. Inspired by Open Source Definition from Open Source Initiative (opensource.org). More communly accepted than previous definitions. New initiative: OHANDA label (see www.ohanda.org).
  • 12. 12 / 36 Open Source Hardware (OSHW) Definition 1.0 (1/3) 1. Documentation – The hardware must be released with documentation including design files, and must allow modification and distribution of the design files. 2. Scope – The documentation for the hardware must clearly specify what portion of the design, if not all, is being released under the license. 3. Necessary Software – If the licensed design requires software, the interfaces must be sufficiently documented or the necessary software must be released under an OSI- approved open source license. 4. Derived Works – The license shall allow modifications and derived works, and shall allow them to be distributed under the same terms as the license of the original work.
  • 13. 13 / 36 Open Source Hardware (OSHW) Definition 1.0 (2/3) 5. Free redistribution – The license shall not restrict any party from selling or giving away the project documentation. 6. Attribution – The license may require derived documents, and copyright notices associated with devices, to provide attribution to the licensors when distributing design files, manufactured products, and/or derivatives thereof. 7. No Discrimination Against Persons or Groups – The license must not discriminate against any person or group of persons. 8. No Discrimination Against Fields of Endeavor – The license must not restrict anyone from making use of the work (including manufactured hardware) in a specific field of endeavor.
  • 14. 14 / 36 Open Source Hardware (OSHW) Definition 1.0 (3/3) 9. Distribution of License – The rights granted by the license must apply to all to whom the work is redistributed without the need for execution of an additional license by those parties. 10. License Must Not Be Specific to a Product – The rights granted by the license must not depend on the licensed work being part of a particular product. 11. License Must Not Restrict Other Hardware or Software – The license must not place restrictions on other items that are aggregated with the licensed work but not derivative of it. 12. License Must Be Technology-Neutral – No provision of the license may be predicated on any individual technology, specific part or component, material, or style of interface or use thereof.
  • 15. 15 / 36 Protection of hardware (1/3) Some items to protect: – the source code for electronics (e.g.: VHDL or Verilog source codes), – the source code for associated softwares (e.g. development tools, SDK, etc.), – the schematics, the design files and the technical drawings (hardware design), – the aesthetic value, – the documentations, – the brands. IP tools: mainly copyrights, industrial design rights, patents and trademarks. – Other: protection for the topographies of semiconductor products.
  • 16. 16 / 36 Protection of hardware (2/3) Frequent use of Creative Commons licenses. – Attention to NC clause. Frequent use of widely used free software licenses. – Mainly BSD, GPL and LGPL. Dedicated licenses. – Examples: TAPR OHL (see www.tapr.org/ohl.html) or CERN OHL (see www.ohwr.org/cernohl).
  • 17. 17 / 36 Protection of hardware (3/3) Licenses in real life (Viseur, 2012):
  • 18. 18 / 36 Business models of open hardware Business models in real life (Viseur, 2012):
  • 19. 19 / 36 Size of the market (1/2) Strong rise of the number of projects (Torrone & Fried, 2010):
  • 20. 20 / 36 Size of the market (2/2) Report from (Torrone & Fried, 2010): – 13 companies representing approximately $50 million. – About 200 projects in 2010. – By 2015: +$1 billion collective.
  • 21. 21 / 36 Still a blurred concept ? Boundaries between openness and freedom not always clear but... – Ongoing standardization of the definition. How open is open enough ? – Open hardware often build on closed components. – Community activities not always clear... How to identify sustainable projects ? – Think about free software success factors. – Examples: modularity, standards, open governance (community / ecosystem), etc.
  • 22. 22 / 36 Part 3 Examples of open hardware commercial projects
  • 23. 23 / 36 LEON (Gaisler) (1/2) VHDL model for 32 bits SPARC- compliant processor. – Created by Jiri Gaisler and now supported by Aeroflex Gaisler company (www.gaisler.com). – SPARC: RISC open instruction set architecture and registered trademark of SPARC International, Inc. – See more at http://en.wikipedia.org/wiki/SPARC and http://www.sparc.org/.
