Wednesday, January 31, 2007

Paradigm Shift: Open-source and the Market Revolution


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by James Matthew Miraflor

"
Known also as the “Bazaar” paradigm of software development, the FLOSS operates under the economics of increased competition and participative development, in contrast with the “Cathedral” paradigm employed by most software development companies in the market which seeks to monopolize software production and maintenance through consolidated capital. Instead of concentrating resources in order to improve its product, FLOSS flattens the hierarchy and allows a greater number of channels by which the product can be improved.

This paradigm is actually based on a new model of economic production – the commons-based peer production. Coined by Professor Yochai Benkler in his seminal paper Coase’s Penguin, the model is different from the conventional industrial production model since the creative potential of large number of people is coordinated into large and meaningful projects without traditional hierarchical organization or financial compensation."



First posted online on: 2007.01.30


FLOSS, which stands for Free/Libre (libre being the Spanish word for free) and Open-Source Software had been a corporate buzzword for some time now, commonly circulating on MIS departments both of companies with large-scale legacy information systems in place and startups wanting their hands on a new technology to drive their business model.

Such hype is only expected. In an era where Information Technology (IT) is defines the dynamics of the business sector, specifically on how corporations operate, the appearance of a new paradigm that promises to liberate individuals and companies from the back-breaking cost of obtaining, using and developing software is something that no individual or company can afford to ignore.

The FLOSS paradigm is indeed ground-breaking, to say the least. Whether it will successfully transform the entire IT sector or stopped by big property-conscious corporations depends on the response it elicits from the market, specifically on how much users understand the paradigm and how much they are capable in realizing its potential.

FLOSS clarified
FLOSS had been misconstrued by many novice users (and even by veteran programmers who are not so in-touch with new trends) to mean as software that can be procured and used for free. This misconception may have been because that most FLOSS can be downloaded straight from the internet and can be redistributed without any payment or fee. FLOSS, however, cannot always be obtained gratis.

The word free in FLOSS means a totally different thing. Consider the difference between free food and free speech. While free food can logically be obtained at zero cost, exercising one’s freedom of speech will more likely than not entail expenditures in the process. The word free thus refers to the freedom with regards how software can be used rather than the price of the software.

In fact, some software are categorized as FLOSS even when it comes with a tag price. There are even companies that thrive in collecting, reproducing and selling FLOSS, as there is nothing in the definition of FLOSS that prohibits any person from selling it. To be specific, only four things are required for particular software to be categorized as FLOSS. Usually called as the four freedoms, these are:

• Freedom zero (computer geeks usually start with zero when enumerating things) – Users should be able to run the software for any purpose.• Freedom one – Users should be able to closely examine and study the software and should be able to freely modify and improve it to suit their needs better.
• Freedom two – Users should be able to distribute copies of the software to other people for whom the software will be useful, either gratis or for a fee.
• Freedom three – Users should be able to improve the software and freely distribute their improvements to the broader public so that they, as a whole, benefit.

Note that access to the source code should be made available for freedoms one and three to be realized, thus the term open source.

So what’s so free about FLOSS if it can come for a price anyway? The thing is, most software available in the market today do not even have one of these four freedoms. Usually stated in the EULA (End User License Agreement), prohibitions with regards to the seeing and modifying the source code, recompiling the software, and distributing copies of the software (thus the term copyright – only the original or licensed distributors have the right to make copies of the software).

Microsoft Windows, for example, is proprietary software. This means that not only Microsoft Windows operating system comes with a price, the license agreement prohibits users from installing it from other machines unless stated (and even so, still with strict limitations) and from modifying and recompiling the source code (which is not available for public viewing in the first place). This is the reason why the rumored public leak of the source code of Microsoft Windows Vista, codenamed Longhorn, caused an alarm to the management of Microsoft.

However, even some software that can be acquired for free (i.e. without a price) is excluded from the FLOSS definition. Freeware (which permits access, redistributing but not modification since the source code is not available) and Shareware (which permits access and redistribution, but requires a fee for continued usage), while can be downloaded for free are not free software.

FLOSS-conomics
Known also as the “Bazaar” paradigm of software development, the FLOSS operates under the economics of increased competition and participative development, in contrast with the “Cathedral” paradigm employed by most software development companies in the market which seeks to monopolize software production and maintenance through consolidated capital. Instead of concentrating resources in order to improve its product, FLOSS flattens the hierarchy and allows a greater number of channels by which the product can be improved.

This paradigm is actually based on a new model of economic production – the commons-based peer production. Coined by Professor Yochai Benkler in his seminal paper Coase’s Penguin, the model is different from the conventional industrial production model since the creative potential of large number of people is coordinated into large and meaningful projects without traditional hierarchical organization or financial compensation.

Under the open-source paradigm, not only are end users given choice on which software to use (which is actually what the market environment affords them), they are also empowered to participate in the development of the products available in the market. This facilitates what Alvin Toffler had predicted as the fusion of the consumer and producer into a prosumer – a consumer contributing to the production of goods and services.

