This is final assignment of "Business Model and Financial Strategy" from my EMBA.

1. +
From Service to Product
An Open Source Software Business Model
Transformation
5/9/2013
企業經營模式與財務策略 Final
Assignment
指導教授：江炯聰、林筠、程淑芬
助教：陳育萍
P01746035王議德 P01747019林玲如
P01748015黃峻崢 P01748038馮妙芬

2. +
Who is Jouston?
 Active Open Source Evangelist since
1998(15yrs)
 Doing Linux business from 2000 (13yrs)
 OS Architect(Software)
background, learning to be a Well-
Rounded Open Source businessman.
Professional Career Highlights:
 Head of Technical Marketing, Shuttle
 FAE team builder, Canonical
 Chairman, COSCUP 2010
 COO, OpenMoko
 Country Manager, HancomLinux
For more Info visit
http://www.linkedin.com/in/jouston
5/9/2013
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3. +
What is Open Source Software?
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3

4. +
OSS Checklist
Source Code
Free Distribution
Derived Works
Non-Discriminatory
Non-Restrictive
Free as in
Speech, no
t as in beer
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4

5. +
Culture and Believes
Release early and often, delegate
everything you can, be open to the
point of promiscuity. – Eric
Raymond
Given enough eyeballs, all bugs
are shallow. – Linus Torvalds
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6. +
Important Open Source Software
http://www.slideshare.net/ellyssa/open-source-software-and-libraries-presentation 5/9/2013
6

7. +
Can’t Live Without Open Source
5/9/2013
7
utes are
e use:
product to
h the source
ity is less
enomenon)
asy
cheaper than
d adherence to
ment’s values
0
500
1000
1500
2000
2500
3000
3500
Middle income
organizations
(<$50 M)
High income
organizations
(between $50 M
and $1 Md)
Very high income
organizations
( > $1 Md)
Money saved since open source solutions are in use*
[$ ‘000] (2005)
http://www.slideshare.net/kshitiz_goel/open-source-revenue-model

8. +
Open Source Business Models
Dual License Model
Distribution and Service Model
Distribution and Monetize Model
(Freemium Model)
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9. +
What Roles Community Play?
 Customer / User
 Key Partner / Vendor
 Opinion Leader / WOM
Marketing Pool
 External Engineer
Community is
almost
Everything you
need but directly
monetize from it.
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Double Edge Blade Or Say:

10. +
Dual License Model
I have a product with two licenses: one for free and one for money.
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11. +
Dual License Model
 One product, Two licenses
 One for free distribution and free use
 Another for proprietary use
 Copyright and Control of the product development is
on the original developer’s hand.
 KSF: Market Leader
 Why Buy: Customer like it’s open source version and
need it for commercial use.
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12. +
Case: Trolltech’s Qt
(Pronounce: Cute)
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12
KP
- Qt
Community
- KDE
Community
- SUSE Linux
KA
- Produce high
quality Qt
Libraries
- Porting to
varies OS
platforms
VP
- Best in Class
GUI Library.
- Very easy to
program
- Cross-
Platform
(Write once,
run
everywhere)
CR
High-touched
24x7
community
maintenance
CS
Any GUI
Application
programmer
KR
- Key
Engineers
- Community
CH
Internet
C$
- High engineering cost
- High community maintain cost
- Sample devices
R$
Sell proprietary version of Qt

13. +
Distribution and Service
Model
Because your support, I have power to ask money for my service.
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14. +
Distribution and Service Model
 Support and Customization and other Professional
Services:
 Consulting
 Training
 Brand Licensing
 Post-Sales Support
 KSF: Large base of users who Wants to use the
product, Release Cycle for different market.
 Why buy: Enough amount of user, Waive MS tax(or
Piracy)
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15. +
Case: Red Hat Linux
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15
KP
- Red Hat
Community
- CentOS
Community
- Linux Kernel
Community
- World Class
software
vendors:
SAP, EMC,
IBM…etc.
KA
- Leading the
OS
technology
development
- 24x7 support
VP
- Earliest and
Most Solid
Linux
distribution
- World-class
enterprise
level support
- Slower but
On-
Schedule
release cycle
CR
- 24x7 IT
support
- Low-
touched
CentOS
community
CS
Fortune 500
Eg. Banking,
Industrial…etc
.
KR
- Key
Engineers
- Community
- Reputation
CH
- Internet
- CD
- Site
License
C$
- High engineering cost
- High customer service cost
- Low community maintain cost
R$
- Training/RHCE Certification
- 24x7 Customer support

