The Minciu Sodas laboratory

FAQ: Creating an economy for working openly

Markets for Open Source Software

Here's a summary of what I've learned about six markets for open source software. They were all dreamed up in 1998/1999. Surprisingly, each of them resulted in the same number (about 20) of renumerated projects. It's interesting that they are all quite different in spirit, and that each focused on a different product size.

Free Software Bazaar

http://visar.csustan.edu/bazaar/ (use: http://www.archive.org )

Math professor Axel Boldt established the Free Software Bazaar in 1998 because he believed that it was better to directly induce open source software creators rather than pay middlemen like Red Hat. His Bazaar worked on the bounty system, with offers made on the honor system, and payment given for the first solution. A few dozen projects were completed, mostly for about $50, one for $1,000. Developers found ideas for truly needed projects, and users gave back to their community. "The Software Bazaar kind of died - I lost my web access and was too lazy to organize something new." "It wasn't that much work: I maintained the site by hand and spent maybe a couple of hours per week on it."

CoSource

http://www.cosource.com (use: http://www.archive.org )

Bernie Thompson and Norm Jacobowitz founded CoSource, "a collaborative reverse-auction site for funding open source development". They encouraged software users to pool contributions to sponsor the creation of drivers, for example. They received a lot of good publicity from the open source community press. In the first six months there were 14 projects completed, with the largest for only $1,300. They relied heavily on a developer in Russia. In December, 1999, Bernie Thompson was able to sell his company for an undisclosed amount to Applix, and Cosource drifted into its product support center SmartBeak, closing its doors around August, 2001. Bernie Thompson was put in charge of Applix's Linux division, which at that time had about $1.5 million dollars in revenues. Within six months Applix had spun off that division, with Bernie Thompson in charge, into a separate company with $6 million dollars in backing. And a year later that company was sold, and changed direction again, for many millions more.

Open Avenue

http://www.openavenue.com (use: http://www.archive.org )

Open Avenue received $4.6 million investment in December, 1999. It had 60 small and medium sized projects that it was ready to find workers for. At first, Open Avenue intended to distinguish itself by embracing programmers using Microsoft's Visual Basic and Borland's Delphi: "We will bring more mainstream developers into open source by lowering the barrier of entry, allowing developers to work in projects with their tools and platforms of choice." But Open Avenue had trouble winning acceptance from fans of open source. A year later, it focused on making the open source model available as a development option for enterprises. It offered to organize "gated" communities that would respect the need of enterprises to protect information. Open Avenue sold web portal software for such collaborative communities. It closed in 2001, unable to raise a second round of funding.

SourceXchange

http://www.sourceXchange.com (use: http://www.archive.org )

SourceXchange was the brainchild of Hewlett-Packard's corporate IT department, which wanted to shield contractors from the complexities of its contracting process. They wanted to outsource all projects that didn't need to be part of HP's intellectual property. They wanted access to great talent, and a time-to-market advantage, but they needed a predictable market. HP wanted their competitors to be able to participate as well. HP approached O'Reilly Associates, offering some
funding as well as dozens of projects in the $5,000 - $40,000, six man week to four man month range. Brian Behlendorf to lead CollabNet as an subsidiary. CollabNet launched SourceXchange in the summer of 1999, but it closed in March, 2001 due to lack of volume, with only 11 completed projects. Perhaps SourceXchange was overshadowed by CollabNet's portal
for collaboration. CollabNet's portal was itself open source, in contrast to that of its competitor SourceForge. A key reason might be that CollabNet's portal was cobbled together, whereas SourceForge's was cut from whole cloth. CollabNet hosts specialized developer communities sponsored by Motorola, Hewlett-Packard, Sun Microsystems, Oracle, etc.

Asynchrony

http://www.asynchrony.com Steve Elfanbaum got the idea for Asynhcrony from an October 1998 article on "e-lancing" in Harvard Business Review while flying home from Europe. He and his brothers Bob and Dave have backgrounds in finance. They founded Asynchrony in May, 1999 along with CTO Nate McKie. Concurrently, they founded Asynchrony Solutions, an enterprise service company. Asynchrony supports those who have ideas but need help implementing them. They are encouraged to build self-directed teams where people share an interest in making money. A project creator offers percentage shares of future earnings to those who help in any way, such as program, document or debug. Asynchrony sells the completed product as shareware, receiving 10% for noncertified projects, 25% for projects it certifies, and an additional 10% if participants desire marketing assistance. Nate McKie notes in a white paper in February, 2000 that participants may upon creation specify their projects as open source (such as GPL). In practice, there is a high wall of confidentiality that requires, upon registering at the website, the waiver of all moral rights of authorship, and the transfer to Asynchrony of all code, ideas, trademarks, works of authorship (which they presumably are then free to place them under the appropriate open source license, or keep them proprietary, as agreed). This is to document and mediate any member disputes. The first product was released in October 2000. 19 projects have been completed. Marketing efforts focus on NewzTop and PDA Defense. Asynchrony encouraged corporations to act as project creators for work they want to outsource. It has described itself as a developer training ground, having a job posting board, and presumably finding developers for its own needs at Asynchrony Solutions, where it seems to have focused its efforts.

Software Carpentry

http://sc-archive.codesourcery.com/

CodeSourcery organized contests in 2000-2001 on behalf of the Los Alamos National Laboratory's Advanced Computing Laboratory to design and build in Python new versions (SC Config, SC Build, SC Test, SC Track) of four classic open source software tools. $860,000 was budgeted for this experiment in finding ways to work together with the open source community. In the design competition, 16 prizes of $2,500 were awarded in the first round, and 12 prizes of $2,500 and 4 prizes of $7,500 in the second round. There were distinguished panels of judges. $200,000 was set aside for implementation, not necessarily by the winners.