Open Source Research Opinion: Industry Decision Models

We will be participating in the Computing Community Consortium’s workshop on the future of open source research at UC Irvine. The organizers asked participants to provide opinions on three research areas that warrant further attention. Here is our third one:

3. Decision Models for Industry Participation in Community Open Source

Community open source is open source software that is owned by a community of stakeholders, sometimes through a proxy like a non-profit foundation. Today, neither software development nor software user firms have decision models that help them decide whether and to what extent to get engaged with such projects. What is the return on investment for SAP to participate in the Apache Software Foundation? For Bank of America to support the Eclipse Foundation? Without proper decision models and economic reasoning, software user and developer firms are likely to remain more cautious than necessary and end up underinvesting.

Thus, the proposed research is to develop economic models that aid industry decision makers when making investment decisions for their software infrastructure and projects. A recent paper outlines some of the economic benefits that software developer and user firms can expect when investing in community open source like reduced development costs, increased sales of complementary products, and a larger addressable market [DR1]. Some of these benefits can be addressed in an analytically closed form and, from an economists perspective, may be “mere applications” of established theory. Other benefits, like how positional advantages gained in a foundation can be translated into increased revenues, may only open to simulation and related approaches.

The main challenge in this research is the complexity of modeling the real world and the need to combine deep understanding of technology and software with economics expertise, commonly not found in one person. Thus, it can only addressed by teamwork between computer scientists and economists. A second challenge is to make it usable for practitioners, which requires both relevance of the research to the real world as well as ease of use of the models.

[DR1] Dirk Riehle. “The Economic Case for Open Source Foundations.” IEEE Computer, January 2010. Page 86-90.