16. +
Case: Canonical / Ubuntu
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KP
- Ubuntu
community
- Dell / HP /
Toshiba /
Lenovo /
Asus / Acer
- France,
China
Government
KA
- Leading
Desktop
Linux
development
- Hardware
Enablement
VP
- Most widely
used
Desktop /
Server Linux
distribution
- Ubuntu-
Ready PC
- 6 month / 24
month(LTS)
release cycle
CR
- Hardware
Enablement
- LaunchPad
support
CS
- Dell, HP,
Toshiba,
Lenovo,
Asus, Acer
and other PC
vendors
- France /
China
government
- Google
- Amazon
KR
- Key
Engineers
- Community
- User
mindshare
CH
- Internet
- Free CD
- OEM team in
Taiwan and
US
C$
- High engineering cost
- High customer service cost
- Very low community maintain cost (All
engineers are community member)
R$
- Training/UCP Certification
- OEM Support
- LaunchPad (bug/software maintain)
- LandScape (Mass Management)

17. +
Case: Cavium Network
MontaVista
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KP
- Linux kernel
community
- AP vendors,
Intel, ARM,
Marvell,
Freescale…e
tc.
KA
- Leading
Embedded
Linux
development
- Customer
Support
VP
- Most widely
used
Embedded
Realtime
Linux
distribution
- Strong
customer
support
- Best SDK
- Release
cycle follows
major
Kernel Jump
CR
- Professional
Customer
support
CS
- ARM
- Intel
- Medical /
Healthcare
- Automotive
KR
- Key
Engineers
- Customer
support team
- User
Mindshare
CH
- Internet
- OEM team
worldwide
C$
High engineering cost
High customer service cost
R$
- OEM Support and Site License

18. +
Distribution and Monetize
Model
Make you happy so I can earn money from somewhere else.
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19. +
Distribution and Monetize Model
 Freemium model derivation, Free for use, Monetize
from somewhere else.
 KSF: Large base of users who Using the product.
 Why buy: Enough amount of user
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20. +
Case: Google Android
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KP
- OHA(Open
Handset
Alliance)
- Samsung /
HTC / LG
KA
- Leading mobile
Linux
development
- App Store
- Mobile
Advertisement
VP
- Most widely
used Mobile
Linux
distribution
- OHA
- Open Source
- Compete with
Apple iOS
- Controlled
Fragmentation
CR
- Android
Community
- Mobile AD
dashboard
CS
- End User
- Mobile
Advertise
Buyer
KR
- Key Engineers
- Community
- OHA
- Patent
CH
- Internet
- Telecom
operator
- Handset
vendor
C$
High engineering cost
High supporting cost
Moderate marketing cost
R$
- Mobile AD
- App Download

21. +
Case: Mozilla Firefox
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KP
- Google
- Community
KA
- Community
engagement
VP
- Most widely
used browser
- Most
“Plugable”
Browser,
thousands of
plug-ins
CR
- Coopetion with
Google
- High-Touched
community
maintenance
CS
- Google
- Community
KR
- Key
Engineers
- Community
CH
- Internet
C$
High engineering cost
Middle community maintain cost(All
engineers are community members)
R$
- Mobile AD through Google
(Default search/Landing Page)

22. +
Open Source
Business Models
Dual License Model
Distribution and
Service Model
Distribution and
Monetize Model
(Freemium Model)From Service to Product
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23. +
Footnote
 http://www.slideshare.net/kshitiz_
goel/open-source-revenue-model
 http://www.slideshare.net/faberNo
vel/businessmodels-opensource-
en-125492
 http://www.slideshare.net/vimal02
12/open-source-library-
management-systems
 http://www.redhat.com/
 http://www.mvista.com/
 http://www.mozilla.org/en-US/
 http://www.android.com/
 http://www.openhandsetalliance
.com/index.html
 http://www.ubuntu.com/
 http://www.canonical.com/
 http://en.wikipedia.org/wiki/Qt_
Development_Frameworks
 http://www.linkedin.com/in/joust
on
5/9/2013