Franchising, open source, and "methods of doing business"

After reading Asay's post on this subject, I think this is a great idea, and very pertinent to things we're doing now at SourceForge. I don't think there's an open-source company out there making this their primary business model. Dual-License, support, merchandising, patronage .... all of these seem to have at least 1 exemplary business - maybe MySQL, Red Hat, Firefox, and Eclipse respectively?

As he says, this is somewhat present in some of the various open-source certification programs out there, and the single comment on the post asks if franchising is "a mere 'Certification program' that entitles a company to provide professional suport/developemnt of a product/service with the support of other vendor/provider. Is my assumption correct?" I think this assumption is only partially correct.

Franchising is a little bit more - "a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees" according to Wikipedia. (emphasis mine) Most (all?) existing open source certification programs are only about tried and proven technical skills. One of the biggest lessons the open source software industry is teaching is that "methods of doing business" are much harder, more important, and more valuable to get right, in terms of making money.

I do think there's room in the community for some big franchising companies, and I think they could really help the uptake and adoption of open source software in many markets. However, I don't think "franchising" is the only method which can inject those "tried and proven methods of doing business" into the open source software community.

IMHO, this - to provide tried and proven methods of doing business to the open source community - is and should be the mission of SourceForge Marketplace. In our case, we cannot (and should not) "license" the methods, but rather we should provide all the tools necessary for anyone, from a single person to an enterprise, to easily implement any methods they want. If we can do this, it will benefit me, SourceForge, and the open source community.

Reports of the death of the Long Tail have been greatly exxagerated.

People sure are making a stink about this post (with a questionable set of data, IMO) which purports to demonstrate that the Long Tail of web traffic is actually shrinking. Nick Carr has an excellent response explaining why the Long Tail is not shrinking, but rather, the economic value of the Long Tail is merely concentrating. This all falls within the scope of Anderson's previously asserted effects of the rise of the Long Tail - content aggregators will become (apparently ARE) the biggest winners in the phenomenon.

I'd like to expand just a bit on his explanation of how Myspace & Facebook are actually Long Tail websites - i.e., they aggregate the Long Tail of millions of personal mini-websites.

It should also be noted that Google, Yahoo, eBay, and craigslist are other Long Tail websites. Google and Yahoo are built on the long tail of search words (and subsequently related ads!), while eBay and craigslist aggregate the Long Tail of products for sale online.

So, of the top 9 sites (We all know pogo.com is not really in the top 10, right?), 6 are Long Tail sites? Well, even aol.com can be labeled as a Long Tail website, considering that their real list of top 10 searches are for those other Long Tail sites.

That leaves only msn.com and live.com as non-Long Tail sites in the top 10, right? Without the search data from those sites, it's hard to know for sure, but they could likely be similar to AOL - a mere entry point to the other Long Tail kings. Additionally, I've long suspected msn.com sneaks onto the tops of these lists merely for all the visits coming from IE browser users that haven't changed their default home page.

The Long Tail is NOT shrinking on the web. It's growing and the winners are exactly who was predicted - big-time aggregators.

Tivoisation & rational FUD

Most of the stuff I've read or listened to from RMS is full of populist rhetoric, which I don't really find interesting. Some of it is priceless, but to me it's not usually worth the effort of sifting thru all the preaching to find the gems.

However, I very much liked his talk from the 5th International GPLv3 conference. In this one, he seems much more to-the-point. It's a very good explanation of the modifications in GPLv3 and the intentions behind them. (All of which are Noble and Good, but I think some of them are too far-reaching.)

One such modification/issue is "tivoisation." Stallman spells it out:

"They [Tivo] provide the users with source code and the users can then modify it and compile it and then install it in the Tivo. That's where the trouble begins because the Tivo will not run modified versions, the Tivo contains hardware designed to detect that the software has been changed and shuts down. So, regardless of the details of your modification, your modified version will not run in your Tivo."

I'm going to make a somewhat personal analogy to explain why I'm okay with the above scenario. I agree it's a reduction of freedom, but I'm okay with that (as I am with just about any other voluntarily-chosen freedom reduction).

