Once More unto the Breach

Free and Open Source Software Developers Working for Free (Economics 101)

One still occasionally hears people wonder why free and open source software developers "work for free." We aren't talking about developers that work at a company or university. We're talking about all the others that aren't being paid a salary to develop this software. This came up again at the end of the week when Matt Asay commented on the latest Linux contribution numbers published by Jonathon Corbett.

Lot's of non-developers will be scratching their head at the 15% unaffiliated contributions. But here's the clue. No one is working for free in an economic sense. There were a couple of great quotes from economist Michael Boskin in an interview last week about virtual world economies (Gaia Online) that equally apply in the free and open source developer world [emphasis added]:

Q. What do you say to people who don't really understand this whole idea of a virtual economy? How do you explain it to them when someone asks, "You're going to be doing what?"

Boskin: Well, there is a very real phenomenon going on here. It happens to be in the virtual world, but it's a real phenomenon. Millions of people are spending their valuable time and using their skill to inhabit these places.

Q. Can you talk about the similarities between the Gaia economy and that of the United States?

Boskin: I think the fundamental similarity is that you have people making decisions on how to allocate their time and use their skills.

People value their skill sets differently in different contexts, but value them they do. I use writers as an example to explain this to non-developers: a technical or marcomm writer may spend 8 hours a day at their paid job, then spend their evenings and weekends teaching ESL classes at the local college, working on a newsletter for their local church/synagogue/neighbourhood organization, helping a child with a school project, and writing a sonnet to their significant other (or the next great novel or screenplay). In every case they're using their writing skills; they're just valuing them differently in different contexts.

There's another way to look at it. Not every market involves exchanging money for goods and services. A gem of an economics book ("Reinventing the Bazaar" by John McMillan, 2002, p. 135) points out that well designed markets, regardless of market type, have a number of things in common:

• Information flows smoothly.
• People can be trusted to live up to their promises.
• Competition is fostered.
• Property rights are protected, but not overprotected.
• Damaging side effects on third parties are curtailed.

Let's look at well run free and open source project communities in terms of such market dynamics.

• Information flows smoothly. [Transparency of community, process, code, policy, bugs, discussions.]
• People can be trusted to live up to their promises. [The project's license is a social contract. It's governance culture is well understood and supported.]
• Competition is fostered. [What fixes and features are accepted, and which ones don't make it.]
• Property rights are protected, but not overprotected. [Code copyright management and licensing is handled properly in well run projects.]
• Damaging side effects on third parties are curtailed. [The point here from the book is that WHEN real damage might be done to third parties, there are ways governments can involve themselves in the market to curtail such effects, whether by defining/enforcing property rights, taxes/incentives, or policy/regulation. The community's license comes to mind.]

Individual projects behave as markets from one perspective, and code is currency, the medium of exchange. Just like all economic exchanges, the contributor offers something they value less (a fragment of code solving a particular need) for something they value more (the functioning software package in its entirety). Nobody is working for free in an economic sense.

For those that want to dig deep on who develops free and open source software and why, I would encourage spending some time with the work led by Rishab Aiyer Ghosh published through the International Institute of Infonomics.

Microsoft Free and Open Source Messaging Problems

Here's a Microsoft quote on Mozilla:

The efforts between Mozilla and Microsoft are a prime example of the cooperation that is necessary to ensure interoperability in today’s software ecosystem. While Microsoft competes with open-source products, it also recognizes that sometimes it must build bridges with its competitors, whether proprietary or open source, to assure the best outcome for its customers.

It's from a document on Microsoft's new Open Source website.

Here's another Microsoft quote on Mozilla:

The open-source development model has yet to demonstrate the ability to support profitable software businesses that can drive the coordinated research and testing necessary to sustain innovation. Many in the open-source software community have shifted to hybrid business models. They are making the same business decisions as any commercial software company in terms of what products and services to give away, what intellectual property to protect, how to generate revenue, and how to participate in the community.

This quote was captured by Stephen Shankland in an interview with Microsoft PR director Clint Patterson about the new work Mozilla is doing with Thunderbird, and whether Microsoft would help the Thunderbird devs get their MUA working with Exchange. Aside from the naïveté it demonstrates about Clint's understanding of open source software, communities, and software businesses, it creates a problem for all of us outside of Microsoft (and just a few inside). You see, we don't get to pick just one statement as the truth.

