At the Edge of Open Source Communities and Companies

Matt Aslett has made his stance on a discussion that started on Twitter about Open Source vendors giving away control to their community with the goal of better monetization. I concur with Savio Rodriguez’s doubts, but I believe that it is an issue worth while to be discussed, because it basically questions of the open core business model favored by investors.

As you might expect, let me take a look at it from the marketing perspective.

What I see in markets where plenty of open source offerings exist with a multitude of business models (e.g. in the CMS space), is that there is growing pressure on vendor-driven models to adopt more of the benefits of the community-driven model and vice versa.

There are various business tools that allow OSS vendors and their investors to test how much they will actually benefit from gradually moving control to the community. Switching to a more permissive license might be the last step.

For example, OSS vendors can increasingly include community members in discussing and executing the marketing strategy. Furthermore, a vendor could initialize a community board where the vendor discusses release cycles and development issues with community members. Both efforts could later lead towards a community-owned association that holds the trademark and decides upon the development roadmap.

On the other hand, community-driven OSS projects sometimes envy OSS vendors, especially when it comes to the ability of rolling out a focused marketing. I’ve heard from a hand full of board members of OSS associations that they’d love to a) actually have a marketing budget and b) have control over that budget without the need for lengthy discussions to reach consensus among the community. Things might perhaps be moving towards some light vendor-style structures here, given that OSS projects need to increasingly compete with OSS vendors. In the end, it’s all about OSS projects becoming more professional.

5 thoughts on “At the Edge of Open Source Communities and Companies

  1. Hi Sandro,

    can you give an example of an OSS vendor that succeeded in growing a community and handing over control when he started from vendor-controlled OSS?

    (I can only think of Netscape – and that probably worked only because the company vaporized.)

    Michael

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    1. Hi Michael,

      that is a good question and yet I could not come up with a good example. Concerning Netscape, one could argue that it was not so much an OSS vendor handing over control to a related OSS community, but rather a formerly proprietary software vendor adopting an OSS business model. This supports Matt Aslett’s point of view that both scenarios are similar.

      I tend to think that for an OSS vendor, there are the following reasons to hand over control (gradually) to the community:

      Worst-case scenario: The business suffers or did not succeed. Handing over the code, trademark, etc. to the community is the last resort to grow a critical mass of adopters or to avoid unhappy customers who are stuck with a broke vendor, etc. This scenario would most likely lead to a radical change instead of gradually moving over control.
      Grow market share: A successful OSS vendor hands over control to the community to raise adoption, generate more leads, etc. Of course, as Matt Aslett pointed out, the vendor would only do so if he provided added value (e.g. proprietary extensions) he could monetize upon.
      Minimize sales and marketing cost: This point is closely connected to growing a market share and I have pointed it out in my blog post.

      In general, I yet regard this whole discussion as an academic one that is helpful to define a potential business scenario for OSS vendors, because I cannot think of a real-life example. What gets the closest to it is an OSS vendor who hands over copyright, trademark, etc. to a consortium such as the Eclipse Foundation. Then again, it’s a consortium- and not a vendor- nor a purely community-driven model.

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  2. Hi Sandro,

    thanks for the answer.

    I tend to see this discussion be more than just an academic exercise. Rather, I think that it might denote an important shift in the way open source is perceived in the broader public. Up to now OSS is mainly perceived as, well, software where the source is “obtainable”. That is certainly a positive thing for many purposes and that can be easily be achieved by a vendor-driven approach.

    However, I believe that when there is no community around the sources users of the software are sold to the vendors in much the same way as they are sold to commercial vendors.

    Cheers
    Michael

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    1. Hi Michael,

      I do agree that there seems to be a shift in how users, especially enterprises and CIOs look at Open Source.

      It might even go hand in hand with how OSS vendors and investors look at OSS communities. I believe that VC-funded companies such as Acquia have triggered this shift, because when they announced the first round, I heard people wonder why they were actually able to get funding, especially because Acquia does not own the Drupal code base nor the Drupal trademark. The answer was simply the massive amount of Drupal community members and users that constitute a profitable market.

      I also agree with you that an Open Source community is so to say the best guarantee for OSS users that they can avoid vendor lock-in as much as possible, but there is nothing like “no community”. It’s rather about how active the community is and how much the vendor respects it. A nascent OSS product with a nascent OSS community can still ensure independence for commercial users buying services or add-ons from the vendor to the extend expected by clients.

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