[heavy content] This guide explains how to make proper use of different software forms. Particularly, the guide stresses that open source software is an essential part of software development ecosystem. It outlines its evolutionary role and challenges that are faced by the software industry. The guide should help IT managers to build sound software strategies. It also signals where are growth points for a forward looking and proactive participation in the technology community.
19. uniqueness grants competitive potential
Vendors see business model #1
contracting
• Project Ware
• Program Ware
(Need something done?
Specify. We will code it,
delivery and service
included)
20. The most lucrative model
contracting
secure, up-front
customer
unique, expensive,
efficient quality
isn’t
granted
no-risk, no scaling,
get paid a lot of
vendor
before you hand-
deliver, holding
limited QA
22. Companies use business model #2
software vendor
We have already coded and shipped
a software that does many things.
Adjust your needs. We will help.
• Product Ware, Share Ware
(buy the box or license)
• Cloud Ware
(buy the functionality set)
• SaaS Ware
(rent the license)
• Open Source Ware
(buy the license, fix and service
the code yourself)
23. lucrative and robust model
software vendor
universal, up-front
customer
cheap, costs,
immediately quality
available isn’t
detailed
scaling, up-front
no depen- investment,
vendor
dency on a many eye-
single cus- balls track
tomer quality
25. Vendors think business model #3
free, free open source
We have a software that can do
some things. It is delivered to
your door and free to try
• Free Ware
(use it or leave it)
• Share Ware
(take it, pay for updates and
support)
• Free & Open Source Ware
(take it, adjust it or pay us to
do so)
26. easy to enter model
free & open source
no up-front limited or
customer
investment, expensive
quality is features,
granted or hassle
no payment
scaling, huge up-
simple front
vendor
shipping, investment,
cheapest return is
foot in the not granted
door
57. #2
The trouble there:
it is hard to find right train
One ticket to There is no such
Choo-Choo City! destination
58. #2
You know it after you bought
software. Media reviews don’t
consider your specific needs
I’m sorry, we’ve
sold you a ticket
to Cha-Cha
One ticket to
Choo-Choo City!
71. Project Ware
Program Ware
Cloud Ware
Product Ware
SaaS Ware
Share Ware
Support Ware
Open Source Ware
Free Ware
Ad Ware
Beg, Mascot Ware
Sponsor Ware
74. …following business sense
for a consumable value that The idea is
picked up.
the product contains Mass product
A text editor is created
1 2
as custom built code
4
The editor’s functionality 3
is integrated in other
products as a component
Cheaper and adjustable
replicas of the editor
75. From an innovative code
to a standard component.
New loops continue
the life cycle
pervasion
inception
Text editor’s life cycle
as a product component
Text editor’s life cycle as a
stand-alone product
76. So..
do I really
choose?
http://www.flickr.com/photos/mrtruffle/140233326
86. Two organizational forms
as a Fn of product complexity
Market exchange
is more efficient
Coase’s firm theory
In-house
production is
better than
procuring the
product
87. Two ownership forms
as a Fn of asset building costs
Property is more Implementation
valuable than costs are higher
implementation than the value of
costs property that
controls an
opportunity
Demsetz’s property theory
88. Organizational forms
as a function of relative costs
Value > Costs >
property costs property value
exchange
Cheaper
goods Markets Commons
in-house
to build
Cheaper
Property
Firms regimes
Coase’s firm theory +
Demsetz’s property theory
89. Organizational forms
as a Fn of software eco-cycle
Value > Costs >
property Costs property value
exchange
Goods Markets Commons
in-house
Property
Build
Firms regimes
90. Efficient production forms
as a Fn of product attributes
Abundance Commodity
of market product
players, that serves
universal significant
product need
Hygienic
Complex, product in
unique an inapt
product in providers’
monopoly market
94. Saturation products
common base standards
pop share
entities
coverage
demands
This phase delivers
flavors to any taste.
That makes the core
functionality a common
good and knowledge
costs/profit
95. You can use
any product form
from the previous complexity cycle
pervasion
inception
components cycle
102. 1
seeking an infrastructure leap
in the “final touch” phase
typical product is
an integrated system complexity
system components
are open sourced
103. 1
requirements
A. ambitious to wait until a system becomes ubiquitous
B. creative to dare the proliferation semi-cycle
C. resourceful to support the components development
104. Others
9% Asia & Oceania
7%
41%
United Europe
38%
North America
Debian developers
reside in rich countries
http://widi.berlios.de/paper/study.html
105. 1
constrains
A. resources
B.incentive to close the source
after the tipping point
BOTTOM LINE: projects are rarely
started, and eventually shut off
113. FOSS does to software what
universities did to knowledge
mass
production
commercialization
1 2
4
ideation
by individuals
knowledge propagation and
settle down to standards
114. today huge
”fired” IT-force seeds the FOSS
US information services employees
This is a life time
opportunity that is
not sustainable
unless systemic Bureau of Labor Statistics
changes occur
115. software proliferation is
a fragile business process
entities
Customization driven
development
Startup driven
development costs/profit
116. an overarching system
is required
a raw model for free software
on a sustainability rail
117. Contributors
Konstantyn Spasokukotskiy
Mykola Dimura
References
Dana Blankenhorn - ZD Net publication on software business models
Yochai Benkler http://www.yale.edu/yalelj/112/BenklerWEB.pdf
http://widi.berlios.de/paper/study.html
http://modeledbehavior.files.wordpress.com/2010/07/image5.png
free to copy and reuse
with proper attribution