Waugh: Open source success means juggling commerce and community

Balancing commercial interest with community interest is important for businesses looking at open source, said open source consultant Pia Waugh in a presentation at Linuxworld 2006 in Sydney last week.

"We've already seen businesses that have built themselves on open source, but then twisted the term. That can then get the community off side and result in negative publicity," she said.

"So if you come into this space, you need to understand the culture, and what drives this space, so that you can leverage the community."

Waugh said it is crucial to first understand the world of open source and not to think of it merely as an alternative technology. Understanding that will help you better understand the opportunities it can bring and also the mitigated risks.

The world of open source, she said, is made up of four pillars- open source, open standards, open knowledge and open community. The more aspects that a project covers, the more sustainable it is likely to be.

"Understanding these four pillars helps in mapping out a strategy and working out how you want to leverage open source for how you do business. It also helps you negotiate with vendors," she said.

Waugh said there are many business models for people looking to commercialize open source.

These include the dual-licence model such as MySQL which a lot of other projects use, and also the product-plus-services model, where you can make the product freely available and then build services around that.

"Services might be implementation support, but could also be value-adds, online or professional services," she said.

"There is another model where you might have a very specific thing you do in your industry, such as supplying geographic information - or anything that crunches data and makes it useful. That process itself might be open source, but you can make money from the data."

In creating an open source strategy, Waugh suggests businesses look at what skills they already have and how best to marry these skills, look at what open source already exists in the organization and be strategic in how it is deployed

"It is also important to look at the business structure and work out how open source can be used to support long-term business goals," she said.

"Look at how people in the organization use their systems. Let's say 40 percent of people only use a Web browser and e-mail for their work, so 40 percent of desktops can be run on open office and Firefox resulting in an instant cost saving," she said.

Determining where the value comes from in your business is another important aspect to work out when embarking on an open source implementation.

"A lot of people instantly say they don't want to open their code because they don't want their competitor to get it," Waugh said.

"But it is important to look at the difference between a cost of your business and a competitive differentiator."

A human resources (HR) system is an example of an application that is a cost to most industry, she said.

"In a legal firm, for instance, the HR system they use isn't their competitive differentiator, so it makes a lot of sense to save money and development time and use open source tools that are already out there and may do up to 80 percent of what they need."

Waugh hopes that industry will increasingly see the value in collaboration over solutions that will solve issues for everyone.

"Solving issues as an industry can make for a stronger industry all around, and it redirects a whole lot of resources towards the aspects [each company] wants to compete on individually," she said.