The larger problem is of course that culture comes from the top of any organization. The last quote we got from Steve Ballmer on the subject of open source software was of course back in July in the Financial Analyst Meeting:

Open source: open source has been the issue that surrounds us. Could a commercial model like Microsoft compete with open source? And we've worked very hard on making the value of a commercial company surpass what the open source community can deliver, because frankly, it's not a business model we can embrace. It's inconsistent with shareholder value. And we've done a very good job, as you'll hear; for the first time in a few years we took some share back from Linux on the server the last quarter. And I think we've really got the formula sorted through.

Not a model Microsoft can embrace. Inconsistent with shareholder value. This is probably the most polite he's been with respect to free and open source software even if he gets it wrong.

An interview with Ray Ozzie in April at MIX quickly dances away from discussions of open source to continue to beat the drum of services, the Web, and Windows. This wasn't long after Brad Smith continued to push the patent infringement message around Linux. Craig Mundie doesn't appear to have had a public opinion on free and open source software since the early Microsoft gaffs from 2000 through 2003.

So while the company leadership is no longer making rabid statements about free and open source software, neither do they have any commentary beyond IP infringement and bad for shareholder value. What else could Mr. Patterson say?

I think from this point forward, we need to help the Microsoft Open Source Software Lab. I would encourage every journalist that gets interview time with any of the Microsoft executive team to work in a few relevant questions about free and open source software communities and businesses. This will allow the proper tone to be set for all of us, and hopefully drive just a few of those execs back to the new Microsoft Open Source site to brush up on their messaging. And then maybe next year, Bill Hilf can be given a few minutes during the company meeting held every September to talk about that maturing positioning. Stranger things have happened.

SCO Group Finale!

Stephen Shankland says it all. 

Copyright ©  Despair, Inc.

Update (24-Sep-2007, 19:35):  A friend pointed this comic out.  I got into this battle while I worked at Microsoft and SCO Group first sued customers.  I pointed out it was a suicidal thing to do if they were a "real" company, and not the anti-VC (i.e. a company that acquires old technology and litigates money out of the marketplace.)  Vendors will occasionally sue customers in 1:1 situations e.g. a license dispute, in a similar way that customers occasionally sue vendors in one off disputes for non-performance, but a vendor NEVER sues customers over general things like IP infringement.  It sets a tone for all customers that is ... suicide.  Your top sales people will simply leave.  They know customers are now viewing business with the vendor as possibly tainted by lawsuits.

I also pointed out that IBM wasn't going to let anything bad happen.  A company investing a BILLION dollars in Linux could afford to weather even a few tens of millions of dollars of legal debate over several years while they determined how bad it may or may not really be.  Frustrating and distracting?  Certainly.  So what?  The customer is king. 

(Mis-)Reporting Microsoft and the EU

PR is a wonderful thing.  The PR surrounding the EU decision on Microsoft begins with Microsoft gracefully accepting the court's ruling in a press release.

Well said!  Indeed, masterfully said.  Humble.  Conciliatory.  Quick to point out how the industry has changed.  Quick to point out the expanded investment in Europe.  Now let's look at the positioning.

The PR machine actually started the day before the announcement in the Financial Times ("Microsoft says rivals may rue siding with EU") with:

"Obviously, law that is made for Microsoft is going to apply to other market leaders as well. IBM, Google, Apple and others would have to look very carefully at the implications for their business models," — Brad Smith, Microsoft General Counsel

The New York Times started the week with "European Court Rejects Microsoft Antitrust Appeal".  The best quote:

“What this ruling will do is send a message to companies that if they establish a good market position with a successful product, they will be forced in Europe to essentially give up that product to their competitors.”  — Robert Kramer, a vice president of public policy for CompTIA, [a Microsoft ally]

The venerable Wall Street Journal further raises the spectre of anti-American sentiment under the banner "Microsoft Loss In Europe Raises American Fears", and picks up on the innovation thread with:

Microsoft's backers said the ruling will stifle innovation by making it tougher to design products with new features.

