Linköping Studies in Science and Technology Dissertations, No. 1438 Open Source Vendors’ Business Models Thomas Rosenfall April 2012 Department of Management and Engineering Linköpings universitet, SE-581 83 Linköping, Sweden © Thomas Rosenfall, 2012 ”Open Source Vendor’s Business Models” Linköping Studies in Science and Technology, Dissertations, No. 1438 ISBN: 978-91-7519-926-9 ISSN: 0345-7524 Printed by: LiU-Tryck, Linköping Distributed by: Linköping University Department of Management and Engineering SE-581 83 Linköping, Sweden Tel: +46 13 281000 2 Acknowledgements This thesis was a long time in coming. The author is graciously indebted to several individu- als and organizations for their support and contributions during the process. First, the work of my supervisor, Anna Öhrwall Rönnbäck, together with professor Staffan Brege, whom probably are the sole reason for the completion of this thesis. Without their support and advice, the author would have given up years ago. The author would also like to thank the case companies and their representatives that have shown patience over the years, with a special note to the new and former management of Cendio AB. Several other colleagues have been involved in the process and provided much support and insight, for which the author is grateful. A special “thank you” goes to Christina Grundström for the support and advice concerning as assistance supervisor. Additionally, the author gra- ciously would like to thank Mica Comstock for the outstanding proofreading. The research was funded by Lundbergstiftelserna in 2005 - 2008, while the final thesis was conducted as a part of the research project BOSSANOVA, financed by VINNOVA between 2008 and 2011. Finally, the author would like to thank friends and family, in particular Åsa, for support and encouragement that was sorely needed. Please note that the author changed his surname to Rosenfall from Rosén on August 1, 2011. Linköping, 2012 Thomas Rosenfall 3 Table of Contents 1. Introduction ........................................................................................................... 7 1.1. Purpose .......................................................................................................................... 8 1.2. Outline of the Thesis ..................................................................................................... 8 2. Methodology ......................................................................................................... 9 2.1. Research design ............................................................................................................ 9 2.2. Data collection ............................................................................................................. 10 2.3. Quality of the research ............................................................................................... 16 2.4. The role of the researcher .......................................................................................... 17 3. Business models – a background ..................................................................... 21 3.1. Business model categories .......................................................................................... 22 3.2. Strategy and business models .................................................................................... 33 3.3. Discussion .................................................................................................................... 34 4. Open-source software – a background ............................................................ 37 4.1. The computer industry ............................................................................................... 37 4.2. Hardware and software ............................................................................................. 38 4.3. Licenses ........................................................................................................................ 39 4.4. Free software or open-source software ..................................................................... 40 4.5. OSS research streams ................................................................................................. 42 5. OSS business model analysis framework ........................................................ 61 5.1. Business positions ....................................................................................................... 62 5.2. Operational platform ................................................................................................. 66 5.3. The offering ................................................................................................................. 70 5.4. Use of the business model framework ...................................................................... 73 5.5. Business models and OSS .......................................................................................... 75 6. Case 1: Cendio AB ............................................................................................. 77 6.1. Business position ......................................................................................................... 77 6.2. Operational platform ................................................................................................. 83 6.3. Offering ....................................................................................................................... 86 7. Case 2: CodeWeavers, Inc. ................................................................................ 89 7.1. Business position ......................................................................................................... 89 7.2. Operational platform ................................................................................................. 94 7.3. Offering ....................................................................................................................... 96 8. Case 3: MySQL AB ............................................................................................. 99 4 8.1. Business position ......................................................................................................... 99 8.2. Operational platform ............................................................................................... 107 8.3. Offering ..................................................................................................................... 109 9. Case 4: Red Hat Inc. ......................................................................................... 111 9.1. Business position ....................................................................................................... 111 9.2. Operational platform ............................................................................................... 118 9.3. Offering ..................................................................................................................... 120 10. Analysis ........................................................................................................... 123 10.1. Business position analysis ...................................................................................... 123 10.2. Operational platform analysis ............................................................................... 124 10.3. Offering analysis ..................................................................................................... 125 10.4. Cross-case analysis ................................................................................................. 127 10.5. Generic configurations ........................................................................................... 136 11. Conclusions .................................................................................................... 141 11.1. Business model framework .................................................................................... 141 11.2. Business models ...................................................................................................... 143 11.3. Generic business model configurations ................................................................ 145 11.4. Profitable and sustainable configurations ............................................................ 148 12. Discussion and future research .................................................................... 151 12.1. Future research ....................................................................................................... 153 References ............................................................................................................ 157 Appendix 1: Glossary Appendix 2: List of interviews Appendix 3: Interview guide 1 (Swedish) Appendix 4: Interview guide 2 (English) Appendix 5: Interview guide 3 (English) Appendix 6: Phone survey 5 6 1. Introduction Open-source software (OSS) is software that is developed by voluntary development contri- butions, and is freely available for everyone to download, use, re-distribute and change. As a term, OSS has existed since 1998 (Raymond, 1998), but as software since 1984 (Raymond, 2001; Stallman, 2002). The developers are organized in projects and communities around specific software. Despite the differences between them, all projects and communities are col- lectively called the OSS community. Under these circumstances, companies which offer software products based on OSS face significant challenges, since the software is available for