Value creation and value capture fro open source software publisher : a new business model based on mutualisation

Key topics: Since the birth of the Open Source movement in the mid-80's, open source software has become more and more widespread. Amongst others, the Linux operating system, the Apache web server and the Firefox internet explorer have taken substantial market shares to their proprietary competitors. Open source software is governed by particular types of licenses. As proprietary licenses only allow the software's use in exchange for a fee, open source licenses grant users more rights like the free use, free copy, free modification and free distribution of the software, as well as free access to the source code. This new phenomenon has raised many managerial questions: organizational issues related to the system of governance that underlie such open source communities (Raymond, 1999a; Lerner and Tirole, 2002; Lee and Cole 2003; Mockus et al. 2000; Tuomi, 2000; Demil and Lecocq, 2006; O'Mahony and Ferraro, 2007;Fleming and Waguespack, 2007), collaborative innovation issues (Von Hippel, 2003; Von Krogh et al., 2003; Von Hippel and Von Krogh, 2003; Dahlander, 2005; Osterloh, 2007; David, 2008), issues related to the nature as well as the motivations of developers (Lerner and Tirole, 2002; Hertel, 2003; Dahlander and McKelvey, 2005; Jeppesen and Frederiksen, 2006), public policy and innovation issues (Jullien and Zimmermann, 2005; Lee, 2006), technological competitions issues related to standard battles between proprietary and open source software (Bonaccorsi and Rossi, 2003; Bonaccorsi et al. 2004, Economides and Katsamakas, 2005; Chen, 2007), intellectual property rights and licensing issues (Laat 2005; Lerner and Tirole, 2005; Gambardella, 2006; Determann et al., 2007). A major unresolved issue concerns open source business models and revenue capture, given that open source licenses imply no fee for users. On this topic, articles show that a commercial activity based on open source software is possible, as they describe different possible ways of doing business around open source (Raymond, 1999; Dahlander, 2004; Daffara, 2007; Bonaccorsi and Merito, 2007). These studies usually look at open source-based companies. Open source-based companies encompass a wide range of firms with different categories of activities: providers of packaged open source solutions, IT Services&Software Engineering firms and open source software publishers. However, business models implications are different for each of these categories: providers of packaged solutions and IT Services&Software Engineering firms' activities are based on software developed outside their boundaries, whereas commercial software publishers sponsor the development of the open source software. This paper focuses on open source software publishers' business models as this issue is even more crucial for this category of firms which take the risk of investing in the development of the software. Literature at last identifies and depicts only two generic types of business models for open source software publishers: the business models of ''bundling'' (Pal and Madanmohan, 2002; Dahlander 2004) and the dual licensing business models (Välimäki, 2003; Comino and Manenti, 2007). Nevertheless, these business models are not applicable in all circumstances. Methodology: The objectives of this paper are: (1) to explore in which contexts the two generic business models described in literature can be implemented successfully and (2) to depict an additional business model for open source software publishers which can be used in a different context. To do so, this paper draws upon an explorative case study of IdealX, a French open source security software publisher. This case study consists in a series of 3 interviews conducted between February 2005 and April 2006 with the co-founder and the business manager. It aims at depicting the process of IdealX's search for the appropriate business model between its creation in 2000 and 2006. This software publisher has tried both generic types of open source software publishers' business models before designing its own. Consequently, through IdealX's trials and errors, I investigate the conditions under which such generic business models can be effective. Moreover, this study describes the business model finally designed and adopted by IdealX: an additional open source software publisher's business model based on the principle of ''mutualisation'', which is applicable in a different context. Results and implications: Finally, this article contributes to ongoing empirical work within entrepreneurship and strategic management on open source software publishers' business models: it provides the characteristics of three generic business models (the business model of bundling, the dual licensing business model and the business model of mutualisation) as well as conditions under which they can be successfully implemented (regarding the type of product developed and the competencies of the firm). This paper also goes further into the traditional concept of business model used by scholars in the open source related literature. In this article, a business model is not only considered as a way of generating incomes (''revenue model'' (Amit and Zott, 2001)), but rather as the necessary conjunction of value creation and value capture, according to the recent literature about business models (Amit and Zott, 2001; Chresbrough and Rosenblum, 2002; Teece, 2007). Consequently, this paper analyses the business models from these two components' point of view.