  • 24. 24 / 36 LEON (Gaisler) (2/2) Wide portfolio of products (LEON family, and others) and services. One of the products: GRLIB IP Library. – Dual licensing scheme. • Licenses: GPL or commercial license. • See http://www.gaisler.com/index.php/products/ipcores/soclib rary.
  • 25. 25 / 36 Arduino (Smart Projects) (1/3) Open source electronics prototyping platform. – See http://www.arduino.cc/ for more details. – Manufactured by the Italian company Smart Project (smartprj.com). – Available with open source development softwares. – Tremendous success.
  • 26. 26 / 36 Arduino (Smart Projects) (2/3) Enablers: – Cheap, simple, released with integrated tools. – Wide ecosystem. • New open projects based on Arduino hardware. • Examples: DIY Drones (diydrones.com), Photoduino (photoduino.com), etc. – Format for technically compatible extensions (shields). Several forks (true free project). – Imitations and variations. – Examples: Freeduino, Sanguino, etc.
  • 27. 27 / 36 Arduino (Smart Projects) (3/3) Licenses: – Design covered by CC-BY-SA license. – Source code covered by GPL or LGPL licenses. – Arduino is a trademark. Revenues: – Over $1 million in 2010 (Torrone & Fried, 2010). – Based on services and sale of products.
  • 28. 28 / 36 Bug Labs Lego-like hardware platform. – More and more closed source ? Original concept of BUGswarm. – M2M component connected to cloud. – See example here: http://lelylan.com/blog/bugswarm/.
  • 29. 29 / 36 Elphel (1/2) Elphel 353/363 network camera (www.elphel.com). License: software and hardware under GPL v2. – See http://www3.elphel.com/wiki/licensing for more details. Revenues from the sales of products (several product lines). Source of inspiration and technical basis for other projects. – Examples: Frankencamera prototype or Axiom project.
  • 30. 30 / 36 Elphel (2/2) Future project: Apertus (camera for cinema). – Friendly fork (?): Axiom. • First open digital cinema camera Axiom. • Licenses: – Software under the GNU General Public License V3. – Documentation under the Creative Commons License. – Hardware under the Cern Open Hardware License. • Partnership with Dynamic Perception (www.dynamicperception.com). – See https://www.apertus.org/history.
  • 31. 31 / 36 XiVO (Avencall) (1/2) Avencall: integrator and editor of VoIP solutions. – XiVO: IP telephony and Unified Communications solution. – 2010: launch of XiVO Open Hardware project (see http://blog.xivo.fr/).
  • 32. 32 / 36 XiVO (Avencall) (2/2) XiVO Open Hardware: – Accredited by OHANDA. • See http://0001-0001.okey.ohanda.org. – Available source code. • See http://git.xivo.fr/?s=xioh. – CE marking certification.
  • 33. 33 / 36 Stay tuned New exciting projects: – Example: OpenEnergyMonitor system. • Wireless sensor nodes that send data at periodic intervals to a web- connected base-station. • Based on Arduino. – See more details at http://openenergymonitor.org/emon/opensustech. New opportunities due to progress in: – CAD open source softwares. • See http://linuxfr.org/news/linux-et-la-commande-numerique- par-calculateur. – 3D printers. • See http://linuxfr.org/news/la-fr%C3%A9n%C3%A9sie-des- imprimantes-3d.
  • 34. 34 / 36 Thanks for your attention. Any questions ?
  • 35. 35 / 36 Some useful readings... Baldwin, C.Y., Hienerth, C. and von Hippel, E., « How user innovations become commercial products: a theoretical investigation and case study », Research Policy, 35, 9, 2006, pp. 1291–1313. Torrone, P., Fried, L., « Million dollar baby - Businesses designing and selling open source hardware, making millions », O’Reilly’s foo camp east 2010, Microsoft’s NERD center (MIT campus). Available at www.adafruit.com (read: March 6, 2012). Viseur, R., « From Open Source Software to Open Source Hardware », Open Source Systems: Long-Term Sustainability. Springer Berlin Heidelberg, 2012. pp. 286-291.
  • 36. 36 / 36 Contact Dr Ir Robert Viseur Mail : robert.viseur@umons.ac.be Phone : 0032 (0) 479 66 08 76 Website : www.robertviseur.be. This presentation is covered by « CC-BY-ND » license.