My wife is a budding professional photographer (could be full-out professional if I ever finish her website!). One day I floated the idea to her of giving all of her clients (in addition to photo print packages) all of their photos in digital form on a CD so that they could do whatever they want with them - modify, copy, print, etc. She had a ready and pertinent response...

If one of her clients had a CD full of high-quality digital photos, and then made crappy modifications and walked down to a crappy photo print shop, they'd have some crappy photos. When one of their friends goes over and sees a bunch of crappy photos, they're bound to ask, "So, who took all these portraits?" and not, "Why do these photos look like crap?"

So, it's in her best interest NOT to allow modifications and printing - she has rational fear, uncertainty, and/or doubt about giving the digital source files to clients. The same might be said for Tivo. If someone has modified their Tivo box to look like crap, stop working, or whatever ... it reflects badly on Tivo to anyone else who might see that behavior as Tivo's doing. Tivo has rational FUD about giving all that freedom to its customers.

Like I said, this is not a "maximum-freedom" scenario, and I don't mind that the goal of GPLv3 is to maximize freedom, rather than maximize popularity. But I think GPL zealots would do well to consider that the prevalence of these kinds of situations and motivations induces some people into some legitimate FUD about some GPL stances & clauses. Like, maybe Tivo has more FUD about using GPL in the future, now that they're getting bad rep in the Free Software camp.

The Long Tail (of|and) Open Source Software

I've been wanting to write this post for a while now, so it's going to be long, and it's probably going to take a while to finally get it out the door.

I'm a big fan of The Long Tail - both the book and the blog. Chris Anderson has had a couple of posts dealing with the long tail of software - one about JotSpot, and one about AppExchange. I agree that both of these companies/products are very much centered on Long Tail software.

However, I've want to try to make the point that open-source software is very Long Tail-ish, and has actually been so long before these newcomers were even a twinkle in their respective entrepreneurs' eyes. I also want to show how open-source can be a better (maybe the best) platform for Long Tail software. (Though I think both JotSpot and AppExchange are Very Good platforms.)

One thing I'd like to use in support of my opinion is some actual data...

A nice long tail graph showing the top 100 SourceForge projects, and their total # of downloads on the y-axis. I think this is a crude, yet reasonably accurate, way to show demand for open-source software. Though this graph shows a tail, it is only the top 100, which is actually only the head. I'm using it here to show the SF equivalent to Amazon's "Harry Potter phenomenon" - a couple of super-hits that dominate even the small head of lesser hits. At SF, we call it the "eMule effect."



Here I've chopped off the top 2 super-hit projects, and I've expanded the observation window to 2000 projects at once. (I can't go much higher than a 2k window due to technical limitations on the workstation machine I used to create these graphs, and this window size still demonstrates what I want to demonstrate) But notice how the expanded window size, though still small relative to the whole data set, displays a more pronounced tail shape.




Beginning where the previous graph stopped, this one is showing projects ranked 2000-4000. So, while moving down into the tail region of SF projects, the tail-ish nature of the data is starting to smooth out to a more linear demand curve.








Here's the end of the tail - all the way out at project rank ~62,000. This is, of course, the essence of The Long Tail - that there is at least SOME amount of demand for even the most niche or obscure products. (I should note, however, that SF.net has 130,000 registered projects. So nearly 50% of the projects have no downloads - most likely because those projects have not released any files ... yet?)





So, I think the above data and graphs are sufficient to demonstrate the Long Tail nature of open-source software (assumming SF.net projects are a valid representation of the larger open-source body of software). But why would open-source be a better platform for Long Tail software? To answer that, I'd like to use some of Chris's own ideas.

For the purposes of this argument, I'm calling the "best" platform whichever platform is most aligned with the 3 forces which add economic and cultural significance of The Long Tail. Because, as these forces work, they maximize the value of all Long Tail consumers.

