OSGeo Events, FOSS4G 2008

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FOSS Business Models in the Spatial Realm

Arnulf Benno Christl

Building: Cape Town International Convention Centre
Room: Kgalagadi Room (Room 2.4b)
Date: 2008-09-30 01:30 PM – 03:00 PM
Last modified: 2008-09-08


Software is an immaterial good but most business models do not take this into account yet. One reason why proprietary businesses have dominated the past 20 years was the lack of appropriate distribution media. With the emergence of ubiquitous connectivity this problem has been tackled, abundant examples prove this. Another problem is the public perception of where software business takes place.

Due to the economic success of highly scalable proprietary licensing models in the 90s there is a tendency to equate software business with the success of a few companies. Put into relation this turns out to be a misconception. IBM has 300k employees, Microsoft only 60k employees, Google less than 5k, ESRI (the GIS market leader!) not even that. But compared to the overall number of staff who installs, maintains, and most of all
*uses* the software and thus makes up a giant share of downstream software market business the "big players" are comparably tiny shops. In the spatial theatre we are talking about merely several thousand throughout the world.

Google is a good example to show how to make money by not selling software usage licenses but by providing "content" that is spread and made accessible using that software. Google has basically adopted this part of the Open Source business model but refrains from keeping all software development itself in the public (a lot of Google software is not Open Source yet). Another good example that shows how things are connected is Google's formal assignment of its KML copyright to OGC and the subsequent release of their KML library software (libkml) under an Open Source license.

But Google only scratches the surface of geospatial data, there is so much more information than dated aerial photography and street maps. Most of the geospatial data comes from tens of thousands of experts working with software every day. On a global scale this is by far the largest group of customers. From this perspective business does not lie in implementing software but in making it usable for people who can then raise their productivity, output quality and performance. This is the place where most of the real work is being done and this is the place where Open Source makes a a growing share of revenue - often with the aid of open standards.

This presentation puts things back into relation and introduces the emerging business models of the 21st. century. Proprietary business models only account for a fraction of the business potential inherent to software. Now it is time to realign the mindset and apply Open Source business models in day to day practice.