1. Digital Sustainability
in the Knowledge Society
Free/Open Source Software (FOSS) and Business
Dr. Marcus M. Dapp
Board OKF Germany / IT Strategist, City Government Munich
31.10.2011

2. Historical »Halloween Documents«
Series of confidential
Microsoft memoranda
leaked in 1998/1999 on
potential strategies
relating to free software,
open­source software,
and to Linux in particular
­­ and a series of
responses to these
memoranda written by
Eric Raymond.
Marked "Microsoft confidential", they identify FOSS, in particular Linux, as a major threat
to Microsoft's dominance of the software industry, and suggest ways in which Microsoft
could disrupt the progress of open source software. (Source: Wikipedia)

3. Software business is
changing …
FTD vom 29.10.2008

4. Founding IT startups...

5. Task: Start up the »Open™ Corporation« !
• Somehow...
• Base business model on FOSS
• Try to earn money with it
• Key business plan questions
• Which customer needs do you address?
• What is your offering? (product/service)
• Who are your customers?
• What is the added value they get yor their
money?
3­5­1
interaction

6. Four generic FOSS business models
• Distribution
• Operating system
• Applications
• Service Provider Many different models...
• Full service
• Specialized service
• Events
• Hardware
• Retail
Adapted from Berlecon – FLOSS Survey, part 3 (2002)

7. A) Distribution : Operating system
Examples for GNU/Linux: RedHat, Canonical, Novell
Value proposition:
Packaging + X
Critical Success Factors/Core competencies:
Brand building, distribution, marketing
Types of Offerings:
• Range from standard to individual solutions
<product> <service>
Distribution – Merchandising – Support – Training – Integration ­ Consulting

8. A) Distribution : Applications / Tools
Ex.: mySQL, Star/OpenOffice.org, FireFox, SourceForge
Value proposition:
Scheduling, professional delivery, support
Critical Success Factors/Core competencies:
Software expertise, Community relationship,
Hire core developers, (Dual­)Licensing »symbiosis« !?
Types of Offerings:
• Open up older versions
• Consulting, support
• Dual­licensing (closed and open)
• Proprietary additions (»open core«)

9. B) Service Providers : Full service
Examples: Distributors, Optaros
Value proposition: Technology
product/technology expertise dependence
Critical Success Factors/Core competencies:
leverage technical / integration knowledge
for service offering
Types of Offerings:
• »Everything« around product/technology
• Product support in broadest sense

10. B) Service Providers : Specialized service
Examples: Accenture, IBM, FOSS Group
Value proposition:
business process expertise, IT­consulting
Critical Success Factors/Core competencies:
leverage knowledge for FOSS offering
Types of Offerings:
• Support contracts (e.g. guaranteed reaction) Demand level?
• Training (direct, e­learning)
• General IT consulting or focus on FOSS

11. B) Service Providers : Events
Examples: openexpo.ch, LinuxTag, OSCON
Value proposition:
Present »hot topics & trends«, knowledge
Critical Success Factors/Core competencies:
Pick topics, event management
Types of Offerings:
• Platform for community Who pays?
• Information for customers
• PR/Marketing channel for Service Providers

12. C) Hardware
Examples: OLPC, openmoko, some Android phones, »Freedom Box«
Value proposition:
»free/open hardware«
Critical Success Factors/Core competencies:
community relationship, HW/SW combo
Types of Offerings:
• Hardware
• Software sharing platform
• Support

13. D) Retail
Examples: O’Reilly, CNET, heise, (publisher, bookshops)
Value proposition:
Specialized sales channel for products
Critical Success Factors/Core competencies:
(Mass) market access, retail chain brand
Types of Offerings:
• Software packages
• Books, Tutorials, Videos, etc.
• Merchandise articles

14. FOSS­based business models
• Absence of royalty fees still
leaves options to earn money
• Many experiments are ongoing...
Check out our groups this year!
#1 Offenes Cloud Computing
#6 Freedom Box
#7 diaspora – Freie Alternative zu Facebook?
#15 Geld verdienen mit FOSS

15. Nach der Pause
Unser Gast, Georg Greve, stellt ein
reales FOSS Business vor:
KoLab Systems AG