Open Source as IT and Business Strategy

Open Source
as
an IT & Business Strategy
for emergent countries

Prof. Karim Baïna

Responsible of Alqualsadi research team
on Enterprise Architecture
ENSIAS, Mohammed V Souissi University, Rabat, Morocco

(CC) Prof. Karim Baïna, ENSIAS at « 4ème Journée Open Source ENSA Marrakech », March 31st, 2012

« no national government, if it had
alternatives, would have chosen
th
during the 20 century to accept
dependence for steel or petroleum
on single or small number of
suppliers based in another nation »
Steven Weber, 2003.
2/30


Outline

1. Introduction
2. Opportunity study of open source adoption
3. Open source as a IT strategy
4. Open source : an IT strategy leveraging for Business strategy
5. Open source as a Business strategy
6. Emergent countries and open source software adoption
7. Current state of Morocco in terms of open source
8. Brazil – a Model to follow
9. References
3/30


Introduction –
IT/Business Strategy
The Strategic Alignment Model

Strategic fit

functional integration
http://www.strategic-alignment.com/ Adapted by Preston Coleman et al., 2006 from Henderson & Venkatraman (1990) 4/30


Introduction – Business/IT
Alignment Perspectives

Adapted by Preston Coleman et al., 2006 from Pap (1995) 5/30


Alqualsadi research team
Enterprise Architecture, Quality of their Development and Integration

Alqualsadi* research team stands for
Enterprise Architecture, Quality of their Development and Integration

* Abou Al Hassan ibn Ali ibn Muhammad Alqualsadi (1412-1486) 6/30
Arithmetics, Algebra, Astronomy (father of X and √ symbols)

Open source as a Business opportunity
for governments & private sector (1)
● Equity : Strengthen brand and Build brand equity

● Education & Human ressources :
– Develop Regional HR capacity building more qualified than
off-shoring point of view
– To raise mind share

● Governance
– Improve effectiveness, efficiency
– Minimise country/enterprise IT business model dependence
to commercial monopoly of an elite group of suppliers (for
IT sector : e.g. proprietary software retailers)
7/30


Open source as a Business opportunity
for governments & private sector (2)
● Economic development
– Develop a local software industry in the IT sector with new
business opportunities & models
– Develop Regional markets (local language support – not just
English, French etc.)
– Exploit indirect revenues of OSS services

● Budget economy
– Reduce IT budget (CAPEX) in the cost model
– Make software affordable
– Save foreign currency

8/30


Open source as a Technical Opportunity
for governments & private sector
● IT Governance
– Handle definitely IP rights & licences (GPL, LGPL...) establishing open source strategy
rather than tolerating software piracy
– Let the licence price (if applicable) a secondary decision criteria for the « build-versus-buy-
or-integrate your self » questions
– Minimise country/enterprise IT infrasctructure dependence to commercial monopoly of an
elite group of suppliers
– Share IT risks, ressources/knowledge, value/successes, performances with the world wide
open community
● IT Reliability
– Keep faults/bugs correctable by the users
● IT Security & autonomy
– Keep algorithms tranparent to the users
● eg. governments, such as China, perceive proprietary software’s hidden protocols as
threats to their national security, Nir Kshetri, 2003

9/30


for governments & private sector –
Introduction to IT Cost Model
David Chisnall, 2006
Total Cost of Ownership may be computed as follows
1. Capex : The "purchase price"* of the system (hardware & software
licence)
2. The cost of switching to the new system (« In-Transition » - entry
ticket)(deployment costs, training costs, project management costs,
adaptation/development/integration costs...)
3. Opex : The cost of maintaining the system (operations staff, help
desk, staff who fix problems, technical staff on supporting the live IT,
technology upgrades and refreshes, operation and support
management costs)
4. The cost of switching away from the system (« Out-Transition » -
exit ticket)(cost of dependence on black box system not based on
standard/open formats/protocols)
10/30