Trust and strong ties in the selection and evaluation of business advisors by small firms

Principal Topic A small firm is unlikely to possess internally the full range of knowledge and skills that it requires or could benefit from for the development of its business. The ability to acquire suitable external expertise - defined as knowledge or competence that is rare in the firm and acquired from the outside - when needed thus becomes a competitive factor in itself. Access to external expertise enables the firm to focus on its core competencies and removes the necessity to internalize every skill and competence. However, research on how small firms access external expertise is still scarce. The present study contributes to this under-developed discussion by analysing the role of trust and strong ties in the small firm's selection and evaluation of sources of external expertise (henceforth referred to as the 'business advisor' or 'advisor'). Granovetter (1973, 1361) defines the strength of a network tie as 'a (probably linear) combination of the amount of time, the emotional intensity, the intimacy (mutual confiding) and the reciprocal services which characterize the tie'. Strong ties in the context of the present investigation refer to sources of external expertise who are well known to the owner-manager, and who may be either informal (e.g., family, friends) or professional advisors (e.g., consultants, enterprise support officers, accountants or solicitors). Previous research has suggested that strong and weak ties have different fortes and the choice of business advisors could thus be critical to business performance) While previous research results suggest that small businesses favour previously well known business advisors, prior studies have also pointed out that an excessive reliance on a network of well known actors might hamper business development, as the range of expertise available through strong ties is limited. But are owner-managers of small businesses aware of this limitation and does it matter to them? Or does working with a well-known advisor compensate for it? Hence, our research model first examines the impact of the strength of tie on the business advisor's perceived performance. Next, we ask what encourages a small business owner-manager to seek advice from a strong tie. A recent exploratory study by Welter and Kautonen (2005) drew attention to the central role of trust in this context. However, while their study found support for the general proposition that trust plays an important role in the choice of advisors, how trust and its different dimensions actually affect this choice remained ambiguous. The present paper develops this discussion by considering the impact of the different dimensions of perceived trustworthiness, defined as benevolence, integrity and ability, on the strength of tie. Further, we suggest that the dimensions of perceived trustworthiness relevant in the choice of a strong tie vary between professional and informal advisors. Methodology/Key Propositions Our propositions are examined empirically based on survey data comprising 153 Finnish small businesses. The data are analysed utilizing the partial least squares (PLS) approach to structural equation modelling with SmartPLS 2.0. Being non-parametric, the PLS algorithm is particularly well-suited to analysing small datasets with non-normally distributed variables. Results and Implications The path model shows that the stronger the tie, the more positively the advisor's performance is perceived. Hypothesis 1, that strong ties will be associated with higher perceptions of performance is clearly supported. Benevolence is clearly the most significant predictor of the choice of a strong tie for external expertise. While ability also reaches a moderate level of statistical significance, integrity does not have a statistically significant impact on the choice of a strong tie. Hence, we found support for two out of three independent variables included in Hypothesis 2. Path coefficients differed between the professional and informal advisor subsamples. The results of the exploratory group comparison show that Hypothesis 3a regarding ability being associated with strong ties more pronouncedly when choosing a professional advisor was not supported. Hypothesis 3b arguing that benevolence is more strongly associated with strong ties in the context of choosing an informal advisor received some support because the path coefficient in the informal advisor subsample was much larger than in the professional advisor subsample. Hypothesis 3c postulating that integrity would be more strongly associated with strong ties in the choice of a professional advisor was supported. Integrity is the most important dimension of trustworthiness in this context. However, integrity is of no concern, or even negative, when using strong ties to choose an informal advisor. The findings of this study have practical relevance to the enterprise support community. First of all, given that the strength of tie has a significant positive impact on the advisor's perceived performance, this implies that small business owners appreciate working with advisors in long-term relationships. Therefore, advisors are well advised to invest into relationship building and maintenance in their work with small firms. Secondly, the results show that, especially in the context of professional advisors, the advisor's perceived integrity and benevolence weigh more than ability. This again emphasizes the need to invest time and effort into building a personal relationship with the owner-manager, rather than merely maintaining a professional image and credentials. Finally, this study demonstrates that the dimensions of perceived trustworthiness are orthogonal with different effects on the strength of tie and ultimately perceived performance. This means that entrepreneurs and advisors should consider the specific dimensions of ability, benevolence and integrity, rather than rely on general perceptions of trustworthiness in their advice relationships.