1. Democratization of the tools of production. This is an easy win for open-source over JotSpot or AppExchange. In both cases, the tools of production are held in the hands of single companies. JotSpot or AppExchange tools are tied to their server, their tag language, etc. For open-source software, nearly every tool you could ever need is totally free. The tail can be lengthened much faster this way. I doubt JotSpot or AppExchange will have 100k+ custom applications within 10 years. (Though they don't need to for their more-limited purposes.)

2. Democratizing distribution. Another easy win for open-source. All JotSpot or AppExchange products are married to that distribution channel. And in those cases, it isn't simply "the internet" - it's specifically those application domains on the internet. If you want more access to those niche products, you're locked into the JotSpot or Salesforce.com distribution channel. Not so with open-source, which can be found in many places, and isn't locked into any of them. I wonder how far one would get trying to take their AppExchange software product solo before Salesforce.com sued?

3. Connecting Supply and Demand. The only force in which open-source is not a clear winner, and therefore, IMO, the most pressing need facing the open-source community. However, I would point out that neither JotSpot nor AppExchange have demonstrated an ability to perform this well, given the tiny sizes of their "tails" - JotSpot with only 8 add-on applications, and AppExchange with only 400.

So, trite but true: 2 out of 3 isn't bad.

And I think it should be publicized how open-source software has already created and sustained a Long Tail of software for many many years now.

Windows EULA

Okay, just so people don't get the idea that I'm a supporter of Microsoft-style EULA's (though I'm also not a big supporter of GPL-style EULA's)...

Paul Thurrott is a man, just like you, except he has roots and fronds because he is also a plant. (Thanks to Tycho for that word-play)

Matt is funny and accurate as usual, so I'll continue on from Matt's thoughts.

Paul uses the same tactic with the other "newer, bigger than ever!" restrictions...Re: "Windows Transfer Rights" he says:

What's more amazing is that the number of people who actually try to do this is incredibly small. Since you can't transfer a copy of Windows that comes with a new PC anyway, less than 10 percent of all Windows licenses are transferable at all. And of those, only a tiny percentage of users have ever tried to even transfer a Windows license once. The only people that really need to do this regularly are hardcore PC enthusiasts who change their machine configurations regularly. In short, this new restriction isn't all that new and it won't affect any mainstream users.

To me, this just highlights the fact that Microsoft really doesn't give a crap about "developers, developers, developers, developers" anymore. Try calling up Microsoft with a technical programming support question sometime. We had a problem with .Net Framework for Windows CE a couple years back and when our main .Net engineer called MS, they basically said, "Tough. We'll try to get around to it in the next service pack."

I also like his similar "rebuttal" to the "Adding and removing PC components" issue.

Fewer than 5 percent of PC users ever open a PC case let alone perform major hardware surgery. But if you're one of those guys who regularly upgrades your PC's hardware, you'll be happy to hear that instances of forced reactivation because of hardware upgrades are less frequent under Vista than they were under XP. More to the point, this is another one of those issues that only affects a tiny, tiny percentage of Windows users.

More to Paul's point - new restrictions aren't really restrictions because most Windows users won't be affected. Uh, sure .... that makes all kinds of sense. Maybe thousands of developers, power-users, and enthusiasts are small in comparison to the entire Windows user-base ... but that doesn't really change the fact that these new restrictions are indeed that - restrictions.

I also have to rip into Paul for the notion that hardware upgrades are less frequent under Vista than Windows XP. I don't think he and I have been reading the same industry comments. So maybe it's not Vista's shiny new algorithm, but the fact that most Vista users (at least 90% are OEM, remember) users will have to buy a new computer just to run Vista?! Again, that's just a whole bundle of sense from Mr. Thurrott.

Matt Asay agrees with me

He didn't even know this, but Matt Asay and I agree that the freedom(BSD) > freedom(GPL). Matt sums up nicely what I've been writing recently:

Forcing people to share's one's version of freedom is not...free.

This is exactly how I feel. And some people might say, "Well, that's fine. But how can we all co-exist with differing versions of freedom?" And to that I would say, by having the kind of legal system which enables a variety of contracts which convey those different freedoms and stipulations over our creations.

