Open source maturity

curve and ecosystems

Tony Bailetti

Systems and Computer Engineering and

Sprott School of Business

Bailetti@sce.carleton.ca

Eclipse Summit

October 29, 2009

22

1. Motivation

• Increase value from engaging with open source

projects and vendor-neutral business ecosystems

• Use ecosystems to solve very different problems

• Reduce cost and increase speed and flexibility of high

diversity, multi-player collaboration

33

Agenda

1. Value from open source

2. Business ecosystem components

3. Use ecosystems to create and retain tech jobs

4. Takeaways

44

2. Value from engaging with OS project

1. Use &

promote

EffortEngineering Business

Value for

company

2. Extend

what exists

3. Build new

4. Co-create

5. Redefine

0. DenyHow company chooses to interact with OS projects

determines value it can extract

55

Market

Products

Business

Authority and effort increase with levels

Level 4

Co-create

Level 1

Use & promote

66

Effort

Value for

company

2. More features, better quality

3. More new applications, greater

project participation & leadership

4. Greater commitment to

healthy ecosystem

5. More ecosystem

links & resources

Value to community

1. No change in code, more users & awareness

77

Engagement of 163 Eclipse members

10

12

22

• 67% do not Co-create

6

31

28

0

0

• 65 operate at just one level, 98 operate combinations

• None just Co-creates or Redefines

• 4% just Use & promote

16

• 10% operate in first four levels

13 14

2

• 18% Co-create and do one

other level

9

• 5% Co-create, Extend what is,

Build new

88

Effort

Value for

company

2. Add features to existing applications

3. Create & drive adoption of new

applications that use Eclipse platform

4. Concurrently advance

multiple projects & integrate

5. ???

Perspectives about Eclipse

1. Use to develop or as part of deployment stack

99

2. Business ecosystem’s 5 key components

5. Ecosystem health• Diversity

•Productivity

•Commitment

•Predictability

3. Customers pay for market

offers that rely on base element

$Customer

Mk

offer

Company N

$Customer

Mk

offer

Company 2

$Customer

Mk

offer

Company 1

...

...

Companies & individuals use an out-of-the-box platform

(assets, processes, norms) to create and deliver value to

customers, partners, themselves, and community

Out of box

platform

1. Keystone

Services

Base element

Governance

IP regime

2. Niches collaborate

to develop base

element

XZX ZXYZ

4. Member types

1010

Notes

• Ecosystem is more than a development communityMoney + governance + IPR, not just development

Rewards performance of multi-organization collaboration, not developer collaboration

Scale depends on member size and diversity, not just number of talented developers

• Ecosystem types

Defense

departments

Eclipse

Linux

• Base element:

software, hardware

design, process,

content, scientific

knowledge

1111

Keystone’s main responsibilities

• Out of box rules to collaborate and compete

Platform for which

keystone is

responsible

Build competitive differentiators for

which customers are willing to pay

Work with others to produce base

elements

Compete:

Collaborate:

• Attracts talented volunteers to collaborate

• Recruits members

• Develops and fosters adoption of base elements

• Provides governance and IP regime

• Delivers services to ecosystem members

• Maintains ecosystem healthy

Base element

1212

Benefits of business ecosystems

Small and medium size businesses

• Access to deal flows and opportunity fulfillment

• Customer pull for rapid innovation

• Share business development and R&D costs

• Fast and favorable access to sophisticated capabilities worldwide

• No lock-in by powerful companies

• Lower cost of entering markets in which they can’t operate today

• High quality mentoring

Governments

• Attract and retain knowledge jobs, innovative companies and private investment

• Attract significant resources to focus on government priorities

• More resilient to external shocks and economic downturns

• Create systemic change required to move to new economy

• Shape what exists into a system that produces outcomes with high impact

• Higher return on government investment with less risk

• Common process across sectors

1313

3. Problem in Canada’s Capital Region

• Tech-sector employment from 72,400 in May 2000 to

53,100 in August 2009 (~30% drop)

• Lost 8,600 jobs over past 12 months

• Venture capital investment from $1.3 billion in 2000

(74 deals) to less than $24 million in 2009 (1 deal)

• Fallout from Nortel’s bankruptcy

• No large company expects to create jobs

• All three levels of government unprepared to deal

with tech meltdown in region

• 1,800 tech start-ups, small number of mid size, 1 IPO

in last 20 years

• Families and community hurt

1414

?Net

Auto Pervasive

Media Mobile

AppsVE

Response: Ecosystems

Lead to Win Coral

CEA

Talent First

Network

# of technology jobs created

$ risk capital invested

# of students educated for creative economy

Each vertical ecosystem to operate

multi million $ specialized asset

• Building blocks

• Services:

