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Hybrid Business Models Strategies (OSS (Reseach issues (need motivation to…
Hybrid Business Models Strategies
OSS
software licensing paradigm
Development Paradign
Free Software Foundation, 1985
Founder of OSS
counter the influence of proprietary organizations
Source code public
Source code modifiable
Lead creation of widely available softwares
e.g to OSS is Linux
Reseach issues
need motivation to participate
Competitive dynamic of OSS
Advantages
Faster development
Faster product distribution
Proprietary Software
Developed inhouse
Source code not shared
Source code not modifiable
Developed by institutes like MIT
Developed by proprietary model
Hybrid Business Model
OSS being used part of company business model
Integratng Open source with proprietary
Configuration of organizational practices
Practices are still unknown
need for further exploration
need for further elaboration
OSS created by commercial organization
Community participation
OpenBravo ERP
Five Management Practices
Three emergent strategies
Business Models defined by
No well defined term
Represent map of activities
Value creation
Value Delivery
Revenue generation
highly contectualized
Interface with people
Interface with resources
Organizaiton
Process
Interrelated set of coordinated activities
To achieve certain goal
Practices
linking actions of activities of business to its existance
organization routine use of knowledge
Conduct particular function
Origin of Open Source Software
Generated from Free software foundation
Established by Richard Stallman in 1980
to counter proprietary software
grew from the need to share software
was common between hackers and scientists
License scheme GPL
at the beginning was limited to research labs
made to offer more accessible concept to software
Private collective model of innovation
Earliest attempts to conceptualize OSS
Proposed by von Hippel and con Krogh 2003
OSS does not coincide with private investments
OSS belongs to a third category of innovation model
developers
contribute their private resource
release their code freely
get private rewards
Enjoyment
fame
learning
sense of control over invention
Development of Hybrid Business models for software
OSS offers several advantages
Faster development
faster distribution
access to wider workfource
Proprietary software companies participating in OSS
it leads to conflict
Convergent and divergent interest
critical to manage both models
how much conflict can be tackled?
Motivation and benefit of firms
different firms have different motivations
Three level of interface
Symbiotic (organization and OSS benifit)
altruistic (OSS project benefit)
parasitic ( benefit the organization)
Interfaces not necessary to be sequential
Community consist of unknown workforce
Techniques
employee role
governance
Access control
Ownership
Actual participation approach
Openning company software
phased approach
tactical approach
exploiting resources
ways for interefereing with OSS
Internal use of OSS components
Internal use of technologies
Multi-modal involvment
Use of OSS practices
organization interface become increasing oriented to business model
West and Gallagher (2006) 4 models
pooled research and development
firms develop under OSS license
firms donate code to OSS communities
selling complement under OSS to make money
OSS being stakeholder for firms using OSS
Defining practices and strategies
organization practices help knowing organization strategies
trend practive-turn
organization routine use of knowledge eveloved
influence of organization history
influence of people
influence of interest
influence of actions
linking organization practices and Hybrid Business model
context is important when company changes its model
organizational practices combines activities with context
provide suitable theoretical perspective for studying hybrid business
case studies
Appropriate to study phenomenon with real life context
investigators has little control over the events
research questions satisfy these criteria
modified ground theory approach adopted
case study for OpenBravo
5-March meeting with Business development manager
Responsible for overall product marketing and business development
11-March meeting with Manager OpenBravo forge
Responsible for maintaining Openbravo Forge; a custom platform for developing software
3-March meeting with Product development manager
Responsible for managing internal processes for product development
16-March meeting with Manager (Asia pacific)
Responsible for maintaining network of ISV, retailers etc. in Asia–Pacific
23-Feb meeting with CTO
Responsible for product strategy
12-April meeting with CTO
Sharing Draft of case for further input
11-Feb meeting with CEO
Explaining proposal
21-June meeting with development managers
Sharing second draft and seeking input
Analysis
Interest
22 total number of excerpts
they had an objective to serve local companies with an ERP
they wanted to leverage Open source technology components
So having an active and involved community was very important for us
History
4 total number of excerpts
History of Openbravo was that it was a project started by a group of local software developers in Pamplona’
that time in 2006 there were only three open source ERPs so the space wasn’t as crowded as it is now
People
28 total number of excerpts
We have been very lucky we had at that time a community manager who had a lot of experience in open
source,
Our community is a different from other communities in a sense that we are a bit removed from
Action
30 total number of excerpts
They decided to recruit management, people with more experience that could move project forward
At the beginning of each development cycle we have a kind of an open discussion with our community about
what should be the features that should be targeted in the next release
OpenBravo ERP
Uses OpenBravo Public license
April 2006 Released source code in
September 2006 was ranked number 3 on SourceForge.net
Octobor 2007 Openbravo ranked #1 on sourceforge.net
January 2007, 200,000 downloads to the app
February 2008 reached 500,000 download
May 2008 received 12M euro in capital funding
July 2009 more than 100 partners in 40 countries
Openbravo Organizational practices
Applicable to hybrid Business Model
Providing Freedom to Develop Proprietary
Extensions
Attract partners by providing mechanisim to develop their business on top of Openbravo
Special license OBPL based on MPL
facilitated the development of local copies
distribution dependent on partners network
single license for commercial and enterprise model
Free Access to Maintenance Packs for
Community Edition
Subsequent maintenance was available for prof edition
community edition was unstable and needed fix to survive
community needed access to maintenance track
Openbravo provided free access for maintenance tack
openbravo altered its support policy to provide it freely
Openbravo forced community edition to request approval to get access to maintenance track
Linking different sections of the community
for product development
Community
End users
little understanding of technicality
oblivious to the fact that Openbravo ERP is open source
third party users
contribute to product development
partners
Globally distributed
contribution to localize Openbravo ERP
changes in software language to meet local requirment
OpenBravo links partners together to develop software and earn revenue
Functional differentiation between
community and enterprise editions
available in two editions
Community edition
obtain software distribution
Acted as competitor to enterprise edition
3rd party will use it to develop their community edition
create less features
enterprise edition
obtain revenue
create more features
provide support
provide maintenance track
Plan to invert customer from community to enterprise edition
both developed by single vendor
increasing similarity of both versions
Challanges
Maintain distinction between community and enterprise editions
differentiate by functionality
differentiate by support
Customized Platform for Open Product
Development
Initially hosted on SourceForge.net
Different functionality for different community members
provide accessibility of information per community
restrict access to customer development
Applicable to proprietary Business Model
Developing partners-based distribution model
Product development as per a development
roadmap
Adopting platform-based strategy for
software product
Strategies Hybrid Business model
Segmented meshing
Linking different sections of the community for product development
mized platform to support open product
development
Strategic licensing
Providing freedom to develop proprietary license
Selective revealing
Differentiate between community and professional edition
providing free access to maintenance track for community
right balance between sharing and protection
Factors influencing adoption of hybrid business models
voting rights to members
balancing the open source and proprietary facets
Leadership remains a key influencer
knowledge sharing comlexity
adoption process can be tric
available public wiki