Open Source Maturity Curve and Ecosystem

Open source maturity curve and ecosystems Tony Bailetti Systems and Computer Engineering and Sprott School of Business Bailetti@sce.carleton.ca Eclipse Summit October 29, 2009

1. Motivation • Increase value from engaging with open source projects and vendor-neutral business ecosystems • Use ecosystems to solve very different problems • Reduce cost and increase speed and flexibility of high diversity, multi-player collaboration 2 2

Agenda 1. Value from open source 2. Business ecosystem components 3. Use ecosystems to create and retain tech jobs 4. Takeaways 3 3

2. Value from engaging with OS project Value for company 5. Redefine 4. Co-create 3. Build new 2. Extend what exists 1. Use & promote Engineering Effort Business 0. Deny How company chooses to interact with OS projects determines value it can extract 4 4

Authority and effort increase with levels Business Level 4 Co-create Level 1 Use & promote Products Market 5 5

Value to community Value for 5. More ecosystem company links & resources 4. Greater commitment to healthy ecosystem 3. More new applications, greater project participation & leadership 2. More features, better quality 1. No change in code, more users & awareness Effort 6 6

Engagement of 163 Eclipse members • 65 operate at just one level, 98 operate combinations • None just Co-creates or Redefines • 4% just Use & promote 14 22 13 • 67% do not Co-create 12 0 10 0 • 10% operate in first four levels 28 31 9 • 18% Co-create and do one other level 6 16 2 • 5% Co-create, Extend what is, Build new 7 7

Perspectives about Eclipse Value for 5. ??? company 4. Concurrently advance multiple projects & integrate 3. Create & drive adoption of new applications that use Eclipse platform 2. Add features to existing applications 1. Use to develop or as part of deployment stack Effort 8 8

2. Business ecosystem’s 5 key components 1. Keystone 2. Niches collaborate 3. Customers pay for market Out of box to develop base platform offers that rely on base element element Services Company N $ IP regime . Customer . Mk Base element . offer Company 2 $ . Governance Customer . . Company 1 $Mk offer Customer Mk offer X XZ XYZ Z 5. Ecosystem health 4. Member types • Diversity •Productivity Companies & individuals use an out-of-the-box platform •Commitment (assets, processes, norms) to create and deliver value to •Predictability customers, partners, themselves, and community 9 9

Notes • Ecosystem types Eclipse • Base element: Defense departments software, hardware Linux design, process, content, scientific knowledge • Ecosystem is more than a development community Money + governance + IPR, not just development Rewards performance of multi-organization collaboration, not developer collaboration Scale depends on member size and diversity, not just number of talented developers 10 10

Keystone’s main responsibilities • Out of box rules to collaborate and compete Compete: Build competitive differentiators for which customers are willing to pay Collaborate: Platform for which Base element Work with others to produce base keystone is elements responsible • Attracts talented volunteers to collaborate • Recruits members • Develops and fosters adoption of base elements • Provides governance and IP regime • Delivers services to ecosystem members • Maintains ecosystem healthy 11 11

Benefits of business ecosystems Small and medium size businesses Governments • Access to deal flows and • Attract and retain knowledge jobs, opportunity fulfillment innovative companies and private investment • Customer pull for rapid innovation • Attract significant resources to • Share business development and focus on government priorities R&D costs • More resilient to external shocks • Fast and favorable access to and economic downturns sophisticated capabilities worldwide • Create systemic change required to move to new economy • No lock-in by powerful companies • Shape what exists into a system • Lower cost of entering markets in that produces outcomes with high which they can’t operate today impact • High quality mentoring • Higher return on government investment with less risk • Common process across sectors 12 12

3. Problem in Canada’s Capital Region • Tech-sector employment from 72,400 in May 2000 to 53,100 in August 2009 (~30% drop) • Lost 8,600 jobs over past 12 months • Venture capital investment from $1.3 billion in 2000 (74 deals) to less than $24 million in 2009 (1 deal) • Fallout from Nortel’s bankruptcy • No large company expects to create jobs • All three levels of government unprepared to deal with tech meltdown in region • 1,800 tech start-ups, small number of mid size, 1 IPO in last 20 years • Families and community hurt 13 13