OSS Capex
Sanjiva Weerawarana et al., 2004 & Rishab Aiyer Ghosh 2004

In Morocco,
Piracy is about 60%
(Dounia Essabban, 2006)

● When labor costs are high, as it is in developed countries, the Capex is a small
fraction of the TCO. However, when labor costs are low, as it is in developing
countries, the license fee can easily be the dominating factor of the TCO.
● OSS of course typically has little or no license cost compared to proprietary software.
● NB. * WinXP (+MSOffice) Cost (normalised with US$ cost of live 2003) =
– (Cost in USA) $560 * (U.S. GDP p capita / Country GDP p capita)
11/30


Does open-source reduce the cost of IT investment in developing countries?

● Quite possibly. We already see just having the choice and the
competition offered by open source being used to reduce costs.
● However, I think that if the developing country is serious about
not just seeing IT as a cost center, but as a requirement for
national development, the real advantage of open source
ends up being able to build up your own knowledge base.
● And that is not cheap in itself – you’ll likely pay as much for
that as you’d pay for a proprietary software solution.
● The difference being that with the proprietary solution, you’ll
never catch up, and you’ll have to pay forever, without ever
learning anything yourself.
Linus Torvalds, Father of Linux
12/30


Open source as IT strategy

Sanjiva Weerawarana et al. 2004 13/30


Implementing OSS IT Strategies
Steven Weber, 2003
● At a high level of generality there are three sets of policy
implementation options to be considered by governments:
– Formal approaches (such as legislation or a government strategic
plan) versus more informal, flexible approaches to letting OSFS
use evolve.
– Level of involvement : subnational, national, regional
collaboration.
– Mode of development : public sector adoption of OSFS versus
private sector adoption, and collaboration among various users.
Country Formality National sub- regional anti- Security & IP
national dependence autonomy Rights

Brazil High ** ** * **

Argentina Medium- ** **
High
China Medium ** * ** * **

India Low * * 14/30


What kind of policy frameworks are
appropriate to enable the success of
open-source in developing countries?
a) Hold off on Internet tariffs, licensing, and control until the industry is mature enough that one
understands its dynamics. As I understand it, Ghana is having problems right now with cybercafes
providing Voice Over IP technology, which is seen as being contrary to the stateowned
telecommunications company. Since open source only works over the Internet, policies that favor the
use and spread of the Internet are essential to building a healthy open source community.
b) Give strategic weight to IT vendors or internal solutions that incorporate open source
technologies, but don’t mandate that all IT solutions are open source !

c) Create a “CTO” for Open Source technologies in government who reports at a very high level.
Have this person be responsible for staying on top of the use of OSS in the government, establishing
standards, encouraging different groups to work together on common solutions, etc. Such a person
may communicate very frequently with those outside the country as well.
d) Have public education facilities that teach technologies focus on open source technologies as
much as possible. That is, when someone takes a class in Operating Systems, have them learn about
how they work by studying Linux.
e) Provide some funding, not a huge amount but enough for a dozen techies plus a manager or two,
whose job it is to ensure that the popular OSS software in the world is localized for the language of the
developing nation. Most OSS these days have a good story with respects to support for alternative
charsets and encodings, but simply need the manpower to provide and maintain the translation
bundles. Doing this legwork helps ensure the OSS tech. remain available for this nation citizens.
15/30
Brian Behlendorf, Co-Founder Apache

Open source as IT strategy –
obstacles in emergent countries
● Power of software industry lobbies
● Free software Capex & Psychological price : « expensive is
better »
● Globalisation & Agressive marketing : « brands obsession »
● Inferiority complex : « foreign is better »
● Confidence in Companies more than on Communities :
« tailored & customised technical support »
● Absence of Open source in government IT policies
● Government IT policies are more off-shoring oriented
16/30


Open source : an IT strategy
leveraging for Business strategy
– alignment map example
OSS as Biz Strategy

