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Being Thankful for Open Source (But Why Do Companies Do It?)

It's Thanksgiving time, and I'm surely thankful for the free open source software I use. But going open source always seemed counter-intuitive to me. Why would a company invest time, money and development resources to create valuable intellectual property and then throw it out to everyone to use for free as they see fit?

Especially if they see fit to use your open source software against you in competitive products. That's reportedly what happened with mobile dev company RoboVM.

"We have seen competitors actively exploiting our good faith by using our open source code to compete with us directly in commercial products," read a recent Google Groups post from RoboVM exec Mario Zechner about the company's decision to end its open source efforts.

Henric Müller, CEO, wrote his own post on the matter. "We have received no notable external contributions to the components that represent the core of our product," he wrote, which "means that neither RoboVM customers nor us, as the maintainers of RoboVM, have realized any benefits to sharing the products source under such liberal terms." (You can read more details here.)

Which got me to thinking. Why isn't this happening to more companies? You always hear about the many benefits of open source, but exactly how are companies benefitting from creating products for free?

User and Developer Benefits Are Clear
It's much easier to understand from the users' and developers' point of view. For users, it's: Hello, free software! For developers, they get experience, perhaps exposure and even notoriety and fame (hey, it worked for Linus), improved marketability and surely just "feel good" satisfaction in contributing to the greater good and seeing their creations publicized and put to use.

Some researchers recently tackled the question, publishing an official academic study examining the "Motivation, values, and work design as drivers of participation in the R open source project for statistical computing." But it's full of research-ese nonsense like "The data are analyzed using item response models and subsequent generalized linear models, showing that the most important determinants for participation are a hybrid form of motivation and the social characteristics of the work design. Other factors are found to have less impact or influence only specific aspects of participation."

I don't know what that means and I'm not paying for the report to try to find out. Why can't they talk in plain English? Why can't they open source their research?

On Quora, where they talk in plain English, a question asked "How rewarding is open source for a programmer's career?" One answer included this: "The reason I 'open source' my code, or at least talk about it at length, is -- I find it rewarding that I am lessening the suffering of other developers and that others may go on to discover new things thanks to work I have done." Another answer said: "Many of us program for the sheer love of programming. The money is just gravy."

Microsoft's Big-Time Turnaround
Well, the gravy is essential to for-profit companies -- it kind of keeps them going. They're not so much into "feel good" satisfaction, leaning more toward a bottom-line profit. How does open source contribute to that? Take Microsoft, the poster child for doing an about-face turnaround on the issue. After years of being the bastion of proprietary software, they've gone nuts, open sourcing everything from its .NET Framework to Visual Studio itself. Where will it end, with Windows?

How is that helping the company? I can see the obvious things: community goodwill, greater exposure and branding, loss leaders for profitable products and so on. But how much does that help the bottom line, and how do you even measure any financial impact?


Open source champion journalist Steven J. Vaughan-Nichols shed some light on the matter in a recent Redmond Magazine cover story, "How Open Source Is Shaping Microsoft's Future." He quoted Allison Randl, president of the Open Source Initiative, as saying companies need to go open source or get left behind in the software development game.

"Microsoft knows this and is aware it can no longer take a 'not invented here' attitude any more," Vaughan-Nichols wrote. "Microsoft's new management realizes the old proprietary software business model that served it well for so many decades has been milked as much as it can be. Hence, Microsoft has been moving to a service-oriented business model and, at the same time, the company is moving to open source software to power those services."

I don't know. It all sounds good, but I still don't see a clear profit motive. So I went looking for more answers.

An Open Source Expert Chimes In
I started off asking Mr. Open Source himself, Steven Vaughan-Nichols, mentioning the RoboVM case.

"Today, the question isn't 'Why open source?' he replied in an e-mail. "It's 'Why would you not open source your software?' The more eyes you get, the more help you can find, the greater your project's development resources. Today the only major software company that hasn't bowed to this categorical imperative is Apple. ​As for RoboVM, I don't know the details, but I strongly suspect their problem boiled down to 'They were doing it wrong.'"

