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Myths and realities of open source for FP7 projects: why OSS is important for the economy, benefits, drawbacks. Presented at the IST Internet of Services collaboration meeting 2011, in the FLOSS working group session. Data derived from previous Transfersummit presentation:

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  1. 1. Open source: myths and realities Carlo Daffara European Working Group on Libre Software Conecta ResearchInternet of Services 2011 – FLOSS WG
  2. 2. Myth #1: open source is not widely used.Internet of Services 2011 – FLOSS WG
  3. 3. How much Open Source is inside the average codebase?Internet of Services 2011 – FLOSS WG
  4. 4. ● Black Duck analysis of large code projects (avg. 700MB of code): 22% is OSS, up to 80% of new development is avoided through OSS● On average, 30% of implemented functionalities is based on reused OSS code (Sojer M., Henkel J. “Code reuse in Open Source Software Development”)● “sampling continues to find that between 30% and 70% of code submitted is .. in the form of OSS components and commercial libraries” (Veracode, “State of Software Security Report volume 3”, 2011)Internet of Services 2011 – FLOSS WG
  5. 5. Internet of Services 2011 – FLOSS WG
  6. 6. 35% of code created in the last 5 years is Open SourceInternet of Services 2011 – FLOSS WG
  7. 7. What value does OSS reuse brings in?(Abts, Boehm, Bailey Clark “Empiricalobservations on COTS software integrationeffort based on the initial COCOTS calibrationdatabase”)Internet of Services 2011 – FLOSS WG
  8. 8. Total OSS source adoption value: 41B€Internet of Services 2011 – FLOSS WG
  9. 9. Myth #2: open source is not as good as proprietar y sw.Internet of Services 2011 – FLOSS WG
  10. 10. “Figures suppor t the idea that FOSSsolu tions are more innovative thanproprietar y ones: indeed, in all the threedimensions, experts’ evaluations are higher forFOSS than for proprietary software. … FOSSsoftware not only show different levels ofinnovativity, but, as far as, new to the worldproducts are concerned, they are also shapedby different innovation processes: radicalinnovation in the FOSS vs. incrementalinnovation in proprietary field.” (Rossi,Lorenzi, “Innovativeness of Free/Open Sourcesolutions”)Internet of Services 2011 – FLOSS WG
  11. 11. "The growing rate, or the number of functionsadded, was greater in the open source projectsthan in the closed source projects. Thisindicates that the OSS approach may be ableto provide more features over time than byusing the closed source approach. (Paulson,Succi, Eberlein “An Empirical Study of OpenSource and Closed Source SoftwareProducts”)Internet of Services 2011 – FLOSS WG
  12. 12. (Mohagheghi, Conradi, Killi and Schwarz “AnEmpirical Study of Software Reuse vs. Defect-Density and Stability”)Internet of Services 2011 – FLOSS WG
  13. 13. "Findings indicate that community Open Sourceapplications show a slower growth ofmaintenance effort over time.” (Capra,Francalanci, Merlo “The Economics ofCommunity Open Source Software Projects:An Empirical Analysis of MaintenanceEffort”)“The fourth law of software evolution,implying constant incremental effort, might beviolated (Koch “Evolution of Open SourceSoftware Systems – A Large-ScaleInvestigation”)Internet of Services 2011 – FLOSS WG
  14. 14. Deshpande, Riehle “The Total Growth of Open Source”Internet of Services 2011 – FLOSS WG
  15. 15. Source: Dirk Riehle, “The open source big bang”Internet of Services 2011 – FLOSS WG
  16. 16. Myth #3: external contribu tions are negligible.Internet of Services 2011 – FLOSS WG
  17. 17. “While IBM initially contributed software that wasvalued at 40M$, external contributors to the projectcreated software representing a value of roughly1.7B$ over the examined period.” (Spaeth,Stuermer, von Krogh “Enabling knowledge creationthrough outsiders: towards a push model of openinnovation”)Internet of Services 2011 – FLOSS WG
  18. 18. Internet of Services 2011 – FLOSS WG
  19. 19. Myth #4: code is the only wor thwile potential contribu tion.Internet of Services 2011 – FLOSS WG
  20. 20. “[non-code] outside contributions aresignicant. Open Cascade estimates that theyrepresent about 20 % of the value of thesoftware. Matra Datavision had to injectapproximately 2M€ per year to continue todevelop its tools. In 2000, the company limitedthe costs to 1.2 million.” (Jullien, Clement-Fontaine, Dalle “New Economic Models, NewSoftware Industry Economy”)Internet of Services 2011 – FLOSS WG
  21. 21. The economic value of Open Source Software
  22. 22. Myth #5: Open Source limits the exploitation possibilities.Internet of Services 2011 – FLOSS WG
  23. 23. “[..] the aim of free software is not to enable ahealthy business on software but rather tomake it even impossible to make anyincome on software as a commercialproduc t.” (Thomas Lutz, Microsoftrepresentative at Tunis WSIS)“Do open source where there arentcommercial alternatives ” (Tony Hey, MSVP Research, Microsoft atTransferSummit2011)Internet of Services 2011 – FLOSS WG