Sanjiva Weerawarana et al. 2004
OSS as IT Strategy

17/30


Open source as Business strategy –
business models

Wilfred Dolfsm, 2006

Domestic markets Global markets



Open source as Business strategy
business models for open innovation through
OSS development
● 4 “Open Innovation” models for OS as a Business Strategy
– Pooled research : Pool resources to innovate in a
common platform, exploit results (e.g. Linux, Mozilla)
– Spinouts : Release some non-core innovation in a
separate body, but stay involved (e.g. Eclipse,
OpenSolaris, Jikes, Beehive)
– Selling complements : Income from complements,
shared innovation in a common OSS core (e.g. Oracle
Http Server & IBM WS/Apache, Safari/Konqueror, Android
& Apps /Linux)
– Donated complements : Income from a proprietary
core innovation, seek donated labor for valuable
complements (e.g. Early BSD Unix, Matlab Central)
Joel West et al. 2006 19/30


OSS development Business Strategy
vs off-shoring/outsourcing
Business Strategies
● environment the country is well suited to exploit outsourced and
offshored manufacturing and services of OSS products
● OS provides a unique opportunity to build software development skills
in areas of the software stack, which do not form part of the bread
and butter off-shoring/outsourcing work, which developing countries
are typically exposed to.
● It is likely that the off-shore model, rather than the outsourcing model,
will be the first approach in these businesses, as that allows
businesses in developed countries to retain a degree of control and
for the developing country to yet have a viable business model.



Open source as Business strategy –
some conditions for success

● High level sponsorships : governments, companies,
communities, niche, donnors
● High IT infrastructure development
● Inexpensive technical manpower
● High IT skill developers & developer communities
– one of the most successful open source software foundations of the
world, the Apache Software Foundation, uses community
strength as the litmus test to decide on whether to embark on a
project

21/30


Developed countries and OSS adoption

Jean-Jacques Gauguier et al., 2005
adapted from Dravis (2003) and Weerawarana & al. (2004)

22/30


Emergent countries and OSS adoption

Jean-Jacques Gauguier et al., 2005
adapted from Dravis (2003) and Weerawarana et al. (2004)

23/30


Current state of Morocco in terms
of open source (1)
● Annual National Open Source Contests
– Innov'IT (ex-CMOS) since 2008 sponsored by the
Association of Information System Users in Morocco
(AUSIM)
– Apps Challenge (ex-Android Development Challenge)
since 2010 sponsored by a telecom operator
● Annual National Open Source days
– Software Freedom Day at Casablanca (since 2009)
– Each Engineering School or Science Faculty has its own
Open Source day & Linux Install Party (since EMI 1999)
● Education :
– Many Universities include OSS in their curricula 24/30


Current state of Morocco in terms
of open source (2)
● OSS in Ministries & Public Administrations :
– More than 40% of use (mainly OS, Office Suites, Programming frameworks) Taieb
Debbagh, at RALL 2007 - 3ème rencontres africaines des utilisateurs de logiciels
libres)
– Ministries of Finance, Cooperation and Foreign Affairs
● OSS in Enterprises :
– Many OSS Service Enterprises are created (SSLL - Sociétés de Service en Logiciels
Libres)
– Many Businesses adopt OSS “for practical issues not for free software ideology” :
LAMP, Spring, Apache, Tomcat, Jboss, Liferay, Alfresco, jbpm, Activiti, Bonita,
OpenERP, Sugar CRM, Open LDAP, Pentaho, Mule ESB, Talend, Zope, Plone,
Joomla, Drupal, ...
● OSS and Moroccan IT Strategy & High Level sponsorship :
– OSS is not mentioned by the Moroccan digital strategy “Maroc Numeric 2013”
● OSS Developers & Users Communities & Associations :
– Among others : OSIM (Open Source In Morocco), Ubuntu-MA...
25/30


INSEAD 2011

Current state of Morocco in terms of innovation :
The Global Innovation Index 2011 - ranking

