The heartbleed OpenSSL vulnerability in 2014 (effecting Google, Facebook, etc.) exposed another issue: sometimes widely used open source software doesn’t get the love it deserves in terms of monetary or code support from those that use it.

If you’re using open source software at your company, then this software could be considered in economics terms as a complement* to your company’s product, where its availability, quality, and ecosystem directly bolsters it.

Below, Joel Spolsky writes on how smart companies** in the past have strategized to further their business interests by supporting and proliferating complements to their products, or otherwise “commoditizing their complements” to great results:

More: (gwern.net/Complement)


 814 total views,  7 views today


*In economics, a complementary good is a good whose appeal increases with the popularity of its complement. I.e. complementary goods are often consumed along with each other

Complementary goods exhibit a negative cross elasticity of demand: as the price of goods Y rises, the demand for good X falls.

For example, if you sell peanut butter and the price of jelly goes down, then it’s cheaper for people to make a peanut butter and jelly sandwich. The demand for peanut butter will increase, and you could raise prices.

In this example, we can imagine it would be a peanut butter company’s dream come true if the price of jelly lowered (or even became free).

If you’re using open source software at your company, think of your company’s proprietary product as peanut butter and open source software as jelly. From a strictly financial sense, it may make sense for you to “lower the cost of jelly” by supporting open source software with cash or coders.

By doing so, you can improve the quality and community around the tools you rely on, increase demand, availability, and functionality of your product for a fraction of the overall cost, and you can raise prices and profits in turn.


**In economic terms, open source back-end infrastructure can be considered as a complement to proprietary front-end software product.

Smart companies proliferate complements to their products in order to increase demand.

Therefore, it’s easy to see why so many companies have a vested interest and have banded together to ensure the success of open source software and organizations like the Linux Foundation and the CNCF.

More:

Via Chris Aniszczyk, CTO of the Cloud Native Computing Foundation

The success of open source continues to grow; surveys show that the majority of companies use some form of open source, 99% of enterprises see open source as important, and almost half of developers are contributing back.

It’s important to note that companies aren’t contributing to open source for purely altruistic reasons. Recent research from Harvard shows that open source-contributing companies capture up to 100% more productive value from open source than companies that do not contribute back.

Related:




Krupczak logo

Home