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Open Mind

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  • 1. OpenMind 2008 1 Open Source Software Business in Finland - Results of the National Survey 2008 Nina Helander Mikko Rönkkö Mikko Puhakka These slides are available online at http://www.sbl.tkk.fi/oskari/Publications.html
  • 2. 2 Research interests 1. To provide an estimate of the degree of use of open source software in the software industry • Understanding the patterns of adoption • Defining the determinants of adoption 2. To provide an estimate of how common and what kind of open source business models exist in the industry • How is money made • What is the relationship with community (if one exists)
  • 3. 3 Different OSS user types OSS CONTRIBUTION INCREASES OSS OSS OSS ACTIVE LAUNCHING OTHER APPLICATION AS TOOLS COMPONENT PARTICIPATION NEW PUBLIC/ UTILIZERS IN R&D INTEGRATION & MANAGEMENT COMMUNITIES PRIVATE OF OSS INFLUENCE COMMUNITIES BUSINESS SOCIOLOGY LAW TECHNOLOGY COMPLEXITY OF THE OSS MANAGEMENT FRAMEWORK INCREASES Source: OSSI Research Project 2006
  • 4. 4 Research process National Software Industry Survey • A survey of all Finnish software product firms and a large part of service firms • Mailed to 3 639 firms in April 2008, 660 respondents Follow-up study on firms that are involved in open source • A survey of the firms that indicated involvement with open source software • Mailed to 430 firms Statistical analyses More information about the National Software Industry Survey can be found online at http://www.sbl.tkk.fi/oskari/
  • 5. 5 Examples of survey questions Main survey • Five questions concerning the user of open source software and relationship to developer communities Follow-up survey • In-house use of open source software • Adoption of open source software • Open source software as a part of offering • Relationship to developer communities
  • 6. 6 Industry characteristics
  • 7. 7 Demographics of the sample Responding companies size distribution according to Revenuefrom software product business revenue from Software Product Business The amount of companies represents 88 % of the total revenues of the whole software industry 5% 5% The average age of the companies was 9 years 8% 0-<0.3M€ Location: the industry is very concentrated 0.3-<1M€ ● Capital area: 54% of the companies, 79% 15% 1-<3M€ of big companies (revenue of SW product 3-<10M€ business > 3 M €) 10M€- 67% Profitability: average 10,4% (5,6%) ● In 27% of the companies over 15% (22%) ● 12% of the responded companies were unprofitable (17 %) N=545 Size: most companies are small or medium-sized ● 71 % of the companies: revenue of own SW product business less than 300 000 € ● Total revenue/total personnel 110 000 € (110 000 €) ● 45% had less than 5 employees (41%)
  • 8. 8 Development of the Finnish software product industry 2000-2007 Revenue of SW product Industry Level Revenues 2000-2007 business grew by 8,6% Domestic and International Revenues 1,500 and was 1,52 billion International revenue grew by 12%* and was 45% of total revenues of the industry 1,000 Revenue (Milj. €) The value of domestic business increased by 5%* 500 0 2000 2001 2002 2003 2004 2005 2006 2007 Domestic International * Extrapolated to match industry total amount
  • 9. 9 Results from open source analyses
  • 10. 10 Some empirical highlights • 75% of responding firms use open source software • Firms that have open source components in their offering rated themselves more innovative • There is no statistically significant difference between different size classes
  • 11. 11 Empirical insights, continued • A bit less than half have some open source components in the offering • Has previously been at around 20% in this survey • Building and maintaining solutions based on open source components the most common business model • Open source product businesses are uncommon • Again, open source is evenly used in smaller and larger firms
  • 12. 12 Conclusions • Open Source systems and applications seem to be main stream currently • 75% of firms have some open source activities • Up from approx. 13% in year 2000 • Businesses that are based on open source, although growing, are still minority • However, depends largely on how one defines open source business • Open Source firms are mainly project houses • Some fast growth and high profit firms
  • 13. Sponsors and partners of 13 National Software Industry Survey In addition to financing partners above, the following parties provided their expertise:
  • 14. 14 Thank you for your attention! Questions, comments, please!