The Economic Case for Open Source Foundations

An open source foun­da­tion is a group of peo­ple and com­pa­nies that has come together to jointly develop com­mu­nity open source soft­ware. Exam­ples include the Apache Soft­ware Foun­da­tion, the Eclipse Foun­da­tion, and the Gnome Foun­da­tion. There are many rea­sons why soft­ware devel­op­ment firms join and sup­port a foun­da­tion. One com­mon eco­nomic moti­va­tion is to save costs in the devel­op­ment of the soft­ware by spread­ing them over the par­tic­i­pat­ing par­ties. How­ever, this is just the begin­ning. Beyond shar­ing costs, par­tic­i­pat­ing firms can increase their rev­enue through the pro­vi­sion and increased sale of com­ple­men­tary prod­ucts. Also, by estab­lish­ing a suc­cess­ful open source plat­form, soft­ware firms can com­pete more effec­tively across tech­nol­ogy stacks and thereby increase their address­able mar­ket. Not to be neglected, com­mu­nity open source soft­ware is a com­mon good, cre­at­ing increased gen­eral wel­fare and hence good­will for the involved com­pa­nies.