What utter PR-induced rubbish.  What is at question is NOT whether Microsoft is simply in a market leading position, or how they were shipping innovative features, but rather whether they abused a market dominant position with anti-competitive practices.  Here's how the EU actually describes a market dominant position in Article 82:

A dominant position is a situation of economic power held by a firm which allows it to hinder effective competition in the relevant market. It puts the firm in a position to exert considerable influence on the conditions in which competition is to develop, and to act without having to take that into account. ["Relevant Market" is defined here.]

One of the things that Article 82 goes on to discuss is "making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which have no connection with the subject matter of such contracts."  This would be something that U.S. Department of Justice followers might remember from the discussion around Microsoft OEM deals and bundling.  So the EU and the DoJ may not be as far apart as Thomas Barnett (U.S. DoJ) is quoted in the WSJ article.

Andy Updegrove's analysis is probably closer to reality.  Microsoft got off lightly here.  Just as US$100M in inbound litigation a year is the cost of doing business as a US$50B company, so to is this judgement.

While today's judgment is significant, it is worth noting that the penalties that Microsoft has incurred to date – roughly $1 billion, plus an obligation to reimburse a far smaller amount of legal fees – are minute in comparison to the magnitude of the profits it has garnered over the ten-year investigative period. During that time, its market share in both of the subject markets has grown dramatically. As a result, while Microsoft has nominally lost in court, it continues to win at the bottom line, given that the only impact on its products to date has been  more symbolic than effectual - the requirement to offer a version of Windows that does not bundle a free copy of its media player.

Stated another way, a billion dollars spread over ten years is $100 million a year.  During the same period, Microsoft revenues have grown enormously, to over $50 billion a year, fueled primarily by the continuing growth of its operating system and Office products.  It has been a tiny cost of business to pay, and a shrewd and cynical business decision to incur, a liability to pay one fifth of one percent of annual gross revenues to retain the freedom to dominate so lucrative a market in spite of the 2004 judgment.

It sort of puts all Mr. Smith's encouraging and friendly quotes about the growth of the Microsoft business over the past ten years in Europe into perspective.

GOSCON 2007: The Government Open Source Conference

It's almost time for the 2007 Government Open Source Conference (GOSCON). This is the third year for this important event. It runs 15-16 October, 2007 in Portland, OR. It's growing year on year and they expect 500+ people this year. I attended the first year, and was invited to speak last year.

The thing I've found most interesting about this conference over its first two years is the level of information exchange between attendees. It is still small enough that it feels almost intimate. There's no trade area so you aren't swamped with marketing and PR flaks pushing product agendas. There are great participative presentations between government employees that have done real things with free and open source software to departmental advantage and their audience colleagues there to learn. The calibre of speakers is very high. I first met both Linda Hamel (General Counsel for State of Mass., ITSD) and Beth Noveck (Peer-to-Patent program) here. Luncheon and hallway conversations are very engaged. Sponsorship does not convey a speaking slot to pimp products and services, and the few vendor speakers that do present have been smart enough to inform the attendees and not anger them with product pitches. I really can't say enough good things about this event.

Deb Bryant has done an exceptional job growing and maintaining the quality of this conference. It is an excellent event if you have anything to do with free and open source software from a government perspective.

Copyright © OpenGovPhotos

IBM Joins OpenOffice.org (The Quick Analysis)

It's official — IBM has joined the OpenOffice.org project. [There's good reporting and analysis from Andy Updegrove and Redmonk's Stephen O'Grady.  Update (12 Sep): Here's Andy's interview with IBM's Doug Heintzman, Director of Strategy for the Lotus division.] 

Here's the back of the envelop analysis.

From the OpenOffice.org community perspective, I'm guessing Louis Suarez-Potts (OO.o Community Manager) is feeling good to get a new injection of code/energy.  This is great for the community.  The OpenOffice suite keeps getting better and better, but new blood with new code could provide a much needed boost.

Overall Sun Microsystems is probably [very] happy IBM is supporting OpenOffice.org directly.  This is a much better situation than IBM building some form of ODF development platform inside Eclipse.org to enable ODF over OOXML, with OpenOffice.org hit as collateral damage.  [This would be sort of ironic since Eclipse helped to pull the Java centre-of-gravity away from Sun, and Visual Studio was collateral damage (or icing depending upon one's perspective).]  Collaboration is the much stronger market play here for Sun and IBM, and most importantly OO.o users and customers.