Modelling construction business performance

Searching academic databases for records on ‘business failure’, ‘business distress’ or ‘bankruptcy’ yields a large body of studies on qualitative, empirical, theoretical and simulation aspects. It is a central part of this research to distil from this large quantity of potentially relevant reports and methodologies those which can both flag and predict business failure in the construction industry. An additional search term, such as, ‘construction’, ‘construction industry’ or ‘contractor’ yields a much smaller number of hits, many of which emphasize the construction industry’s distinctive characteristics. We scientists need first to understand the subject of investigation and the environment in which it lives. To do so, an analysis of existing successful and failed approaches to particular research questions is helpful before embarking on new territory. This guides the structure of the following report for we first review papers that specifically report on aspects of business failure in the construction industry followed by, (a) an overview of promising candidates borrowed from other disciplines and industries, and (b) a possible novel approach. An Australian (Queensland) perspective on the topic will also drive this investigation as most of the published research has been applied to the US and UK construction industries.

A model for the uptake of E-business by building small and medium enterprises

The adoption of e-business by Small and Medium Enterprises (SMEs) in construction lags from other service and product businesses within the building sector. This paper develops a model to facilitate the uptake of electronic business, especially in relation to SMEs within the Australian construction sector. Ebusiness is defined here as “the undertaking of business-related transactions, communications and information exchanges utilising electronic medium and environment”, the elicited model highlights significant changes needed including skills development, social, economic and cultural issues. The model highlights barriers for SMEs to migrate towards e-transactions, e-bidding, e-tendering and ecollaboration and provides learning and skills development components. The model is derived from case study fieldwork and is to inform diffusion and awareness models for best practice. Empirical techniques included ‘focus group’ interviews and one to one ‘interviews’. Data was transcribed and analysed using cluster analyses. Preliminary results reveal that current models for e-business adoption are not effective within the construction context as they have emerged from other service and product industries - such as retail or tourism. These generic models have largely ignored the nature of the construction industry, and some modifications appears to be required. This paper proposes an alternative adoption model which is more sensitive to the nature of the industry – particularly for e-business uptake in building SME’s.

Barriers to e-business adoption in construction: international literature review

The adoption of e-business by the Australian construction industry lags other service and product industries. It is assumed that slow adoption rate does not reflect the maturity of the technology but is due to adoption barriers peculiar to the nature of construction. This paper examines impediments to the uptake of e-business nationally and internationally. A systematic and extensive literature search of barriers (also referred to as obstacles, impediments or hindrances) to adoption has been undertaken and the findings discussed in this paper. This review included more that 200 documents and these have been published in a searchable database as part of a larger research initiative funded by the Cooperative Research Centre for Construction Innovation. The influence of levels of e-business maturity seen in other sectors such as retail, tourism and manufacturing was also captured and a number of major barriers were identified some including: privacy, trust, uncertainty of financial returns, lack of reliable measurement, fraud, lack of support and system maintenance. A total of 23 barriers were assessed in terms of impact to organisational type and size across reviewed documents. With this information it was possible to develop a reference framework for measuring maturity levels and readiness to uptake e-business in construction. Results have also shown that barriers to e-business adoption work differently according to organisational type and culture. Areas of training and people development need to be addressed. This would include a more sensitive approach to the nature of construction organisations, especially to those small and medium enterprises. Raising levels of awareness and creating trust for on-line collaboration are other aspects that need attention, which current studies confirm as lacking. An empirical study within construction, to validate these findings, forms the subsequent phase of this research.

