Java Magazine - May/June 2012

product. Twitter is a great example. They build software—their biggest expense is probably software development—but they don’t sell software per se. They sell a service and generate revenue from advertising and data intelligence. They’re savvy with software but don’t sell software licenses.

And then the third wave of participation is another degree removed from that—banks, insurance companies, maybe shipping companies, retailers, and so on. These organizations generate none of their revenue from software but still use software internally for strategic reasons.

Java Magazine: So what is the business community model that makes OpenJDK, or any open source projects for that matter, work? Smith: The fundamentals of business suggest that there are three ways to increase the value of your company. You can increase revenue; you can lower costs; or you can increase the multiple that somebody who would want to buy your company would assign you based on your agility, your ability to grow, or whatever. Open source and participating in open source can help in all three ways.

People sometimes say that open source lowers costs because you share the development cost with other organizations. But it doesn’t really work that way. Instead, different organizations focus on what they’re good at. It’s not so much that you lower your costs. But you end up with a richer product with greater functionality than you could do alone. You get more for your dollar because new opportunities arise. In that sense, it lowers costs because open source can often cost less to create higher-quality products. You can drive products in new directions, which helps with revenue. Java Magazine: Describe the virtuous cycle that drives open source communities. Smith: As with any cycle, you need a starting point. In most cases, I’ve noticed that you initially start out with a code base, which is the project. And that project gets adopted by end users. In the case of OpenJDK, there are two kinds of users: there are Java developers, but also the millions of end users who have Java on their desktops and servers.

With a large pool of users, whether it’s a large pool of developers or end users with Java on their desktops and servers, there exists a business or personal opportunity that attracts vendors and individuals. The vendors will usually be looking for profit in the form of cash. Individuals may be looking for profit, but they may also be simply looking for the satisfaction of having helped and participated in an important software project. Or they may be looking to hone their skills or get the personal satisfaction of fixing a problem.