Response: Ecosystems ? Pervasive Net Auto Lead to Win VE Mobile Media Coral Apps $400 k CEA $37 M • 4 phase process • Each company in Each vertical ecosystem to operate phase III creates 6+ multi million $ specialized asset tech jobs • Building blocks • Services: • Co-creating using sandbox • Talent Talent First • Lead projects • Open source Network • Knowledge and dissemination stacks $2 M • Business development • OSBR.ca • Commercialization # of technology jobs created $ risk capital invested # of students educated for creative economy 14 14

Overview of three ecosystems Mandate Base Success Scope element Lead to Win Launch and grow • Wealth • # tech jobs Region technology creation • Amount of risk other businesses process capital investment regions Coral CEA • Provide member • Software • # tech jobs Canada (Communications companies assets in $15.3 • Amount of risk  Global Enabled building blocks, M sandbox capital investment Applications) commercialization # apps that use support and out Sandbox of box process to • # new CEA differentiate offers companies • Fill gaps in • Keystone income commercialization Talent First • Thought • Open source • # tech jobs Province Network leadership stacks • # companies that • Fill gaps in • Knowledge make money from commercialization open source assets 15 • # grad students 15

LTW largest provider of incubation services 1. Keystone 2. Niches collaborate to 3. Customers pay for market Community develop base element centric out of offers built on top of or box platform extension to base element 66 Founders Services Company 49 $ 25 Contractors . Customer Base element: . Mk 42 Reviewers • mutants . offer 14 Faculty • opportunities Company 2 $ . Customer . 7 Alumni Governance Company 1 $Mk . 6 Service providers offer Customer Mk 5 Recruiters offer 9 Strategic 42 Associates 4. Member types 5. Ecosystem health • # of tech jobs • Amount of private investment • #, diversity and rate of introduction of market offers 16 • Keystone’s income 16

New wave of ICT innovation Components + Coral CEA Large 1. Sandbox prototype environment Competitor 2. Lead projects Services SME3 3. Commercial services European Customer 4. Knowledge & dissemination x x x 5. Business US Orchestrator development x SME1 • $15.3 M Sandbox Keystone SME4 Whole • $10.5 M cash x SME2 x x product • ? Member fees Members • Ecosystem provides small company proprietary advantage to compete against large suppliers • Most benefit to companies that are small with no brand recognition and no money to absorb development and distribution costs 17 17

Talent, stacks and thought leadership Ontario Talent First Network Carleton Technology Innovation Lead Customers Content suppliers Management • Provide requirements • Create useful information • Validate ideas • Stimulate customer interest • Contribute ideas for improvements and foster community • Become users of new commercial products Capital Suppliers • Government, venture capital Innovators • Monetize innovators’ new offers • Creative individuals interested in starting and growing new businesses for the new economy • Generate revenue for themselves and other Serial Entrepreneurs ecosystem members • Experienced repeat • Extend value of Ecosystem tools and platform entrepreneurs • Provide advice and guidance • Enables commercialization of market offers that rely on open source assets (e.g., SW, HW, process) 18 18

4. Takeaways • Ignore business ecosystems at your peril • Ecosystems can:  Harness innovative individuals worldwide  Launch and grow technology companies  Create and retain jobs and attract private investment  Enhance experience of graduate students • Knowing how to establish and enable business ecosystems is a key competitive advantage 19 19

References • Bailetti, Antonio (2009) Business ecosystems: new form of organizing creative individuals worldwide. Carleton University Alumni Conference in Toronto, February 12. • Bailetti, Antonio (2008) Ecosystem approach to commercialization of technology products and services. TIM Lecture, March 28. • Carbone, Peter (2007) Value derived from open source is a function of maturity levels. Partnership Conference, April 19. • Carbone, Peter (2009) Emerging promise of business ecosystems. Open Source Business Resource, February. • Hurley, Brian (2009) Enabling the creative entrepreneur. Open Source Business Resource, August. • Lombardi, Stephen (2008) Interaction between Eclipse Foundation members and Eclipse projects. Carleton University thesis, Department of Systems and Computer Engineering. • Milinkovich, Mike (2008) A practitioner’s guide to ecosystem development. TIM Lecture, September 3. • Moore, James (2006) Business ecosystems and the view from the firm. The Antitrust Bulletin, Vol 51, No. 1, Spring 31-75. • Skerrett, Ian (2008) Building technology communities. TIM Lecture, June 4. 20 20

Thank you! www.carleton.ca/tim www.leadtowin.ca www.coralcea.net www.talentfirstnetwork.org/wiki 21 21

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Open Source Maturity Curve and Ecosystem

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