From the IBM perspective, this is brilliant business as usual.  ODF is the global leverage they need to crack open the Microsoft Office marketplace.  (I've written ad nauseam that ODF and Microsoft Office is just another example of Christensen economics in motion.  Microsoft has over-delivered on Office.  They mistakenly think more innovation faster is the answer.  Let the chips fall where they may.)  IBM will likely use OpenOffice to front-end Lotus and the Domino server product lines, and anchor their business messages to their customers's needs around standards and open source software, much the same as they do with Eclipse and the Websphere developer world.  Their claims are that much stronger with this announcement.

Sun gave Gnome a huge leg up about four years ago when they contributed a wealth of their accessibility technology R+D.  IBM will now contribute the same into OpenOffice.org.  It means they can easily manage their way through U.S. government procurement regulation in this space.  Once again brilliant IP management from IBM, and good for OO.o users and customers.  [For those that have heard me present, this is exactly what I mean about having a mature intellectual asset strategy, and being generous exactly in order to play to win.]

A strengthened OpenOffice.org will help Novell immeasurably to keep their distance with Microsoft on the desktop.  Novell has done a lot of work with OO.o in the past.  They have a great desktop Linux product.  They can simply take a ride on this one and eat the benefits.  There's really nothing Microsoft can say here.  Regardless of any agreements around OOXML that Novell may have with Microsoft, Novell comes out clean on the ODF front as customers demand it.

I noticed the press release includes a quote from Beijing's Redflag Chinese 2000 Software Co., Ltd., the makers of Redflag Linux and RedOffice.  This is significant.  Apparently last November I was one of the first people to blog about the document format work in China that led to a Chinese national standard (UOF).  Redflag Chinese 2000 was implementing UOF in Red Office (the Chinese packaging of OO.o).  There is work afoot to harmonize ODF and UOF.  And clearly Redflag Chinese 2000 remains committed to the OO.o effort.

So despite the bluff and bluster, the OOXML camp inside Microsoft should not be sleeping well at this point. 

"Don't blink.  Blink and you're dead.  Don't turn your back.  Don't look away.  And don't blink.  Good luck!" — the Doctor

eBox and Warp Networks

I met Ignacio Correas, CEO of Warp Networks (Spain), at the Open Source Business Conference last Spring. This is when I first heard about Warp Networks and the eBox platform. Warp Networks is a consultancy in Zaragoza, Spain, founded by some of Spain's more active open source developers from the Debian, Ubuntu, Gnome and MySQL projects.

eBox is an open source software project Warp Networks began. It allows one to easily install, configure, and manage a small enterprise server, for all the services one would need in a small and growing enterprise: VoIP, email (with integrated antispam and antivirus services), file sharing, etc. The community has been steadily building around eBox to the point that it will likely be the Ubuntu Gutsy Gibbon server configuration platform.

Ignacio is in the process of developing a separate company around the eBox platform and has begun funding discussions. Mikko Puhakka, Timo Teimonen, and I have all been invited to serve as directors prior to the commercial launch. eBox presents some great opportunities for a business based on open source software. (When you stop and think about it, it fills a very special niche.) I'm extremely happy to be on board! I'll certainly keep people posted as the business unfolds.

Thank You to All of My Readers!

My blog statistics indicate that I crossed the magic 100,000 page view mark today. To all of my regular readers, thank you. I understand that many blogs in our corner of the world see that many impressions in a month, and I certainly still see my share of Google searches for Shakespeare's "once more into the breach." I'm extraordinarily happy with my readership, however, based on the places I see the blog referenced, and the comments and email I've received over this past two and a half years.

