Why Open Source? And how?

Of late, there has been increasing academic and business attention given to the open-source software phenomenon. In 2004, Yale law professor Yochai Benkler examined the phenomena of car-pooling and distributed computing in an essay entitled "Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production" Summarizing his 84 page essay, Benkler writes:

"Social production and exchange comprises a third system of production, a class of solutions to production problems that is separate from, and can complement or substitute for, the two more commonly studied systems: markets ”through both the price system and the firm”and the state." "...the form of sharing that we observe today occurring in information and communications production—relatively impersonal, project- or function-specific, radically decentralized cooperation—depends on the technologically contingent physical-capital requirements for effective action. As capital requirements have declined and access to the relevant capital goods has become widely disseminated in advanced economies, the scope of sharing as a modality of production has increased." "We must learn...how to adjust our expectations, assumptions, and, ultimately, policy prescriptions to accommodate the emerging importance of social relations in general, and sharing in particular, as a modality of economic production."

In March, 2006 The Economist magazine notes the importance and power of the open-source phenomenon:

"More than two-thirds of websites are hosted using Apache, an open-source product that trounces commercial rivals. Wikipedia, an online encyclopedia with around 2.6m entries in more than 120 languages, gets more visitors each day than the New York Times's site, yet is created entirely by the public" "To get a sense of just how powerful the open-source method can be, consider the Firefox web browser. Over the last three years it has crept up on mighty Microsoft to claim a market share of around 14% in America and 20% in parts of Europe. Firefox is really a phoenix: its code was created from the ashes of Netscape, which was acquired by AOL in 1998 when it was clear that it had lost the “browser war” to Microsoft. Today, the Mozilla Foundation manages the code and employs a dozen full-time developers. From that core group, the open-source method lets a series of concentric circles form. First, there are around 400 contributors trusted to offer code into the source tree, usually after a two-stage review. Farther out, thousands of people submit software patches to be sized up (a useful way to establish yourself as new programming talent). An even larger ring includes the tens of thousands of people who download the full source code each week to scrutinise bits of it. Finally, more than 500,000 people use test versions of forthcoming releases (one-fifth of them take the time to report problems in bug reports). Traditional profit-seeking firms cannot usually rely on their customers to play an active role in their product development. In fact, they often strongly resist any such interference. For decades software was "proprietary", because secret code could not be copied or used without payment. Moreover, the closed approach is seen as a way to prevent exposing possible security flaws. By contrast, open source encourages sharing, and its greater scrutiny may translate into cleaner code. As a cherished open-source adage has it: "Given enough eyeballs, all bugs are shallow."

Of critical importance to the success of an open source venture, the article argues, are leadership and decision-making structures that safeguard the quality and integrity of the "source." The article suggests,

"The way open-source projects organise themselves is critical to ensuring their quality. Rather than harnessing a magical, bubbling-up of creativity from cyberspace, many open-source projects have established formal, hierarchical governance. "These are not anarchistic things when you look at successful open-source projects", ”there is real structure, real checks and balances, and real leadership taking place," explains Josh Lerner, a professor at Harvard Business School. A good example is MySQL, a type of open-source database software used by companies including Google (to serve up advertisements alongside search results), Yahoo! and Travelocity. The company, founded in 1995, has a hybrid business model. It gives away its software under an open-source licence. At the same time, it sells its software along with maintenance and support contracts. The firm has around 8,000 customers who pay 1-10% of the amount they would spend on proprietary products. Yet for every paying customer, MySQL estimates around 1,000 people use the free version. "We don't mind," says Marten Mickos, boss of MySQL since 2001, "they help us with other things." For example, making the code open encourages a group of users (who may one day become paying customers) to become familiar with it. This creates a talent pool that the firm can draw upon for future employees. Companies developing software products that work with MySQL are potential acquisitions. The community of users freely gives feedback on new features and bugs. It also writes ancillary software and documentation, all of which enhances the value of the core product. When it comes to the software itself, the company is very much in charge. It rarely accepts code from outside developers (the complexity of database software makes it less amenable to being independently cobbled together). Instead, MySQL employs 60 developers, based in 25 countries, of whom 70% work from home. "We maintain full governance of the source code. That allows us to go to the commercial users of the product and guarantee the product," explains Mr Mickos. "You could say that this is what they pay for."