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An Economics research structure : Economics of Free and Open Source in Thailand

An Economics research structure : Economics of Free and Open Source in Thailand

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  • 1. Economics of Free and Open Source in Thailand เศรษฐศาสตร์ซอฟต์แวร์เสรีและโอเพนซอร์สในประเทศไทย โดย กานต์ ยืนยง โครงการเศรษฐศาสตร์ธุรกิจ มหาวิทยาลัยธรรมศาสตร์
  • 2. Contents
    • Study’s structure
    • Chapter 1 : Introduction
    • Chapter 2 : History & Development and Literature review
  • 3. Study’s structure
  • 4. Chapter 1 : Introduction
    • An important of the study
    • Objectives
    • Scope
    • Source of information
    • Methodology
    • Benefits
  • 5. Source: รายงานการพัฒนาขีดความสามารถในการแข่งขันของไทย NESDB ( กลุ่มอุตสาหกรรมซอฟต์แวร์ )
  • 6. Source: รายงานการพัฒนาขีดความสามารถในการแข่งขันของไทย NESDB ( กลุ่มอุตสาหกรรมซอฟต์แวร์ )
  • 7. Source: รายงานการพัฒนาขีดความสามารถในการแข่งขันของไทย NESDB ( กลุ่มอุตสาหกรรมซอฟต์แวร์ )
  • 8. Rising of FOSS worldwide Source: NetCraft http://news.netcraft.com/archives/web_server_survey.html
  • 9. Rising of FOSS worldwide
  • 10. Objectives of the study
    • To apply economic theory in order to explain :
        • Why FOSS work and exists
        • How can FIRM involve in FOSS
    • To study and compare a development of FOSS between Thailand and Foreign
    • To study a direction to develop FOSS industry in Thailand, both Gov’s policy and Firm’s strategy
  • 11. Scope
    • A development of FOSS, with influences people both in government agency, firm and private, during 1999 – present.
  • 12. Source of information
    • Secondary data via publish materials ie. Journal, magazine, newspaper, etc.
    • A survey and interview.
  • 13. Methodology
    • Quantitative approach
    • Qualitative approach
    • Descriptive approach
        • A comparison between fact from survey and theorem prediction.
  • 14. Benefits
    • Government : Get a basic idea and knowledge in conducting a policy.
    • Firm : Get a basic idea and knowledge in order to set its strategy.
    • Researcher : Get a basic literature, in order to improve a better knowledge.
  • 15. Chapter 2 : History & Development and Literature review
    • Meaning of FOSS
    • History and development
    • Definition
    • Economics theory to explain FOSS
    • Literature review
  • 16. Meaning of FOSS
    • Free software with available source code.
    • Community is significant.
    • Success or failure of the software depend on community activeness.
  • 17. History & Development
    • Birth of Unix era
    • BSD era
    • Linus Torvalds and Linux
    • Open Source era
    • Community role
    • Software in different form
    • Community’s character
  • 18. Community’s character Source : Open Source : Beyond the Fairy tales โดย Richard P. Gabriel และ Ron Goldman
  • 19. Community’s character
    • Available of source code
    • Distribution of owner and control
    • Scarcity of money, B/W and computer power but not man power
    • Limited lock-in
    • Software is not perfect;Tolerable
    • Open KPI
    • Professional attention
    • Elegance code
    • Ignorance of unskilled users
  • 20. Definition of FOSS
    • Open Source Initiative : Focus on collaboration and openness
    • Free Software Foundation : Focus on Freedom
  • 21. Economics Theory
    • Near zero marginal cost
    • Network externalities
    • Critical mass
    • Public goods & Free-riding
  • 22. Near zero marginal cost Source : Microeconomics : Paul Krugman และ Robin Wills ,2004
  • 23. Network externalities
    • More users create more benefits. Consider Fax, Telephone and Mobile.
    • On software :
        • Pool of experienced users and developer
        • More application available
  • 24. Critical mass Source : Microeconomics : Paul Krugman และ Robin Wills ,2004
  • 25. Public goods & Free-riding Source: R.van Wendel de Joode et al. 2003
  • 26. Literature review
    • Explain why hacker produce public goods. R. van Wendel de Joode et al. (2003)
    • Empirical study. Gosh, Rishab Aiyer et al. (2002)
    • Balance between community and firm. R. van Wendel de Joode et al. (2003)
    • Limitation in developing country. Weerawarana, Sanjiva and Weeratunga, Jivaka (2004)
    • Core Literature. Bessen, James (2004)
  • 27. Why hacker produce public goods
    • Low contribution cost; internet infrastructure.
    • Intangible benefits:
        • Direct needs
        • Fun
        • Reputation
  • 28. Empirical study Source : Free/Libre and Open Source Software : A developer survey โดย Rishab Aiyer Gosh et al. (2002)
  • 29. Balancing : Firm force
    • Patents
    • Hire core developer
    • Free-riding
    • Commercialization
  • 30. Balancing : Community force
    • Law approach : GPL, no prove in court yet.
    • Non law approach :
        • Beachheads
        • Boycott
        • Competition development
        • Power play
        • Release early, release frequently
  • 31. Limitation on developing country
    • Problem in IP enforcement
    • Lack of low cost and efficient internet infrastructure
    • Low education infrastructure
    • Freedom to access information
    • Lack of English language understanding
    • Lack of high skill developer pool
  • 32. Core Literature : Firm involvement
    • Open Source Software: Free Provision of Complex Public Goods. Bessen, James (2004).
    • Based on model of innovations : Agion & Tiroles (1994)
    • Which based on :
        • Foundation of incomplete contracts ; Hart & Moore (1999)
        • Complexity and renegotiation : A foundation for incomplete contracts ; Segal (1999)
        • A recent development as theory of incomplete contracts , pioneer by Oliver Hart
        • Branch of contract theory and information economics
  • 33. Assumption about software
    • Software is a complex goods.
        • m features product, use or not use generate 2 m different use-product.
        • Testing, Debugging and maintenance account for 82% of the cost of software.
        • Complexity-related cost also limit the ability of packaged software to meet all consumer needs. Some turn to custom programming or self develop.
    • Contract issue:
        • To write a contract to cover all features equal write the code itself.
        • Incomplete contract : certain “transaction costs” prevent some aspects of the future trade from being contracted ex ante (renegotiation in ex post).
  • 34. Self development vs. 1 on 1 contract Customer Developer invest Sell code Customer Self development
  • 35. Pre-package software Developer Sell package Choice 1 : Customer get prepackage Profit of software firm Choice 2 : Customer self develop Firm optimum price Customer Customer Customer Customer Customer
  • 36. Proprietary extension : API Developer Customer Customer Customer API develop Sell Pre package Pre package Pre package
  • 37. Free/Open Source Customer Get source m* feature Develop m*+1 feature and contribute back Pool of FOSS developer and source
  • 38. Conclusion
    • FOSS is a Prepackage’s complement, not a direct competition.
    • FOSS is suitable for skilled customer , which is niche market.
    • Prepackage will focus to unskilled customer, which is mass market.
    • Prepackage should decrease price; API won’t exist.
    • FOSS increase social welfare.