Open Source Licensing, Value Configuration and Key Activities

How open source licensing’s decisions are taken depend on legal issues, business strategies and costs structure.

IP lawyers as well as specialized firms are probably happy to help with the first ones, but let’s talk about the implications in the area of Value Configuration and Key activities looking at some real cases (Day Software, MySQL).

Day Software few days ago released the latest version of CQ5, its flagship product. CQ5 is proprietary software built atop of Apache components. David Nuescheler, Day’s CTO, told me:

In terms of a rough estimate I would say that in the infrastructure the percentage of open source used it is probably around 90% of the code, and on the application side it is probably a bit lower, in the 60% range including libraries and other commodity code.

The majority of the code that we ship comes from open source, the apache software foundation more specifically. Some of those projects are key to our products and as the major differentiator we are amongst the main drivers and contributors for these projects at the apache software foundation.

Why should we talk about Day Software? Actually they don’t pretend to be an open source vendor, but they do contribute a lot, both in terms of code and open standards definition and support. Simon Phipps‘s score card would probably penalize them, but the problem here is that the score card is – quite wrongly in my view – about products instead of projects. Checking out Day’s contributions to open source projects on Ohloh gives a clear picture of why talking of Day makes sense in this context.

Day has (unique) value proposition: a CMS/ECM/WCM platform enabling the “everything is content” vision. Key activities to deliver such value proposition include participation to more than 25 different open source projects (not products!) and to some body standards (CMIS and others).

MySQL is now part of Oracle’s strategy, but for a long time MySQL has been at the center of a European discussion around GPL suitability or unsuitability for economic reasons. While I guested opinions of both opponents, at that time I refrained for making comments. Sonatype’s explanation about going GPL is of great help to understand why companies go GPL, and it reflects a clear view about both value configuration and impacts on key activities.

MySQL takes advantage of being the only vendor that could double-license and go open-core. Even if double-licensing wasn’t and probably won’t be the only source of revenues, is an important one and it would be foul to stop monetizing it (Update 23-02-2010: MÃ¥rten just told me that is not so important anymore). So said, MySQL never took the chance to reduce maintenance costs (Key activities) by strongly involving an external community.

MÃ¥rten Mickos talking about the MySQL ecosystem wrote me:

What few commentators are saying (or realizing) is that the MySQL ecosystem is massive and continues to grow. The economic size of that ecosystem should probably be measured in billions.

Given such a strong ecosystem, I keep thinking that a foundation may well find its way to maintain it independently. Monty himself suggests CTOs to put some development resources in open source projects. Looking at how would cost to create MySQL from scratch it seems like if – just in case – it would be possible to collectively take care of it.

Info-products and funnel-marketing might help, peraphs.

Glossary Note: Value Configuration and Key Activities are 2 of the 9 building block of a business model as described by Alex OsterWalder.

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