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.

Venture idea newness, relatedness and performance in nascent ventures

Principal Topic The study of the origin and characteristics of venture ideas - or ''opportunities'' as they are often called - and their contextual fit are key research goals in entrepreneurship (Davidsson, 2004). We define venture idea as ''the core ideas of an entrepreneur about what to sell, how to sell, whom to sell and how an entrepreneur acquire or produce the product or service which he/she sells'' for the purpose of this study. When realized the venture idea becomes a ''business model''. Even though venture ideas are central to entrepreneurship yet its characteristics and their effect to the entrepreneurial process is mysterious. According to Schumpeter (1934) entrepreneurs could creatively destruct the existing market condition by introducing new product/service, new production methods, new markets, and new sources of supply and reorganization of industries. The introduction, development and use of new ideas are generally called as ''innovation'' (Damanpour & Wischnevsky, 2006) and ''newness'' is a property of innovation and is a relative term which means that the degree of unfamiliarity of venture idea either to a firm or to a market. However Schumpeter's (1934) discusses five different types of newness, indicating that type of newness is an important issue. More recently, Shane and Venkataraman (2000) called for research taking into consideration not only the variation of characteristics of individuals but also heterogeneity of venture ideas, Empirically, Samuelson (2001, 2004) investigated process differences between innovative venture ideas and imitative venture ideas. However, he used only a crude dichotomy regarding the venture idea newness. According to Davidsson, (2004) as entrepreneurs could introduce new economic activities ranging from pure imitation to being new to the entire world market, highlighting that newness is a matter of degree. Dahlqvist (2007) examined the venture idea newness and made and attempt at more refined assessment of the degree and type of newness of venture idea. Building on these predecessors our study refines the assessment of venture idea newness by measuring the degree of venture idea newness (new to the world, new to the market, substantially improved while not entirely new, and imitation) for four different types of newness (product/service, method of production, method of promotion, and customer/target market). We then related type and degree of newness to the pace of progress in nascent venturing process. We hypothesize that newness will slow down the business creation process. Shane & Venkataraman (2000) introduced entrepreneurship as the nexus of opportunities and individuals. In line with this some scholars has investigated the relationship between individuals and opportunities. For example Shane (2000) investigates the relatedness between individuals' prior knowledge and identification of opportunities. Shepherd & DeTinne (2005) identified that there is a positive relationship between potential financial reward and the identification of innovative venture ideas. Sarasvathy's 'Effectuation Theory'' assumes high degree of relatedness with founders' skills, knowledge and resources in the selection of venture ideas. However entrepreneurship literature is scant with analyses of how this relatedness affects to the progress of venturing process. Therefore, we assess the venture ideas' degree of relatedness to prior knowledge and resources, and relate these, too, to the pace of progress in nascent venturing process. We hypothesize that relatedness will increase the speed of business creation. Methodology For this study we will compare early findings from data collected through the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE). CAUSEE is a longitudinal study whose primary objective is to uncover the factors that initiate, hinder and facilitate the process of emergence and development of new firms. Data were collected from a representative sample of some 30,000 households in Australia using random digit dialing (RDD) telephone survey interviews. Through the first round of data collection identified 600 entrepreneurs who are currently involved in the business start-up process. The unit of the analysis is the emerging venture, with the respondent acting as its spokesperson. The study methodology allows researchers to identify ventures in early stages of creation and to longitudinally follow their progression through data collection periods over time. Our measures of newness build on previous work by Dahlqvist (2007). Our adapted version was developed over two pre-tests with about 80 participants in each. The measures of relatedness were developed through the two rounds of pre-testing. The pace of progress in the venture creation process is assessed with the help of time-stamped gestation activities; a technique developed in the Panel Study of Entrepreneurial Dynamics (PSED). Results and Implications We hypothesized that venture idea newness slows down the venturing process whereas relatedness facilitates the venturing process. Results of 600 nascent entrepreneurs in Australia indicated that there is marginal support for the hypothesis that relatedness assists the gestation progress. Newness is significant but is the opposite sign to the hypothesized. The results give number of implications for researchers, business founders, consultants and policy makers in terms of better knowledge of the venture creation process.

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.

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.

FM as a Business Enabler

As a functioning performing arts centre, commercial enterprise, tourist attraction and major national asset, Sydney Opera House must continue to demonstrate the optimal use and effectiveness of its facilities management (FM) to provide value for its stakeholders. To better achieve this, the Cooperative Research Centre for Construction Innovation focussed on the following three themes for investigation in the FM Exemplar Project — Sydney Opera House: digital modelling — developing a building information model capable of integrating information from disparate software systems and hard copy, and combining this with a spatial 3D computeraided design (CAD)/geographic information system (GIS) platform. This model offers a visual representation of the building and its component elements in 3D, and provides comprehensive information on each element. The model can work collaboratively through an open data exchange standard (common to all compliant software) in order to mine the data required to further FM objectives (such as maintenance) more efficiently and effectively. services procurement — developing a multi-criteria performance-based procurement framework aligned with organisational objectives for FM service delivery performance benchmarking — developing an FM benchmarking framework that enables facilities/ organisations to develop key performance indicators (KPIs) to identify better practice and improvement strategies. These three research stream outcomes were then aligned within the broader context of Sydney Opera House’s Total Asset Management (TAM) Plan and Strategic Asset Maintenance (SAM) Plan in arriving at a business framework aligned with, and in support of, organisational objectives. The Sydney Opera House is managed by the Sydney Opera House Trust on behalf of the Government of the State of New South Wales. Within the framework of the TAM Plan prepared in accordance with NSW Treasury Guidelines, the assimilation of these three themes provides an integrated FM solution capable of supporting Sydney Opera House’s business objectives and functional requirements. FM as a business enabler showcases innovative methods in improving FM performance, a better alignment of service and performance objectives and provides a better-practice model to support the business enterprise.

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.

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.

Configurable multi-perspective business process models

A configurable process model provides a consolidated view of a family of business processes. It promotes the reuse of proven practices by providing analysts with a generic modelling artifact from which to derive individual process models. Unfortunately, the scope of existing notations for configurable process modelling is restricted, thus hindering their applicability. Specifically, these notations focus on capturing tasks and control-flow dependencies, neglecting equally important ingredients of business processes such as data and resources. This research fills this gap by proposing a configurable process modelling notation incorporating features for capturing resources, data and physical objects involved in the performance of tasks. The proposal has been implemented in a toolset that assists analysts during the configuration phase and guarantees the correctness of the resulting process models. The approach has been validated by means of a case study from the film industry.

Towards a framework for business process standardization

Organizations increasingly seek to achieve operational excellence by standardizing business processes. Standardization initiatives may have different purposes, such as process streamlining, process automation, or even process outsourcing. However, standardization of processes is easier said than done. Standardization success depends on various factors, such as existent IT capabilities, available standard frameworks, market situation, and the processes’ nature, such as their level of routine or structuredness. This paper uncovers the complex nature and relative influence of process-internal and -environmental factors relevant to process standardization, by discussing three case studies from different industries. The findings are summarized in a set of initial conjectures about successful process standardization. This exploratory research is a first step towards uncovering the characteristics of successful process standardization efforts.