Because FLOSS allows individuals to tinker with and thus improve a particular software engineering product given its source code, the development curve is much faster than with software that had been designed and maintained by a tightly-knit technical group under the payroll of a company.

Moreover, FLOSS revolutionizes how people perceive the business model of a software development company. In the status quo, most prospective software entrepreneurs look up to the Microsoft business model as the best model of software development. However, the Microsoft model (which had characterized by its vendor-centric paradigm) only accounts for the minority (pegged at only around 30%) of software built and sold into the market.

Most software is not actually sold per se, rather they are developed directly for a specific customer, making the software development industry more of a service rather than a product industry. The speed and the reduction of cost of developing the software technology afforded by the FLOSS paradigm thus translates directly into benefits for industries engaging in the production of private and customized software – popularly known as the “solutions” industries.

The impact thus, of the open-source paradigm used by FLOSS, is measured by the way it affects the enabling technology of businesses. If Microsoft and early software companies revolutionized the business industry by introducing automated transaction through software, the enabling technology that made business operations more efficient and effective, FLOSS promises a revolution equal or more comprehensive in effect – this time through improving the system by which the enabling technology is produced and developed.

Market reluctance
While FLOSS opens a wide range of opportunities for the business world, there are some disadvantages perceived by end users with regards to this new trend. As with any new “product” in the market, FLOSS suffers from a biased market perception tracing to the lack of understanding of both end-users and corporations.

Since the development of an open-source software is based on the effort of the developer community rather than of a corporate entity, some users perceive a lack of accountability on part of the developers. For closed-source software, users can usually invoke their warranties, demand protection, tech support, and recompense from software vendors should software not work as expected, which is something they think they cannot do if the software is developed by the public.

Contrary to popular opinion, however, OSS vendors (as it had been stated a while ago, there are companies that thrive with the reproduction and distribution of FLOSS) do have a separate service offering warranties, or include in their commercial licenses warranties, in order to protect their customers. Moreover, developer communities usually offer free or low-cost technical support through legally established non-profit foundations, funded mostly by corporations that use the software itself.

Another argument against the use of FLOSS is that it is less user-friendly than its proprietary counterparts. Usually hurled against the Linux-based operating systems, there had been an accusation that open-source software tends to become cryptic and hard to understand as they have been developed by programmers for programmers.

The consumer reluctance may be a big problem for the eventual acceptance of FLOSS in the market, but the greater threat comes from the corporations themselves. This is because corporations are more sensitive to the issue of Intellectual Property Rights (IPR), especially since the cost of IPR infringement is very prohibitive on their part.

The problem had been because of patent filing for certain algorithms and source codes, illustrated by the patenting of the LZW data compression algorithm used in producing GIF (Graphic Interchange Format) files by Unisys. As a result, every software developer, including those who develop FLOSS, can be sued if they developed software that produces true compressed .gif image files.

This had been a matter of debate between FLOSS activists and IPR advocates, especially on the issue on whether to include source code (which is not a tangible object) in the IPR or not. Some developers argued that a source code is not an executable device (which can be patented) but rather a mere description of how a device executes – that is why those source codes available for public access should not be considered as a property in itself.

The discourses to resolve this dilemma still continue, and are expected to heat up as the open-source paradigm goes beyond the IT sector to spread its impact to other critical industries.

Contagion

The influence of the open-source movement is not only limited in the IT sector. In fact, because of the way it had revolutionized the IT industry, more and more industries are following suit – revolutionizing the formerly closely-guarded property-based Research and Development (R&D) methodology into one which is open and community-based.

Open Cola is an idea inspired by the open-source movement in the IT sector. Meant as an answer to giant soft drinks company like Coca Cola and Pepsi which refuses to release to the public their formula of making carbonated beverages, Open Cola’s recipe that had been developed by several volunteers is open for the public to view. It is claimed that there is no difference with regards to the taste of existing commercial soft drinks.

Aside from pharmaceutical and biomedical products, the impact of the open-source movement can be felt in many industries, even in the most obscure of fields. A California-based nonprofit corporation known as the OSYU (Open-source Yoga Unity) aims to resist the enforcement of copyright protection for any Yoga style, which they find as prohibitive for people who might have wanted to engage in certain Yoga style but had not been given license to.

The importance of the open-source paradigm thus lies on its potential to improve the services and products already offered in the market by changing the method by which these services and products are produced and developed, and on its ability to transforms consumer’s freedom to choose into an actual and proactive ability to create.

References:

Manalastas, Pablo. Free and Open Source Software: Origins, Benefits, Myths and Realities.
Perens, Bruce. The Emerging Economic Paradigm of Open Source.
Free Software Foundation (FSF), Inc. Philosophy of the GNU Project.
Toffler, Alvin. The Third Wave.
Wikipedia, the free encyclopedia
Various online newsletters and articles

1 comment:

silverfork said...

Indeed, the IT industry is becoming more a service industry more than a product industry. This just highlights that big boost in the industry's productivity. Down with monopolies!!!