Some bonus cherries with this approach is that people are dynamic. Their values and opinions are in a constant state of flux. Many (most?) people tailor their principles to match circumstances. Under the variety-of-contracts system, people can use different contracts at different times on different projects for different purposes. Like Asay thinks of the GPL, I think a CC-BY-NC-SA licensed product is like a bomb for a (would-be) competitor.

So someone can tactically employ CC-BY-NC-SA and CC-BY-ND simultaneously to create a dual-license business model. Imagine that - more variety among licensing principles and terms makes good business sense.

fun followup

As a fun followup to my previous post, I thought I'd illustrate the same point using this very cool Creative Commons comic. After reading the comic, you should have a clearer idea of what the CC licenses are all about, right? In addition, I like the spectrum perspective shown in the opening and closing panels, as well as the 2nd-to-last panel explaining "Public Domain."

So here are the (rough) analogies I draw:

Copyright => Copyright EULA's
CC:Share-Alike => GPL, EUPL, etc.
Public Domain => LGPL, etc.

As I see it (and maybe Creative Commons sees it...?), Public Domain, and not GPL, is the extreme opposite of Copyright. With that in mind, my order of preference is from most-free to least-free:

1. Public Domain, LGPL, etc.
2. GPL, EUPL, etc.
3. Copyright, Windows Vista License, etc.

Addition:

I also just read a descriptive scenario whereby new CCPLv3-SA licenses are incapable of ENFORCING their copyleft doctrine down the chain of recipients.

See, if I was Sam, I would just put work A into public domain and stop worrying about it. And if first recipient, Dave, wraps it in TPM, creating d[A], then that's Dave's work now. 2nd-recipient Bob may like d[A] more, but it's up to Dave to give him permission to modify d[A]. Bob can always come get A from me with no strings attached.

closing [loopholes|business models] in OS licenses

I started out by reading Matt Asay's take on the EUPL. And I read just about every article or post to which he linked. Asay says that the GPL, for better or worse, "leaks like a sieve." I can only conclude from his statement, "I really like the way it [EUPL] closes the ASP loophole without closing off everything else, as well" that Matt dislikes at least the ASP "loophole" in the GPL.

(Disclosure: As an employee of SourceForge.net, I am dependent on an ASP model, like Google's or Yahoo's, for my livelihood.)

But I'd fall into the camp which thinks the "leakiness" of the GPL is a positive rather than a negative. In fact, I think even the GPLv2 is a bit too strict for my liking. As I understand it, when you distribute (old-school) any software which you received under a GPLv2 license, you must license your own modifications under GPLv2. Emphasis added to stress this point - any mechanism that sets up a "you must _____" condition places an inhibition on the recipient, not a freedom.

Apparently, the HPL, EUPL, and GPLv3 take this same inhibition and make it even more invasive. Under these, when you "communicate" (new-school) any software which you received, you must license all of your own modifications under the same license. The "communicate" term is defined in every license (or an equivalent principle is established) to prevent a person or corporation from using such licensed software to distrubte services (SaaS) without releasing all their own modifications or enhancements to the software.

I'm fine with these kinds of licenses, I suppose. I just don't happen to share this kind of perspective - feeling betrayed or cheated if someone enhances my software but doesn't give their stuff back to me. IMO, their work and labor went into those enhancements so I'm fine with them licensing their stuff however they want. I rest easy knowing my stuff will always be LGPL and (theoretically) usable by anyone. I'll admit this a pretty individualistic perspective. But then isn't the open-source community just made up of individuals. Why do we need someone like the EU or FSF to tell us how to feel, or what's best for ourselves?

I think the majority of people in the open-source community don't mind that Google and Yahoo (and SourceForge) modify some open-source software but don't distribute all those modifications when they "communicate" that software via their SaaS websites. Combine that with the fact that some of these extra-invasively-viral(?) licenses prevent other business models besides just the ASP one, and I can't imagine these licenses will be very popular. (Indeed, GPLv3 has already been ranted upon by more than a couple open-source supporters.)

open source revenue

I ended up reading this post because it talked about SourceForge (albeit the Enterprise software).

