1. Understanding
Open Source
Kiran Jonnalagadda
Founder, HasGeek
Let’s talk about open source.

2. FOSS
Free and Open Source Software
Free Speech, not Free Beer
You are no doubt familiar with the term “FOSS”, for Free and Open Source Software. You
probably are aware that “free” refers to free speech, not free beer, and that the movement
began in the ’80s under the leadership of Richard Stallman.

3. OSS
Open Source Software
But we are not talking about Free Software today. We are talking about Open Source. Free
Software and Open Source are the same thing on the surface, but come from completely
different viewpoints, and Open Source is typically poorly understood.

4. Three Principles
1. Commoditization
2. Complementary Goods
3. Platform & Infrastructure
Let’s look at three principles that affect intellectual property, innovation, competition and
how we come to use the things we do.

5. Commoditization
From Premium to Commodity
Many new innovations come to market as premium products protected by patents and
copyright. The innovator benefits from their innovation, but as the product becomes more
and more integrated into society, there’s rising pressure from clones and alternatives that
provide similar functionality, until the functionality becomes commoditized.

6. The replication cost of
a digital product is zero
Computers work by copying bits from one
place to another for every little operation
Commoditization forces down the price of physical goods until there’s no “premium” margin.
The price you pay is basically the price of manufacturing and distribution. With digital goods,
there is no replication cost, so prices tend towards zero, either via piracy or open source
alternatives.

7. Complementary Goods
Cars and Roads
Blades and Razors
Toothpaste and Toothbrushes
Applications and Operating Systems
Many goods require something else in order to be usable, so producers of one are
incentivized to commoditize the other. If you sell database software, it helps if you don’t
have to sell your client the operating system as well. That is why enterprise vendors invest in
Linux.

8. Platform
Infrastructure
What you sell is your platform and everything below it is infrastructure. You want to keep the
platform yours, but make everyone else share the cost of infrastructure (by open sourcing it
and getting others to use it). The risk is that your platform is someone else’s infrastructure,
and they are incentivized to commoditize you.

9. Linux:
75%
of all kernel development is done by
developers who are being paid for their work
http://www.linuxfoundation.org/news-media/announcements/2012/04/linux-foundation-releases-annual-linux-development-report
Just how much of open source is produced by commercial entities with a profit motive? The
Linux Foundation says 75%, contrary to popular opinion that open source is mostly produced
by amateurs who believe software should be free.

10. GNOME Desktop: over
70%
of the commits to the GNOME releases are
made by paid contributors (as per 2010 census)
https://blogs.gnome.org/bolsh/2010/07/28/gnome-census/
And it’s not just the Linux kernel. The GNOME project reports similar figures. You’ll find this
to be the case with any large open source project that is an infrastructure layer for other
projects.

11. Dual Premium
Licensing Functionality Services
Open Source
The three main ways to run a commercial operation that produces open source: 1. Dual licensing (typically with
copyright assignment), a popular but increasingly distrusted model; 2. Premium functionality in a commercial
release, which tends to discourage others from becoming stakeholders in the project; and 3. Services or products
that aren’t sold as code. Some of the best examples of successful open source projects are in this category,
including projects as diverse as Linux, GNOME/KDE, Chromium/Firefox and OpenStack/CloudStack.