Open Source in the Enterprise and Open Source Business Models

FountainBlue’s March 8 VIP roundtable was on the topic of ‘Open Source in the Enterprise and Open Source Business Models’. Thank you also to our gracious hosts at Comcast and each of you for your input and advice. Below are notes from the conversation. 

The Open Source story is unfolding in front of us. The 80s brought us companies like HP, SUN and Silicon Graphics innovating on the Linux Operating System kernel as the first wave of commercialization. 

The 90s brought us companies such as Google and Netscape and Amazon who built sophisticated solutions on top of open source foundations to generate revenues and deliver services. 

Building on that wave of innovation, today, companies continue to leverage open source, but not just to design offerings, but also to fuel innovation. Examples include how media companies such as Comcast and Netflix are designing customized infotainment options and financial services companies such as Capital One are designed customized financial management services.

Our executives in attendance were clear that Open Source is here to stay, so the larger community needs to accept and embrace this fact, and understand how to adopt short-term and long-term strategies to integrate Open Source into business models and product and service offerings. Some of the challenges for making this happen include:

• Definitions and terminologies around ‘Open Source’ cause confusion, especially for business leaders who misinterpret the meaning of ‘free’ and avoid open source altogether.
• Legal and policy challenges around the use of open source code make it challenging for some companies to adopt it.
• The requirement to ‘contribute and give back’ sometimes causes conflicts between developers who want to contribute work and code back to the network and the management who don’t want to developers to dedicate time and resource to do so because of their concerns for timelines and for IP/business reasons.

But again, accept these challenges we must, for Open Source is here to stay, and more people need to contribute to it to make it easier for more people and companies to benefit from it.

The passionate open source developers and community truly understand this dynamic. The trick is to get business people to understand it and embrace open source software while also achieving business objectives. Below is advice from the executives in attendance on how this can be accomplished.

• Align the ‘why’ for adopting the open source strategy with the what and the how. 
• Embrace the ‘consume, collaborate and create’ mind-set around open source. Don’t be tagged as someone who just consumes what’s there. Collaborate and connect with others, and create for the Greater Good.
• Deliver the value-added software and services beyond the open source foundation of code. 
• Connect with people within and outside your company and create a community of collaborators around open source. 
• Proactively control the message your company has around open source. Make it a proactively positive and consistent message that would positively impact your brand. This means active ongoing participation with that community of Open Source activists.

Below is advice for how to grow a company beyond the non-revenue open source model to a revenue-generating company based on open source technology:

• Package a value-add of software and services around the core technology.
• Offer a free and a paid version with a clear value-add for the paid version.
• Offer and monetize add-ons.
• Ensure that everything is repeatable and scalable.
• Go for the tall head rather than the long tail!
• Leverage partnerships and channels where appropriate.

Consider some opportunities which leverage open source:

• Infotainment 
• Open Data
• Telematics
• Sensors
• Open Cities
• Advanced Manufacturing
• Block Chain and Open Source

One last time – Open Source is Here to Stay! Find others who get that and know how to work with that. 

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