First, I don't agree that "serious" numbers are "multi-billion dollar" numbers. For one thing, of the 120k active information industry corporations which filed tax returns in 2002, only 264 of them received $0.25 billion or more in that year. (source) Personally, I can only think of 5 software giants which actually break into billions in terms of annual revenue - Microsoft, Oracle, SAP, Electronic Arts, BEA. There are probably some others but I'd be willing to bet it's no more than a dozen or maybe two dozen.

So one point I would make is that software revenue doesn't have to be concentrated in order to be serious. After all, the 119,476 information corporations that make <$50 million per year (under which VA Software falls) can account for, very roughly, $188 billion of annual revenue.

The second point I would make is that the nature of open-source is such that its value is hard to quantify with $. Different people may value an open-source software package at $1 or at $200 or at $2,000. But they all pay $0 for it, so it's hard to measure the value, but it's obviously not 0. I realize this has nothing to do with revenue, but recognition of this fact is a prerequisite to building a good open-source business model, which has everything to do with revenue.

Finally, one goal of open-source is to lower the cost of software to users. In principle then, open-source companies shouldn't be as big as proprietary software counterparts. The goal of open-source is to grow the economic pie while at the same time requiring a smaller slice for the software industry. This is directly opposite to proprietary software which desires more and more money to pour into the software industry - whether or not the economic pie is growing at all.

Basically, revenue-focused analysis is not simple in the open-source world.

(some) economics of open-source

Either fittingly or surprisingly, I came across a great blurb re: economics of open-source while reading The Long Tail.

George Gilder:

In every industrial revolution, some key factor of production is drastically reduced in cost. Relative to the previous cost to achieve that function, the new factor is virtually free. Physical force in the industrial revolution became virtually free compared to its expense when it derived from animal muscle power and human muscle power. Suddenly you could do things you could not afford to do before. You could make a factory work 24 hours a day churning out products in a way that was just incomprehensible before the industrial era. ... The whole economy had to reorganize itself to exploit this physical force. You had to "waste" the power of the steam engine and its derivatives in order to prevail...

From there, Chris picks up:

That suggests a way to put this in an economic context. If the abundant resources are just one factor in a system otherwise constrained by scarcity, they may not challenge the economic orthodoxy. They are then like learning curves and minimized transaction costs - drivers of production efficiency that serve to lower prices and increase productivity but do not invalidate the laws of economics.

So, how about open-source?

The open-source "revolution" has, among other things, made a factor of production virtually free - software programs. It costs someone somewhere maybe $0.000001 to produce another copy of ajaxMyTop and send it to another user. But, Information Technology and Information Systems (effective ones) involve more than just software programs. Open-source does not invalidate the laws of economics in IT.

In light of this, there are 2 very different lessons to take away.

For those who think open-source is economically infeasible, the analogy demonstrates that thriving markets can and do operate on virtually free goods. It merely takes some learning to understand where and how to charge money.

For those who think open-source is just a first sign of an inevitable economic reversals, the analogy shows that economic principles continue to hold. It is rather market actors and their perceptions which are upheaved.

MST3K is back!

One thing superior about this approach is that Mike can do any movie he wants to since he's not re-distributing any copyrighted material. It actually works pretty well. I set the laptop on the coffee table, start the DVD, and then start the mp3 when Mike says so. What a great mash-up.

Camino is fired. Firefox is re-hired.

Okay, while I admit it's very cool to browse the web with a native Mac-style interface, I can never go back to using a browser without plugins. I mean, even IE7 supports add-ons. Camino is the kind of project that only an Apple myrmidon would (or can!) love. There's absolutely NO way to justify tossing plugin architecture out of a product just so you can get the spiffy razzle-dazzle of Mac OS X inside your browser.

So while I'm easily an Apple convert (I have bluetooth'd an Apple logo over to my Razr to serve as my mobile wallpaper), I'm not a zealot.

P.S. I'm not sure why I don't use Safari.

Technorati?

I must be the last blogger on earth to register at Technorati...but here it goes anyway.

