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: http://www.slideshare.net/cdaffara/transfersummit2011

1. Open source:
myths and realities
Carlo Daffara
European Working Group on Libre Software
Conecta Research
Internet of Services 2011 – FLOSS WG

2. Myth #1: open source is not
widely used.
Internet of Services 2011 – FLOSS WG

3. How much Open Source is inside the average
codebase?
Internet of Services 2011 – FLOSS WG

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. Internet of Services 2011 – FLOSS WG

6. 35% of code created
in the last 5 years is Open Source
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7. What value does OSS reuse brings in?
(Abts, Boehm, Bailey Clark “Empirical
observations on COTS software integration
effort based on the initial COCOTS calibration
database”)
Internet of Services 2011 – FLOSS WG

8. Total OSS source adoption value: 41B€
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9. Myth #2: open source is not
as good as proprietar y sw.
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10. “Figures suppor t the idea that FOSS
solu tions are more innovative than
proprietar y ones: indeed, in all the three
dimensions, experts’ evaluations are higher for
FOSS than for proprietary software. … FOSS
software not only show different levels of
innovativity, but, as far as, new to the world
products are concerned, they are also shaped
by different innovation processes: radical
innovation in the FOSS vs. incremental
innovation in proprietary field.” (Rossi,
Lorenzi, “Innovativeness of Free/Open Source
solutions”)
Internet of Services 2011 – FLOSS WG

11. "The growing rate, or the number of functions
added, was greater in the open source projects
than in the closed source projects. This
indicates that the OSS approach may be able
to provide more features over time than by
using the closed source approach. (Paulson,
Succi, Eberlein “An Empirical Study of Open
Source and Closed Source Software
Products”)
Internet of Services 2011 – FLOSS WG

12. (Mohagheghi, Conradi, Killi and Schwarz “An
Empirical Study of Software Reuse vs. Defect-
Density and Stability”)
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13. "Findings indicate that community Open Source
applications show a slower growth of
maintenance effort over time.” (Capra,
Francalanci, Merlo “The Economics of
Community Open Source Software Projects:
An Empirical Analysis of Maintenance
Effort”)
“The fourth law of software evolution,
implying constant incremental effort, might be
violated (Koch “Evolution of Open Source
Software Systems – A Large-Scale
Investigation”)
Internet of Services 2011 – FLOSS WG

14. Deshpande, Riehle “The Total Growth of Open Source”
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15. Source: Dirk Riehle, “The open source big bang”
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16. Myth #3: external contribu tions are
negligible.
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17. “While IBM initially contributed software that was
valued at 40M$, external contributors to the project
created software representing a value of roughly
1.7B$ over the examined period.” (Spaeth,
Stuermer, von Krogh “Enabling knowledge creation
through outsiders: towards a push model of open
innovation”)
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18. Internet of Services 2011 – FLOSS WG

19. Myth #4: code is the only wor thwile
potential contribu tion.
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20. “[non-code] outside contributions are
signicant. Open Cascade estimates that they
represent about 20 % of the value of the
software. Matra Datavision had to inject
approximately 2M€ per year to continue to
develop its tools. In 2000, the company limited
the costs to 1.2 million.” (Jullien, Clement-
Fontaine, Dalle “New Economic Models, New
Software Industry Economy”)
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21. The economic value of Open Source Software

22. Myth #5: Open Source limits the
exploitation possibilities.
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23. “[..] the aim of free software is not to enable a
healthy business on software but rather to
make it even impossible to make any
income on software as a commercial
produc t.” (Thomas Lutz, Microsoft
representative at Tunis WSIS)
“Do open source where there aren't
commercial alternatives ” (Tony Hey, MS
VP Research, Microsoft at
TransferSummit2011)
Internet of Services 2011 – FLOSS WG

24. “Open-source software is deliberately
developed outside of market mechanisms... the
nonmarket coordination mechanism fails to
contribute to the creation of value in
development, as opposed to the commercial
software market. [It] does not generate profit,
income, jobs or taxes … In the end, the
developed software cannot be used to
generate profit.” (Kooths S., Lagenfurth M.
“Open Source-Software: An Economic
Assessment” University of Muenster, Muenster
Institute for Computational Economics)
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25. “[Open Source] ... suppresses quality
competition between OS firms and restricts
their output much as an agreement to suppress
competition on quality would. .. We find that
the first-best solution in our model is to tax
OS firms and grant tax breaks to
[proprietar y sw] firms .” (Engelhardt,
Maurer, 2010 Goldman School of Public
Policy)
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27. Total value of OSS reuse per year: 116B€
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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., Large
Microsoft 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
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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: MERIT
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30. Internet of Services 2011 – FLOSS WG

31. OSS Vendor Business model Open Core
Vendor example Zimbra
Number of covered products single or few
Economic 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-ons
Economic 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 ratio
Potential 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...)
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32. Myth #6: I need to create my own
license.
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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. Myth #7: Open Source is
a silver bullet.
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37. Myth #8: It is easy to create a
community.
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38. From: “Sustainability of Free/Libre Open Source Projects: A Longitudinal Study”
Journal of the Association for Information Systems November 2010
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39. Internet of Services 2011 – FLOSS WG

40. “The software developed in the project is
released under the GPL license; however, in
order to obtain the login and password
necessary to access the forge site, the
interested parties need to send a signed
document that confirm that the software will
be used for research purpose only, that any
public criticism is explicitly forbidden, and that
any use of the software itself as a basis of a
published article need to be first agreed with
the project coordinator.”
Internet of Services 2011 – FLOSS WG

41. Thanks!
Carlo Daffara
cdaffara@conecta.it
http://carlodaffara.conecta.it