Analyst: Open source commercialization: transparent but not permeable (O'Mahony and West)

This is related to O'Mahony's and West's work on sponsored communities. I can't provide a link to the new research, because they sent me a pre-release version of a soon-to-be-published paper, but it should be out shortly.

Those deeply embedded in the open source business community won't find this surprising, but others may:

While all sponsors [of various open source projects comprising their data set, including SugarCRM, MySQL, Mozilla, etc.] hoped to receive new ideas and bug fixes from community members, only some noted significant community contributions to the code (such as the reduced cost of testing) - for many this was a secondary goal. Instead, sponsors emphasized factors such as encouraging product adoption and fostering a third-party supply of complementary products, consistent with West (2003; West and Gallagher, 2004). (15-16)

The idea that open source (for commercial firms, anyway) may be more about distribution than development should surprise none that have attended OSBC in years past, or otherwise kept up with the ongoing discussion.

Used well, open source creates a highly efficient distribution mechanism. Siobhan and Joel find that most sponsored open source projects aren't in it for the code they'll get back, but rather for "increased public awareness, accelerated low cost distribution, and reduced costs of marketing." (16) They then capture John Roberts, CEO of SugarCRM (they don't identify him in the paper, but I've heard this inspired rant from John before, so I'll assign credit :-) at his best:

"Every dollar you give [proprietary competitor], 70 cents to goes to fund the sales and marketing efforts, and maybe 11-14% actually goes to pay the engineering salaries that write the code.

The barrier to entry into this marketspace isn'’t building a better product, it is having $50-60 million a year just to blow on sales and marketing. And thatÂ’s really a shame. I just thought that was really frustrating from someone that is an innovator, someone that wants to compete by building a better product [rather than] on just the sheer economics of sales and marketing."

Great stuff, John.

Importantly for those thinking of starting open source companies, Siobhan and Joel find that existing sponsored projects generally err on the side of transparency, but few actually give true permeability. (17-19) That is, most sponsored projects are happy to have outside contributors look and even contribute back code, but they retain (for some obvious reasons, not the least of which is support) ultimate control over the code itself.

Question, then: is this open source? Or is it shared source? It's funny to me that Microsoft gets pummeled for being so restrictive with its code, when what they offer (for some code, mind you, not all) something not too dissimilar from what, effectively, some of our leading open source projects offer. Transparency, but not true permeability. (Btw, I'm not taking sides on this. I just find it ironic.) I think it squarely fits within the emerging, expanding view of open source.