Literature Summary

Literature Digital Innovation

Week 5 Some simple economics of open source

Open-source software development involves developers at many different locations and
organizations sharing code to develop and refine programs.

 Open-source software development
o Three factors of interests
 The rapid diffusion of open-source software
 Open-source products are diffusing fast and might become to
challenge Microsoft
 The significant capital investments in open-source projects
 Many big firms have invested in projects to develop open-
source software
 Other firms have received venture capital financing
 The new organization structures
 The collaborative nature of open-source software development
is seen as an important organization innovation
o Why is it such a success?
 Why do successful programmers contribute freely?
 Altruism has not played a big role in other industries  not very likely
that they only contribute for the greater good
 Nature of open-source software
o Diffusion of internet helps increasing the scale and formalization of
cooperation and sharing in software development
o Three eras’
 First era = early 1960s to early 1980s
 Sharing by programmers in different organizations of basic
operating code of computer programs, the source code, was
commonplace
 Focus on development of an operating system that could run
on multiple computer platforms
 Highly informal basis  no property right
 Became problematic in early 1980s when AT&T began
enforcing them
 Second era = early 1980s to early 1990s
 First efforts to formalize the ground rules behind the
cooperative software development process
 When able to modify and distribute software programmers had
to agree to make the source code freely available  also no
licensing restrictions on others
 Contractual terms distinguish open-source software form
shareware (not free)
 Third era = early 1990s to today (2002)
 Widespread diffusion of the internet increased the open-
source activity

,  More interaction between commercial and open-source
companies
 Alternative approaches to licensing cooperatively developed
software  right to bundle cooperatively developed software
with proprietary code
 Open-source definition = license must not contaminate other
software, the license must no place restrictions on other
software that is distributed along with the licensed software
o Example  the license must not insist that all other
programs distributed on the same medium must be
open-source software
o Distributors of open-source software have the right to
make their own choices about their own software
o Challenges of open-source software
 Forking of projects
 The development of competing variations and the
development of products for high-end users
 Splintering into various variants
 Lesser emphasis on documentation and support, user interfaces, and
backward compatibility in open-source projects
 More for the more sophisticated users
o Who contributes?
 Distribution of contributors is skewed in number of contributions
 Open-source process is elitist  few important contributors and small
core
 Problem of the elitist movement  can steer innovation more
 Difficulty increases because elitist people are knowledgeable
 Commercial software is ‘easier’
 Four programs
o Apache
 One of the first commercial internet servers in the country,
responsibility was for Behlendorf
 Running the Unix-based software
 NCSA had distributed its source code freely and had a development
group actively involved in refining the code in consultation with the
pioneering users
 NCSA staff was frustrating Behlendorf by not responding to their
suggestion
 He and six others decided to establish a mailing list to collect the
patches to NCSA server software
 Chances to the application program interface  enabled
programmers to make contributions to particular areas without affect
other aspects of the program
 Little competition, so they stayed dominant  apache software
foundation oversaw the development and diffusion of the program
(1999)
o Linux