  24. 24. “Open-source software is deliberatelydeveloped outside of market mechanisms... thenonmarket coordination mechanism fails tocontribute to the creation of value indevelopment, as opposed to the commercialsoftware market. [It] does not generate profit,income, jobs or taxes … In the end, thedeveloped software cannot be used togenerate profit.” (Kooths S., Lagenfurth M.“Open Source-Software: An EconomicAssessment” University of Muenster, MuensterInstitute for Computational Economics)Internet of Services 2011 – FLOSS WG
  25. 25. “[Open Source] ... suppresses qualitycompetition between OS firms and restrictstheir output much as an agreement to suppresscompetition on quality would. .. We find thatthe first-best solution in our model is to taxOS firms and grant tax breaks to[proprietar y sw] firms .” (Engelhardt,Maurer, 2010 Goldman School of PublicPolicy)Internet of Services 2011 – FLOSS WG
  26. 26. Internet of Services 2011 – FLOSS WG
  27. 27. Total value of OSS reuse per year: 116B€Internet of Services 2011 – FLOSS WG
  28. 28. With proprietary software, 86% of SW spending goes outside of Europe-and reduces local company margins Ecosystem Revenues compared with MS revenues by partner type Product- Services- Retail Logistics Logistics-Oriented Oriented Oriented Value-Added Partner Partner (e.g., LargeMicrosoft Partner (e.g., Large Partner (e.g., Partner (e.g., (e.g., VAR) Retail Electronics Account Reseller) ISV, IHV) SI, Hoster) Store) $1 $4.09 $2.44 $2.30 $2.70 $2.93 1 24% 40.9% 43.5% 37% 34%Source: Partner Opportunity in the Microsoft Ecosystem, IDC 2011; analysis by Daffara Internet of Services 2011 – FLOSS WG
  29. 29. Revenue per employee rating (FLOSS firms vs. Industry average) Computer Equipment 182% Software consultancy and supply 427% Services (excl. software cons. and supply) 211% Manufacturing (excl. computer equip.) 136% Other 204% ALL: 221% Source: MERITInternet of Services 2011 – FLOSS WG
  30. 30. Internet of Services 2011 – FLOSS WG
  31. 31. OSS Vendor Business model Open Core Vendor example ZimbraNumber of covered products single or fewEconomic advantage for the Reduction of R&D, reduced maintenance costs, visibility, vendor increased dissemination, external ecosystem of add-ons, self-segmentation of the market for the proprietary add-onsEconomic advantage for the The adopter may opt for the open source edition if it is adopter deemed sufficient; for the proprietary part, reduction in cost may give better price/quality ratioPotential disadvantages of Difficult to estimate the right balance between open and the model closed parts, external groups may create substitutes for the proprietary parts Sale condition Need for the proprietary additions or need of support Freeriding protection license choice, segmentation on features External ecosystem potentially large, depending on the balance open/proprietary (more examples in the FP7 primer...) Internet of Services 2011 – FLOSS WG
  32. 32. Myth #6: I need to create my own license.Internet of Services 2011 – FLOSS WG
  33. 33. Rank License % 1 GNU General Public License (GPL) 2.0 47.6% 2 GNU Lesser General Public License (LGPL) 2.1 9.1% 3 Artistic License (Perl) 9.1% 4 BSD License 2.0 6.2% 5 GNU General Public License (GPL) 3.0 6.2% 6 MIT License 4.6% 7 Apache License 2.0 4.3% 8 Code Project Open 1.02 License 2.9% 9 Microsoft Public License (Ms-PL) 1.7% 10 Mozilla Public License (MPL) 1.1 1.2% 11 Common Public License (CPL) 0.5% 12 Eclipse Public License (EPL) 0.5% 13 GNU Lesser General Public License (LGPL) 3.0 0.5% 14 zlib/libpng License 0.4% 15 Academic Free License 0.4% 16 Common Development and Distribution License (CDDL) 0.3% 17 Open Software License (OSL) 0.3% 18 Mozilla Public License (MPL) 1.0 0.3% 19 PHP License Version 3.0 0.2% 20 Ruby License 0.2%Internet of Services 2011 – FLOSS WG
  34. 34. Myth #7: Open Source is a silver bullet.Internet of Services 2011 – FLOSS WG
  35. 35. Internet of Services 2011 – FLOSS WG
  36. 36. Internet of Services 2011 – FLOSS WG
  37. 37. Myth #8: It is easy to create a community.Internet of Services 2011 – FLOSS WG
  38. 38. From: “Sustainability of Free/Libre Open Source Projects: A Longitudinal Study” Journal of the Association for Information Systems November 2010Internet of Services 2011 – FLOSS WG
  39. 39. Internet of Services 2011 – FLOSS WG
  40. 40. “The software developed in the project isreleased under the GPL license; however, inorder to obtain the login and passwordnecessary to access the forge site, theinterested parties need to send a signeddocument that confirm that the software willbe used for research purpose only, that anypublic criticism is explicitly forbidden, and thatany use of the software itself as a basis of apublished article need to be first agreed withthe project coordinator.”Internet of Services 2011 – FLOSS WG
  41. 41. Thanks! Carlo Daffara cdaffara@conecta.it