Group Presentations – Nov 22 • Six Groups • Each group gets 20 minutes of presentation • Draw presentation order
Exam in two weeks – Nov 15 • 50 questions: 30 from lectures (60%); 10 from cases (20%); 10 from book (20%) • Bring your own scantron. Form No 882-E and a pencil. • Format: 40 MC questions; 10 short answer questions • Chapters 4, 5, 6, 8, 9, 10, 12: One to two questions from each. For a total of10 questions.
Clues for short answer questions • For the short answer questions: • 1. For each case, make sure you can write two sentences about the revenue model for that firm. Also, make sure you can write two sentences about why or why not the revenue model is sustainable. Memorize your answers. 2. There will be a question about personalization. Make sure you understand the “personalization backlash.” How does it relate to the risks of personalization described in the Broadvision case? 3. Understand the relationship between search and price competition.
Why is Open Source Relevant to You? • It is a business model • Many small business are using open source operating systems and software • You can start and coordinate open source efforts • The Case FOR and AGAINST Open Source (from article) • Are you ready for open source? (from article) • Some free applications (article) • Know your competitor (www.netcraft.com)
Open source development is … • the use of and contribution to shared source code that can then be freely redistributed and reused in code. • collaborative software development by a worldwide community of developers and users to build software, identify and correct bugs, and offer enhancements. (O’Reilly 1999)
Why Open Source? • The basic idea behind open source is very simple: When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, people adapt it, people fix bugs. And this can happen at a speed that, if one is used to the slow pace of conventional software development, seems astonishing. • Who is better to develop a code, determine goals and functions: The end-user or a corporate entity?
What motivates OS contributors? • 1. Future programming jobs, consulting and support prospects • 2. Ego gratification • 3. Altruism – Desire to help society, users, other programmers • Look at demographics of OS contributors (article)
Adam Smith • “How selfish so ever man may be supposed to be, there are evidently some principles in his nature, which interest him in the fate of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” (Adam Smith, 1759).
Red Hat example • Red Hat’s $84 million IPO shot skyward on August 20, 1999, rising from its offering price of $14 to $52 – and that was a potentially huge problem. Simply put: Red Hat was selling for $50 a pop a collection of lines of code that had been mainly written by programmers not on its payroll. Linux, it seemed, the anti-Microsoft “freeware” operating system, was going to make some people Microsoft-type money—but what about the hackers, scattered to the winds, whose code sat in the $50 boxes? …A typical, and somewhat legitimate, complaint went like this: “They are stealing the fire from Linux itself. Probably 95% of the good things that Red Hat offers are not Red Hat. They are just Linux. It’s only natural that this bugs people. A lot of people spend a lot of their personal time contributing freeware to Linux and associated software. It bugs them to see all this sold as ‘Red Hat.’ (Frieberghouse 2001)
Open Source • "This thing was created out of passion and commitment that was not motivated by monetary gain," said Bill Cason, senior vice president of technology and the engineering director at Deja.com Inc., a New York-based newsgroup and forum site, launched in 1995, that runs 215 Linux servers and 30 Apache Web servers and has another 100 Linux servers in testing. "We worry that a good thing will change for the worse. But I hope the open-source community will remain intolerant of that sort of material change." (Berinato, 1999)
The GNU philosophy (from www.gnu.org) • “The GNU Project has developed a complete free software system named ``GNU'' (GNU's Not Unix) that is upwardly compatible with Unix. Richard Stallman's initial document on the GNU Project is called the GNU Manifesto, which has been translated into several languages.” • “The word free above pertains to freedom, not price. You may or may not pay a price to get GNU software. Either way, once you have the softw1are you have three specific freedoms in using it. First, the freedom to copy the program and give it away to your friends and coworkers; second, the freedom to change the program as you wish, by having full access to source code;third, the freedom to distribute an improved version and thus help build the community.” • “The GNU Project was conceived in 1983 as a way of bringing back the cooperative spirit that prevailed in the computing community in earlier days - to make cooperation possible once again by removing the obstacles to cooperation imposed by the owners of proprietary software.” • “Free software is a matter of freedom: people should be free to use software in all the ways that are socially useful. Software differs from material objects--such as chairs, sandwiches, and gasoline--in that it can be copied and changed much more easily. These possibilities make software as useful as it is; we believe software users should be able to make use of them.”
Open Source Freedoms • 1. The freedom to copy the program and give it away to your friends and co-workers • 2. The freedom to change the program as you wish, by having full access to source code • 3. Freedom to distribute an improved version and thus help build the community.”
But (also from www.gnu.org)… • “Many people believe that the spirit of the GNU project is that you should not charge money for distributing copies of software, or that you should charge as little as possible -- just enough to cover the cost. Actually we encourage people who redistribute free software to charge as much as they wish or can. The word ``free'' has two legitimate general meanings; it can refer either to freedom or to price. When we speak of ``free software'', we're talking about freedom, not price. (Think of ``free speech'', not ``free beer''.) Specifically, it means that a user is free to run the program, change the program, and redistribute the program with or without changes.” • “Non-free programs are usually sold for a high price, but sometimes a store will give you a copy at no charge. That doesn't make it free software, though. Price or no price, the program is non-free because users don't have freedom. • Since free software is not a matter of price, a low price isn't more free, or closer to free. So if you are redistributing copies of free software, you might as well charge a substantial fee and make some money. Redistributing free software is a good and legitimate activity; if you do it, you might as well make a profit from it.”
Apache • Apache is the #1 web server on the public Internet, and has been since April 1996.Netcraft's statistics on webservers have consistently shown Apache (an OSS/FS web server) dominating the public Internet web server market ever since Apache became the #1 web server in April 1996. For example, in November 2001, Netcraft polled all the web sites they could find (totaling 36,458,394 sites), and found that of all the sites they could find, Apache had 56.81% of the market, Microsoft had 29.74% of the market, iPlanet (aka Netscape) had 3.59%, and Zeus had 2.20%. • The same overall result has been determined independently by E-soft - their report published July 1, 2001 surveyed 3,178,197 web servers and found that Apache was #1 (59.84%), with Microsoft IIS being #2 (28.42%).
The Red Hat Case • History of the open source movement • 1981 Stallman identifies problem • 1984 Stallman initiates GNU project • Free Software Foundation • 1991, Linus Torvalds begins to develop a Unix-like kernel • 1992, Torvalds combines kernel with GNU components • Open Source development • Core developers • Module owners/maintainers • Developers of patches and bug fixes • Code freeze, bleeding edge and stable versions • 1998 – Netscape Navigator • 1998 - Open Source Initiative • History of Red Hat • 1993 Marc Ewing, quits IBM to pursue alternative to VB • October 1994 The Halloween Release • Fall, 1994 Bob Young running a Linux reselling business (Slackware) • What was the big break for Red Hat? • October, 1996. Red Hat 4.0 – extremely successful release --first profit • September 98, secured investments from Intel, Netscape, Benchmark Capital • 1999 Oracle, SAP, Dell, Compaq, IBM, Novell • April, 1999 – Dell would factory install Red Hat; IBM makes hardware compatible with Red Hat
Red Hat Discussion Questions • What are the unique resources & capabilities of Red Hat? • Who are the customers of Red Hat? • Who are the target customers of Red Hat? • What are the main challenges for RedHat? • Open Source contributors (see Red Hat Open Source page) • Industry (IT and IS) recognition • Charging for a free product • Competition • How has Red Hat’s revenue model changed? Is this for the better? How does it relate to the challenges? (p. 11) • What is the Linuxcare model? What is the criticism of the model. What are strengths of that model? • Recommendations