• Co-creating using sandbox

• Lead projects

• Knowledge and dissemination

• Business development

• Commercialization

• 4 phase process

• Each company in

phase III creates 6+

tech jobs

• Talent

• Open source

stacks

• OSBR.ca

$37 M

$2 M

$400 k

1515

Overview of three ecosystems

Mandate Base

element

Success Scope

Lead to Win Launch and grow

technology

businesses

• Wealth

creation

process

• # tech jobs

• Amount of risk

capital investment

Region

other

regions

Coral CEA

(Communications

Enabled

Applications)

• Provide member

companies

building blocks,

commercialization

support and out

of box process to

differentiate offers

• Fill gaps in

commercialization

• Software

assets in $15.3

M sandbox

• # tech jobs

• Amount of risk

capital investment

# apps that use

Sandbox

• # new CEA

companies

• Keystone income

Canada

Global

Talent First

Network

• Thought

leadership

• Fill gaps in

commercialization

• Open source

stacks

• Knowledge

• # tech jobs

• # companies that

make money from

open source assets

• # grad students

Province

1616

$Customer

Mk

offer

Company 49

$Customer

Mk

offer

Company 2

LTW largest provider of incubation services

Community

centric out of

box platform

1. Keystone2. Niches collaborate to

develop base element

5. Ecosystem health• # of tech jobs

• Amount of private investment

• #, diversity and rate of introduction of market offers

• Keystone’s income

3. Customers pay for market

offers built on top of or

extension to base element

Services

Base element:

• mutants

• opportunities

Governance

42 Associates9 Strategic

4. Member types

$Customer

Mk

offer

Company 1

...

...

66 Founders

25 Contractors

42 Reviewers

14 Faculty

7 Alumni

6 Service providers

5 Recruiters

1717

SME3

European

Customer

x

xx

SME1

x

SME2

x

x

x

Components +

prototype environment

5. Business

development

2. Lead projects

3. Commercial

services

4. Knowledge &

dissemination

1. Sandbox

Whole

product

Keystone

US Orchestrator

SME4

Members

Large

Competitor

Services

New wave of ICT innovation

• Ecosystem provides small company proprietary advantage to compete against large suppliers

• Most benefit to companies that are small with no brand recognition and no money to absorb development and distribution costs

Coral CEA

• $15.3 M Sandbox

• $10.5 M cash

• ? Member fees

1818

Talent, stacks and thought leadership

Innovators• Creative individuals interested in starting and

growing new businesses for the new economy

• Generate revenue for themselves and other

ecosystem members

• Extend value of Ecosystem tools and platform

Lead Customers• Provide requirements

• Validate ideas

• Contribute ideas for improvements

• Become users of new commercial

products

Serial Entrepreneurs• Experienced repeat

entrepreneurs

• Provide advice and guidance

Content suppliers• Create useful information

• Stimulate customer interest

and foster community

Technology

Innovation

Management

Carleton

• Enables commercialization of market offers that rely on open source assets (e.g., SW, HW, process)

Capital Suppliers• Government, venture capital

• Monetize innovators’ new offers

Ontario Talent First Network

1919

4. Takeaways

• Ignore business ecosystems at your peril

• Ecosystems can:

Harness innovative individuals worldwide

Launch and grow technology companies

Create and retain jobs and attract private investment

Enhance experience of graduate students

• Knowing how to establish and enable business ecosystems is a key competitive advantage

2020

References

• Bailetti, Antonio (2009) Business ecosystems: new form of organizing creative individuals worldwide. Carleton University Alumni Conference in Toronto, February 12.

• Bailetti, Antonio (2008) Ecosystem approach to commercialization of technology products and services. TIM Lecture, March 28.

• Carbone, Peter (2007) Value derived from open source is a function of maturity levels. Partnership Conference, April 19.

• Carbone, Peter (2009) Emerging promise of business ecosystems. Open Source Business Resource, February.

• Hurley, Brian (2009) Enabling the creative entrepreneur. Open Source Business Resource, August.

• Lombardi, Stephen (2008) Interaction between Eclipse Foundation members and Eclipse projects. Carleton University thesis, Department of Systems and Computer Engineering.

• Milinkovich, Mike (2008) A practitioner’s guide to ecosystem development. TIM Lecture, September 3.

• Moore, James (2006) Business ecosystems and the view from the firm. The Antitrust Bulletin, Vol 51, No. 1, Spring 31-75.

• Skerrett, Ian (2008) Building technology communities. TIM Lecture, June 4.

2121

Thank you!

www.carleton.ca/tim

www.leadtowin.ca

www.coralcea.net

www.talentfirstnetwork.org/wiki