A45 ICT curriculum design to bridge the gap between industry and academia

Building Information Model (BIM) software, collaboration platforms and 5D Construction Management software is now commercially available and presents the opportunity for construction project teams to design more cost effectively, plan construction earlier, manage costs throughout the life cycle of a building project and provide a central asset management register for facilities managers. This paper outlines the merits of taking a holistic view of ICT in curriculum design. The educational barriers to implementation of these models and planning tools are highlighted. Careful choice of computer software can make a significant difference to how quickly students can master skills; how easy it is to study and how much they enjoy learning and be prepared for employment. An argument for BIM and 5D planning tools to be introduced into the curriculum to assist industry increase productivity and efficiencies are outlined by the authors.

Teaching business process modelling : experiences and recommendations

A curriculum for a university-level course called Business Process Modeling is presented in order to provide guidance for the increasing number of institutions who are currently developing such contents. The course caters to undergraduate and post graduate students. Its content is drawn from recent research, industry practice, and established teaching material, and teaches ways of specifying business processes for the analysis and design of process-aware information systems. The teaching approach is a blend of lectures and classroom exercises with innovative case studies, as well as reviews of research material. Students are asked to conceptualize, analyze, and articulate real life process scenarios. Tutorials and cheat sheets assist with the learning experience. Course evaluations from 40 students suggest the adequacy of the teaching approach. Specifically, evaluations show a high degree of satisfaction with course relevance, content presentation, and teaching approach.

Forecasting trends in the Brisbane central business district office market

The Queensland Department of Public Works (DPW) holds a significant interest in the Brisbane Central Business District (CBD) in controlling approximately 20 percent of the office space within its confines. This comprises a total of 333,903 square metres of space, of which 170,111 square metres is owned and 163,792 square metres is leased from the private sector. The department’s nominal ownership extends to several enduring, landmark buildings as well as several modern office towers. The portfolio includes the oldest building in the CBD, being the former Commissariat Stores building and one of the newest, a 15,000 square metre office tower under construction at 33 Charlotte Street.

Produsage and business : sharing your brand with users

Relations between brands and their users continue to be affected by a traditional perspective that sees the producers and consumers of goods and services as inherently different animals. In the emerging information and knowledge economy, and especially in online contexts, this model is no longer sustainable. Instead, spearheaded by the Web 2.0 phenomenon, there is a trend towards the fusing of production and usage as a new, hybrid process of produsage. This presentation presents the key characteristics driving produsage processes, and describes four guiding principles for businesses as they share their brand with users: * Be open. * Seed community processes by providing content and tools. * Support community dynamics and devolve responsibilities. * Don't exploit the community and its work.

Performance Benchmarking of Australian Business Regulation : Submission to the Productivity Commission

The need to “reduce red tape” and regulatory inconsistencies is a desirable outcome (OECD 1997) for developed countries. The costs normally associated with regulatory regimes are compliance costs and direct charges. Geiger and Hoffman (1998) have noted that the extent of regulation in an industry tends to be negatively associated with firm performance. Typically, approaches to estimation of the cost of regulations examine direct costs, such as fees and charges, together with indirect costs, such as compliance costs. However, in a fragmented system, such as Australia, costs can also be incurred due to procedural delays, either by government, or by industry having to adapt documentation for different spheres of government; lack of predictable outcomes, with variations occurring between spheres of government and sometimes within the same government agency; and lost business opportunities, with delays and red tape preventing realisation of business opportunities (OECD 1997). In this submission these costs are termed adaptation costs. The adaptation costs of complying with variations in regulations between the states has been estimated by the Building Product Innovation Council (2003) as being up to $600 million per annum for building product manufacturers alone. Productivity gains from increased harmonisation of the regulatory system have been estimated in the hundreds of millions of dollars (ABCB 2003). This argument is supported by international research which found that increasing the harmonisation of legislation in a federal system of government reduces what we have termed adaptation costs (OECD 2001). Research reports into the construction industry in Australia have likewise argued that improved consistency in the regulatory environment could lead to improvements in innovation (PriceWaterhouseCoopers 2002), and that research into this area should be given high priority (Hampson & Brandon 2004). The opinion of industry in Australia has consistently held that the current regulatory environment inhibits innovation (Manley 2004). As a first step in advancing improvements to the current situation, a summary of the current costs experienced by industry needs to be articulated. This executive summary seeks to outline these costs in the hope that the Productivity Commission would be able to identify the best tools to quantify the actual costs to industry.