Technorati Profile

Ghost in the shell | Free Software Magazine

Ghost in the shell | Free Software Magazine: "

For centuries we have relied on books and other external memories, but the Internet, through the ease of searching, has invaded our actual thought processes. There are things I think I know, but I don't. What I know is how to instantly retrieve them when my global external memory is attached. As I become reliant on this kind of extended identity, losing my Internet connection is like a lobotomy�I feel an almost physical sense of loss as a portion of my intelligence is removed. I've become dependent on a new brain center that isn't located inside of my body.

"

I'll admit I was just surfing around looking for something to blog when I came along this. It really struck a chord with me. I'm an internet-addicted cyberpunk. And I'm a huge fan of Ghost in the Shell, and I recently read Synthetic Worlds by Edward Castranova.

I think it's obvious that our online identities are inextricably linked with our physical identities. But not just because our physical selves use physical interfaces to act as our virtual counterpart. Like Terry points out, when we use an interface so much, the boundaries between self, interface, and "avatar" start to blur. Sometimes even so much so that the online avatar feels more real than we ourselves feel at times.

In any case, this was also a test of a nifty firefox extension I came across for blogging. I'll be testing a couple of these soon so there might be a few more random posts in the future.

Software Engineer, SourceForge.net

I have accepted a job offer from SourceForge.net. I'm thrilled to death. This is basically my dream job. I won't say anything else beyond that until I get with them re: blogging etiquette. Hopefully I'll blog a little more frequently since I'll have cooler activities to blog about.

GoogleForge ?

http://code.google.com/p/ajaxmytop/

Couple first impressions:

Easy and simple to set up and get going.
Clean, simple, easy interface for creating issues.
Project blog is nice. (Edit: but apparently broken?)
No support for file-releases other than Subversion?
No ability to upload screenshots?

I'll be playing with it some more to try it out.

read more | digg story

ajaxmytop

I've been trying to work more on ajaxMyTop recently to smoothe some of my nervousness and anxiety from the last few weeks (source of which I'll reveal soon).

It's pretty nice to get back into it, but it's always frustrating when you're trying to improve something that already works, because you end up breaking it before improving it. I'm trying to move the filtering to occur before sorting so that the sorting process has fewer records to sort. But now I've broken the filtering and can't quite figure out why. I need a better way to debug the PHP side of things in Eclipse...

That is all.

HOWTO: Debug Javascript in IE

Posted this to digg. I'm having an IE-only javascript problem and I found this useful for debugging purposes.

It's fairly laughable, though expected, that you have to have an upgraded version of Office to get a pretty basic tool.

read more | digg story

javascript woes

I've been complaining about some javascript stuff lately. Specifically, the way javascript drops "this" variable scope when making asynchronous (XMLHttpRequest) calls, and apparently also when using setTimeout() or setInterval() functions. Even though nobody reads this blog, they might stumble upon it when searching and hopefully in the future, these links will point to possible solution(s).

SUSE Linux Enterprise Desktop 10

Novell has released SUSE Linux Enterprise Desktop 10. I'm going to try this out very soon because I think Novell & SUSE are doing very well w/r/t usability and user-experience. In that respect, they're emulating Apple's approaches and designs, which r4wk.

It features integrated search via Beagle, and a 3d-accelerated desktop environment via Xgl. Only downside is that SUSE is always pretty large (5 CD's!), so it always takes me a long time to get a version downloaded and burned. I really need to get a DVD-burner.

read more | digg story

Dear Google, I need an iMac

After writing a blog post titled �Dear Google, You�re Giving Me a Headache�, Google sent the author a small pack of acetaminophen, with a message saying "I hope this helps you keep up with the many Adwords changes."

I think an iMac would really contribute to my Google experiences. My wife is looking to start a photography business and I'd like to see if I can experimenting with iPhoto + Picasa to make a website where she can sell photos.

Or something.

read more | digg story

ClickTale

It's a closed beta, but it LOOKS like a pretty sweet product/service. And a good excuse to re-test the integration of my digg account with my blogger account.

read more | digg story