I asked Vaughan-Nichols about the "using-it-against-us" reasoning of RoboVM in explaining why they quit open source. "Companies in the open source space, including even [Microsoft] these days, have to change their business plan focus," he replied. "The shorthand I use to explain this shift is that you're no longer trying so much to get a bigger slice of a pie, you're trying to expand the size of the pie.

"So, they should be using their open-source code in their own commercial products," Vaughan-Nichols continued. "They should be spending their marketing dollars on explaining why their commercial adaptation is better than their competition's, expanding their support services. If someone is actually ripping off their code and putting it into a proprietary product, it's time to turn to the lawyers. Depending on the license they're using, there's almost always a way to throw water on someone who's simply stealing code."

What the Web Says
There are many more opinions on the Web, of course.

An article on offered "5 Reasons Your Company Should Open Source More Code," boiling down to: great advertising; a force multiplier (if others work on your project); attract talent; best technical interview possible for companies that are hiring; retaining talent.

Another Quora question asked "How would companies make money if all software was open source?" One answer read:

  • Ads: Twitter, is built using open source code. Also signing up for it is free. In spite of that, it is valued at $18bn+. And 85 percent of its revenue comes from advertisements.
  • Hardware: Android, one of the most widely used mobile operating system is open source. But Android also needs hardware to run on. Individual hardware making companies mod android according to their needs (and also pack in a few proprietary software sometimes) and ship their devices.
  • Services: Netflix is open source too. But it does charge a sum of money for its services. Also Wordpress, being open source, charges for domain names and hosting spaces.
  • Value added contents: While open source codes are free to download and use, it is also possible to charge for premium content. Like Wordpress gives you a set of themes to work with, but it gives you the option to buy themes too!

Divio recently explained "Why we support open-source software." "It's not always clear to people why companies like Divio -- businesses that need to make a profit -- would want to give money away to open-source communities and projects," the article states. "Giving money away, after all, is not the first thing one would put on a business plan."

Part of the reason Divio does it is community goodwill, along with return on investment that might not be immediate and might not be obvious, like long-term community investments. "The fact that many companies -- successful, profitable, sensible ones, like Divio -- do make those long-term investments in the community is an indication that this is a wise way for them to spend their money," the article states.

Wired recently wrote that "Open Source Is Going Even More Open -- Because It Has To." "Why are so many companies giving away their intellectual property?" the article asks. "It's not happening for altruistic reasons."

Rather, Wired said in discussion about Google's decision to give away rights to the Kubernetes cloud computing system, "Companies like Google want others to use their open source software since it can help drive the use of online services, like Google's cloud computing tools. They want others to contribute code to this software too. But increasingly, others don't want to use or contribute to projects unless they're independently managed."

So you get the idea. A lot of "soft" reasoning, but not much hard data on how open sourcing your software contributes to the bottom line.

Nah, It Can't Work
And there are some naysayers. CIO recently explained "Why the open source business model is a failure." "Open source software companies must move to the cloud and add proprietary code to their products to succeed," the article stated, citing the conclusion of venture capitalist Peter Levine at Andreessen Horowitz. "The current business model is recipe for failure."

"Levine says the conventional open source business model is flawed: Open source companies that charge for maintenance, support, warranties and indemnities for an application or operating system that is available for free simply can't generate enough revenue," the article states.

So I'm back to square one. Divio says the fact that successful companies are doing it proves its value. A venture capitalist says it can't succeed. Microsoft is doing it in a big way. Apple isn't doing it much at all. Red Hat is living it. What's the answer? Where's the data?

You tell me. Comment here or drop me a line. Why are for-profit companies open sourcing their software? I'm crowd-sourcing the open source question.

Posted by David Ramel on November 19, 2015