I write because I have something to say, and not to any schedule, but it would be hollow work if there was no one reading and responding. I consider it a privilege to write and publish for my audience. So thank you again, one and all. Hopefully I remain thought provoking and at the very least entertaining.

pax

Free and Open Source Software Licensing Presentations (including GPLv3)

I've recently listened to an excellent presentation on free and open source software from Jason Haislmaier, a partner at Holme, Roberts & Owen in Boulder, Colorado.  His slides are posted on his blog.  He presented the work as a webinar at Matt Asay's (Alfresco) request.  I offered to host Jason's audio through my podcast, and to that end I have broken it into 3 parts:

• Episode 02 - Free and Open Source Licensing (Part 1) [29:05]
• Episode 03 - Free and Open Source Licensing (Part 2) [40:05]
• Episode 04 - Free and Open Source Licensing (Q&A)    [26:25]

[If you're an iTunes fan, you can find the podcast feed via the iTunes store as well.  Search for "Stephen Walli" in Podcasts.]

Mark Radcliffe from DLA Piper LLC also recently published a presentation that is a great introduction to free and open source software in general, and the GPL Version 3 (GPLv3) in particular.  The early presentation is pretty straight forward introductory level material, but around 34:00 [slide 12] he begins the discussion on GPLv3.  Mark led one of the committees (Committee C) that helped develop GPLv3 so it's a great perspective.  Instructions to get to the slides and audio are available on Mark's blog. 

If you're interested in legal issues and free and open source software, both gentlemen bring great experience and perspective to the issues through there blogs. 

Microsoft, Moonlight, and Open Source Software (and Novell's Brilliance!)

There's been interesting news about Microsoft support for the Novell Moonlight project this past few days.  Miguel de Icaza as community leader around Mono and Moonlight best tells the news on his blog, and points to Scott Guthrie's supporting blog post from Microsoft.  Tim O'Reilly points out that Microsoft will (predictably) support open source software for competitive advantage, in this case against Adobe.  Matt Asay supports Tim with the observation that Microsoft will use open source "where it's weak" and chides the two companies to just consummate the marriage.   

All the Moonlight support from Microsoft is a Very Good Thing for Moonlight and Novell, but let's be clear: Microsoft's participation in Moonlight is NOT Microsoft doing open source software. 

No code has been contributed to a community under a liberal license.  (As Miguel says, "Microsoft will give Novell access to the test suites for Silverlight to ensure that we have a compatible specification.")  No IP has been contributed to a community under a liberal license.  ("The codecs will be binary codecs, and they will only be licensed for use with Moonlight on a web browser".) 

Novell is doing the heavy lifting with help from Microsoft.  And in return, Novell is actually being pretty savvy (despite Matt's regular swipes at them for a lack of open source creativity and strategy).

• Novell is anchoring itself rapidly as the other cornerstone for cross-platform programming between Windows and Linux.  This gives them a valuable community center of gravity with respect to the enterprise that is much more valuable with customers than "we're not Red Hat".  Miguel has demonstrated himself as a brilliant community leader over the years.  Influence and IP control — It's all good for business. 
• It allows Novell to move Mono beyond the patent FUD and "science experiment" label Microsoft has traditionally thrown at it.  [Mary Jo Foley correctly called this one out.]  For Microsoft to renege on this very public initiative, or to try to claim behind closed doors that they like Moonlight but not Mono will demonstrate to customers once and for all that Microsoft doesn't understand the customer cross-platform/interop needs.  While Moonlight may be a great desktop experience, Mono is also all about server-side applications. 
• Before Microsoft gets any [BROKEN!] ideas around trying to jam yet another unproved specification through the standards process, Novell is anchoring the specification with a second high profile external implementation on another platform.  [This is a Very Very Good Thing for everyone.]

Microsoft certainly gains in the bargain as well.  They get to maintain a position on a multi-platform field they would otherwise forfeit to Adobe's open source maneuvering and market history around Flex and Flash.  They get to be seen publicly collaborating on Linux-based technologies so as to foster the belief with customers that they do genuinely care about cross-platform interoperability (and anchored around C# and .NET technologies).  They may even be in a GREAT position with respect to some customers to be the single source vendor of platforms when one considers the other collaboration deals in place with Novell.  It's win:win for each of them. 

But it's not Microsoft doing open source.  When we start to see Microsoft developer participation in the public code contributions for Moonlight, then they can claim to be "doing open source."  Regardless of the open sourcery of it all, however, it will be fascinating to see where this initiative goes.