Marketing, Organization, and Financing

Unlike other companies that have a focused manner of development, the open source is less clear-cut. There are mature open source products that perform product marketing, but most of them have no global planning authority. This is justified by the fact that open source is not a business, but an entire business, which moulds to the market itself. The product marketing for the global open source community operates in the way a capitalist nation operates its economy, rather than the way a company plans its products.

Networks of programmers can be formed via the Internet. They can create large and complex software products, and the team increases progressively according to the phase of the development. Software is extremely modular by nature, and thus many people can work on different segments of the software, almost autonomously, if they agree how to share tasks. A good example would be the Debian GNU/Linux Distribution. This system includes more than 16,000 software packages maintained by over 1,000 volunteer developers worldwide.

Open source is funded directly or indirectly as a cost-centre item by the companies that need it. This software is developed in order to use it for other activities, which are the ones that bring profit to the business, so the cost of development is less important than the future use of the software. Such contributors are willing to invest in this kind of project because it allows them to spend less on their cost centers by distributing the cost and risk among many collaborators.

The Open Source Paradigm II

The customers for a particular open source product generally identify themselves: they search for the product in a directory of open source software, and then they download and test the software. If tests are successful, they deploy it. Thus they gain a continuing interest in the product. At that point if they desire additional features to the product, they have an incentive to become co-developers of the software they are using.

The companies that join open source collaborations are seeking to use the software in a non-differentiating, cost-center role. Their profit-centers are things other than software, and software is for them an enabling technology. In order to continue to operate their profit-centers, they must make some investment in their cost centers. In the case of differentiating software, they have little choice but to make use of the in-house or contract development paradigm, because they need to prevent their differentiators from falling into the hands of their competitors. For their non-differentiators, they have the choice of the retail or open source paradigms.

Creative and Innovative Management - part 1

Business is one of the most creative activities ever. It creates ideas. Both creativity and business can go together, they are not mutually destructive as the majority believes. The economics of creativity deals with two system values. One concerns the physical products, which are tangible. The other is based on intellectual property, which is intangible. Managing creativity involves knowing when to exploit ideas and then when to assert intellectual property rights.

Despite the fact that business is meant to make a profit, free-riding, which means benefiting from another person’s ideas without paying, occurs. Free riding can be seen as a cost for the creative economy. Some of the most self-explanatory costs of creative economy are broadly described in the second last part of this paper. People use free-riding to enhance their own knowledge and skills. From a supplier’s point of view, free-riding shortens technological and product life cycles. Being first to market is a major advantage but an innovator has only a short time to establish a new product before others begin to compete. But, in order for some people to benefit, others must go without. Debate has gone on about this exchange. Some economists argue that any constraint on idea hampers creativity slows down economic development; others consider that monopoly is necessary to reward innovation and to better allocate resources.