Comparing the ethical predisposition of university students in five English-speaking countries : an examination of 14 questionable business practices

Recent years have seen intense scrutiny focused on the reported ethical breaches of enterprises across the globe. At the forefront of the accompanying criticism are the actions of giant American firms such as WorldCom, Arthur Anderson, and Enron. However, such deviations from acceptable standards of conduct have not been confined to the American market. Australia endured its era of “corporate excess” in the 1980s [Milton-Smith, 1997]. As a result, a spate of ethics-based research was undertaken in the early 1990s. More recently, China has been identified as a major venue for behavior deemed to be unacceptable, even unsafe. Issues such as counterfeit fashion items, software, and automobile parts have been a concern for several years [Gonzalez, 2007]. Perhaps more disconcerting are the recent recalls of children’s products, many of which were produced for leading toy companies such as Mattel and Fisher-Price, because of the use of dangerous lead-based paint. As one might anticipate, news reports and consumer protection agencies have been quick to condemn any action that falls within the “controversial” category. Indeed, many segments of society characterize such actions as unethical behavior. One result of this increased level of concern is the higher level of attention given to ethics in higher education programs. Even accreditation bodies such as AACSB have virtually mandated the integration of ethics into the curriculum. As a consequence, academicians have ramped up their ethics-based research agendas.

What’s in a handshake? Exploring business-to-business relational exchange

Despite its importance in the development of competitive advantage, attempts to unify diverse classifications of business-to-business relational exchange have been largely unsuccessful. We used 18 semi-structured, in-depth interviews with managers from a wide range of industries to explain the business-to-business relational exchange construct. Analysis of the data revealed that business-to-business relational exchange comprises five key dimensions. These are communication, compatibility, commitment, trust and power symmetry. The research highlights the importance of personal interaction in business relationships and provided additional insights into the importance of affective commitment. In addition we reveal a number of negative consequences of affective commitment, which have been previously unexplored. A new conceptual model of business-to-business relational exchange is presented, which synthesises these findings and directs future research.

Responding to an ageing workforce in an Australian state

Many industrialised nations have changing demographic profiles, as increased longevity and decreased birth rates lead to an ageing population. This presents significant challenges for workforces, as older employees retire and there are insufficient numbers of younger employees to take their place. This leads to skills shortages, and strong competition for those who are available. This paper considers these issues in the context of Queensland, the third largest state of Australia. The Queensland Government is addressing the issues for all industries in the state, primarily through a Skills Plan and an Experience Pays Awareness Strategy. As the largest employer in the state, the Queensland Government has commenced implementing the Experience Pays Awareness Strategy within its own workforce. The approach touches on many facets of HRM. The HRM policy framework and tools are examined for their potential to support increased participation of older employees. A range of issues are addressed for older workers, including their competence and health and safety issues. Issues for managers include addressing myths and subtle discrimination against older workers, as well as managing cross-generational workforce. Other strategies and methods are targeted at cultural factors, such as the expectations of older workers, and the myths and discrimination against older workers. Yet other strategies are aimed at organisational issues such retention of knowledge and succession planning.

Decision support system for improving construction companies’ business performance

As part of a decision making process, the controlling process in construction companies can be supported by computer application that provides faster and reliable decision. This paper discusses the development of a knowledge-based decision support system for controlling construction companies’ business performance. The knowledge-base was developed using questionnaire survey and case studies. A questionnaire survey was conducted to identify potential problems that can occur in construction companies as well as the source of the problems and their impact on companies’ performance. Case studies were used to identify and analyse various corrective actions. The result of the study shows that decision support system using knowledge-based management system improves the effectiveness and the efficiency of decision making process for selecting the most appropriate corrective action that can improve construction companies’ performance. The application, which had been developed in this research, was designed to support the process of controlling construction companies’ business performance and to assist young manager in selecting the most optimum corrective actions for the problems related to achieving companies’ objectives. This computer application can be used as a learning tool for identifying potential problems that a construction company faces and the most optimum corrective action.