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Home > Publications > Documents de travail > Developing FLOSS, a market driven investment.

Working paper 4-2008.

Developing FLOSS, a market driven investment.

First evidence from a francophone companies survey.

Tuesday 17 June 2008 , by Nicolas Jullien | Lié au projet de recherche : Collectifs de production en ligne

IT industry, FLOSS, Market strategy, Survey, Ascendant Hierarchical Classification.

Over the last few years, FLOSS (Free Libre Open Source Software) has become a commercially viable reality of the first order, with an increasing number of companies getting involved in the communities developing it (Lakhani & Wolf 2005). In this article, we try to explicit the link between market offer and involvement into communities.

To do so, we surveyed francophone companies (France, Belgium, Switzerland) affirming a utilization of FLOSS in their commercial activity. Based on roughly 500 companies concerned, we obtained 141 usable responses and we statistically verified the link between FLOSS commercial strategies and degree of involvement into communities. We propose a typology of commercial strategies explaining the differences in involvement and we validate this typology thanks to a ascendant hierarchical classification (AHC) on them.


For a number of years now free source software has been making itself felt in the business environment and numerous scientific studies have focussed on the phenomenon, among which those published in Terminal in 19991 were forerunners. Nine years on, whilst much remains to be done in order to fully understand the development communities, some of the questions raised have found at least partial answers, in particular those referring to the individual developer’s incentives. To be precise, until recently FLOSS was solely the affair of computer analysts, who co-developed their tools and had a stake in working together because their skills were complementary (Lakhani & von Hippel, 2002); at that time the customers’, as it were, of the FLOSS companies tended to be IT departments of major groups. (Jullien, 2003).

Today FLOSS has apparently become an economic issue of considerable importance, in particular as far as Europe is concerned, as the latest report (end 2006) published by the European Commission on the matter shows2. Therein, we read: Whilst concentrating on an ambitious programme of FLOSS production in the embedded systems and domestic networks, Europe can reach several goals: allow free access to a key resource, stimulate competition, promote the achievement of the Lisbon targets, and lastly restore European competitiveness within the ICT (Dang Nguyen & Genthon, 2006).

Whilst there is still a question of a non-commercial organisation of production, their products are arousing interest within the world of commerce, from IBM’s3 announcement in 2001 an investment of over 1 billion dollars in Linux, to Microsoft’s4 share source initiative, which takes up the concept of sharing source codes with users, up to and including even distributing a part of its software under an open source5 licence. This is no longer merely an issue for computer analysts or key account markets; the companies proposing free solutions are increasingly turning towards small and medium-sized businesses, as noted in the Journal du Net of September 20056. Lakhani & Wolf (2005) reveal that amongst the FLOSS developers responding to their survey, a majority of [their] respondents are skilled and experienced professionals working in IT-related jobs, with approximately 40% being paid to participate in the FLOSS project. Finally, in the interest of the business world for the open source model goes beyond the framework of IT to enter the realm of telecommunications as well7.

More recently Henkel (2006), while studying the embedded Linux system, has shown that business involvement pursued several strategies and that they did not reveal all the codes they produced but rather carefully selected their contributions. Dahlander & Wallin (2006) who, on the other hand, were interested in the GNOME graphic interface project, have demonstrated that companies were motivated by strategic aims, follow-up, monitoring development communities; these objectives being brought to light by the category of developer involved in the communities which was hiring them.

In Jullien & Zimmermann (2006) we postulated that this involvement may be explained the companies’ strategic positioning on their markets combined with each market’s respective characteristics.

What we are attempting here is to test this hypothesis starting from a survey carried out among Francophone companies (French, Belgian, and Swiss) who professed to use FLOSS in their commercial operations. Based on a potential of approximately 500 businesses we obtained 141 usable responses.

The article is structured as follows: in section 2 we present our sample an show that there are links between the investments into FLOSS developments and the market positioning. In section 3, we propose a framework to explain the connection between the market positioning and the way companies involve themselves in development community. Section 4 proposes a statistical validation of the analysis carried out in Section 3 using the data presented in section 2.

View online : http://ssrn.com/abstract=1298954


View online : http://ssrn.com/abstract=1298954

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