--

HI : High Income
LM : Lower-Middle
UM : Upper-Middle
LI : Low Income
ECS : Europe & Central Asia
MEA : Middle East & North Africa
SSF : Sub-Saharan Africa
EAS : East Asia & Pacific;
SAS : South Asia 26/30
NAC : North America
LCN : Latin America & Caribbean
st
(CC) Prof. Karim Baïna, ENSIAS at « 4ème Journée Open Source ENSA Marrakech », March 31 , 2012
0 .0 0 8.75 17 .5 0 26 .2 5

INSEAD 2011

27/30


Brazil - A Model to follow
● By mid-2002, many Latin American countries such as Brazil had proposed bills mandating
the use of open source in government organizations.
● Brazil is one of the countries where policies regarding adoption of FOSS have been
successful, notably in the states of Rio Grande do Sul and Pernambuco. Four cities –
Amparo, Solonopole, Ribeirao Pires, and Recife – have passed laws giving preference to
or requiring the use of software libre, and other municipalities, states, and the national
government have considered similar legislation.
● The Brazilian government is recommending that its agencies have Linux installed in all
new computers from 2004 on. Also, the Brazilian Navy has been using FOSS since 2002.
● Since 2000, the Brazilian government has been funding a large-scale open source GIS
project. The project is TerraLib, an open-source library for GIS and associated
applications (Câmara et al., 2000). TerraLib enables quick development of GIS
applications and is available at www.terralib.org. In early 2006, more than 10 private
companies in Brazil developed products using TerraLib. The latest Brazilian GIS market
survey estimates the total market to be US$150 million, with 200 companies and 4,000
employees (Magalhaes & Granemman, 2005). The service provider market is estimated to
be US$40 million. Companies offering GIS services based on open source software form
15% of the service provider market.
Gilberto Câmara, 2007 28/30


References
1. Steven Weber, Open Source Software in Developing Economies, 2003.

2. Sanjiva Weerawarana, and Jivaka Weeratunga, Open Source in Developing Countries, SIDA, Sweden, 2004.

3. Rishab Aiyer Ghosh, The Opportunities of Free/Libvre/Open Source Software for Developing Countries, -ICTSD Dialogue on the pro-
development IP agenda forward: Preserving Public Goods in health, education and learning, 29 November – 3 December 2004.

4. Nir Kshetri, Economics of Linux Adoption in Developing Countries, IEEE Software, 21 (1), 74-81, 2004.

5. Jean-Jacques Gauguier, and Rémi Douine, Local Software and Local Content Production Challenge in Developing Countries. What
Can Be Learned from Open Source and Creative Commons Paradigms, Communications & Strategies, N° 58, 2nd Q. 2005.

6. Joel West, and Scott Gallagher, Patterns of Open Innovation in Open Source Software, in Open Innovation: Researching a New
Paradigm, Oxford University Press, 2006.

7. Preston Coleman, and Raymond Papp, Strategic Alignment : Analysis of Perspectives, 2006 Southern Association for Information
Systems Conference, 2006.

8. David Chisnall, Making Effective Software TCO Calculations, InformIT, 2006.

9. Wilfred Dolfsma, Tight prior open source equilibrium: The rise of open source as a source of economic welfare, First Monday, Volume
11, Number 1 - 2 January 2006.

10. Gilberto Câmara, Frederico Fonseca, Information Policies and Open Source Software in Developing Countries, Journal Of The
American Society For Information Science and Technology, 58(1):121–132, 2007.

11. Jesus M. Gonzalez-Barahona, and Felipe Ortega, Economic Aspects of Libre Software, 2010.

12. INSEAD, Soumitra Dutta ed, The Global Innovation Index 2011, Accelerating Growth and Development, 2011.
29/30


Merci pour votre attention
avez-vous des questions ?

Prof. Karim Baïna

@kbaina

www.slideshare.net/kbaina/
made with :

30/30


Open Source as IT and Business Strategy

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