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The Powerful Economic Underpinnings of OSS

Open source software has highlighted the fertility of "the commons"

In 1968, Garret Hardin wrote a seminal paper that ran in Science Magazine called “The Tragedy of the Commons.” Hardin defined the commons as a place where multiple people are each endowed with the privilege to use a given resource, and no one has the right to exclude another. Think of a pasture where many farmers can graze their animals. When multiple users have such privileges of use, each user benefits directly from using the resource (one more cow in a farmer’s herd benefits that farmer directly) but the cost of each person's use is borne by all users (the increased use that one cow puts on the pasture affects all users of the pasture).

The result is that each user has an incentive to use the common resource more, and less incentive to curb their use of the resource. The resource is thus prone to overuse and, over time, it degrades - a tragedy of the commons. The idea of a "tragedy of the commons" can be applied to a wide variety of issues including things like air and water pollution, individual consumption choices, and - Hardin's main target - population growth.

Open source software (OSS) development and use, as described by the General Public License (GPL) and other similar licenses, creates a unique situation that yields surprising outcomes when held up to Hardin's analysis. As we shall see OSS effectively turns Hardin’s "tragic" conclusion on its head. Key aspects of open source software development, distribution, AND use enable the open source software movement to create a tremendously positive outcome. Hardin’s analysis applied to OSS shows that tremendous gains in the quality and volume of software development and use are the likely outcomes.

Because this is a pretty long analysis, we'll hit you with some of the conclusions right now. Using Hardin's analysis, we'll show that OSS development is much like the Tragedy of the Commons turned on its head. Unlike the tragedy, OSS leads to a plentiful outcome where the amount of software in the market should continually grow and the quality of that software should continually improve. We'll also show that, as these continual improvement dynamics become more widely recognized, the integration of OSS development and use within business and government institutions will mature, further accelerating the strongly positive aspects of the cycle.

This article was written because Hardin's analysis is an interesting one when applied to OSS and because the implications of the analysis have important messages for public and private organizations considering greater involvement in OSS projects both on the user and the development side.

Clarifications

Perhaps the biggest potential criticism of invoking Hardin's analysis here is that critics would claim OSS is not like the cow pasture or polluted river to which Hardin's analysis is usually applied. That is true. The two important differences are these:

  1. the use of OSS does not have a detrimental effect on the quality of the commons (i.e. OSS cannot be overused)
  2. the use of the OSS commons actually improves the commons (as use of a particular piece of OSS grows, the developer base for the software generally also grows).

So, what is the OSS commons?

On the development/management/maintenance side, the commons is the human-readable source code. It is here that the armies of open source developers spend time adding to, cleaning up, and enhancing the OSS product. On the use side, the OSS commons is the copy of the executable binary that each user gets to use. Like a pasture, this binary is used in different ways by each user, just like a pasture can be used to graze cows or goats. So the commons for OSS are a little more complex than Hardin's commons.

Looking deeper, for the maintenance/development side there is a single commons (unless the code base has forked) and on the use side, there is a weak concept of a commons in that the OSS use commons can be duplicated for the nearly zero cost of network bits or CD-ROM blanks. These differences constitute an exciting turn of events from Hardin's commons as far as the economic underpinnings go. We couldn't have it any better, in fact. If only cars or houses had the same economic attributes as OSS. And, this is just the leading edge of the good deal that is OSS with a maturation of the funding of OSS that will follow in the coming years. While there are good conclusions ahead of us, we can see here that Hardin's analysis can, in large part, be applied to the OSS dynamic with very little modification.

Turning the Tragedy into a Cornucopia

Here is what is really going on in regards to Hardin's analysis when applied to OSS development and use. The key aspect of Hardin's analysis is that a common resource is subject to overuse and degradation when multiple users have unrestricted rights to use the commons. Because Hardin's analysis addressed both management of the commons and use of the commons, let's look first at management of the commons.

OSS Development

In OSS, management is the same as software development, bug fixing, maintenance, and other actions that improve an OSS project in some way. OSS management of the commons is typically thought of as writing code but it could also include documentation development, debugging or a host of other things that improve the software product or its ease of use.

The foundation of OSS development is volunteerism - via the Internet. There is a direct connection between the level of volunteer developer interest in a particular OSS product and the installed user-base of that project. Sure, certain major projects are occasionally one-man bands such as qmail, the popular mail transfer agent written by Daniel J. Bernstein. In general though, a correlation can be made between interest in use and interest in development. Linux itself is a testament to this ,as Linux development took off in 1991 when it reached a certain level of maturity. It's safe to say that, as OSS continues its growth trend on the use side, there will be a proportional growth in the number of developers ready to pitch in a hand.

The OSS development community is mature in some significant ways that augment the volunteer foundation - this is probably part of a decades-long process of maturation that is ahead. Recent signs of this maturation have been the role big companies have started taking in OSS development. In the past year, a number of big companies have stepped up to contribute significant amounts of existing technology to the OSS movement. In addition, companies are increasingly finding justifiable economic businesses models that include participation in OSS development either through funding OSDL or by directly funding programming teams. As justifiable business models continue to become more commonplace, we will see the OSS development process continue to gain momentum and strength - and from both private and public participants if the development rumblings from Japan and India are any indication regarding OSS industry use consortia.

OSS continually improves because it allows new developers to stand on the shoulders of giants. Sure, there may be cases where bad design or decision-making lead to a step back for a particular OSS program, but for the vast majority of cases, OSS just gets continually better as the various developers continue to apply new code, bug fixes, and other enhancements. Even if all the developers left a project and the project became dormant, the code would probably still be available somewhere for download and because of that, a new developer or team could come back in at any time and continue building on the code base left by predecessors - starting not from scratch but standing on the shoulders of giants as it were. This is something that is simply not done with proprietary software without the code base being sold to a new entity - an expensive and tortuous process.

So, on the development side, we are seeing the beginnings of what could be a huge level of development support from business and industry and we are seeing the traditional source of OSS development talent - the user base - continuing to grow. An exciting time for OSS indeed.

Users Everywhere

On the use side, each user participates in OSS by installing OSS from a CD-ROM or network download and then running the software. Some users are getting pre-loaded installations but the pre-loads originate from a download or CD. No matter the source of the software, for users of OSS, the "commons" is the installed binary and the related configuration information. This definition is a little simple but this is good for now.

Use of the commons in this case has no impact on other users of the commons. About the worst thing possible as far as one user impacting another user is when the mirror you are downloading Linux or other OSS from is too busy and you have to come back later. Other than download traffic, there is no impact caused on a particular user by other users of OSS. A single malicious user can still undertake security attacks on other users but this is akin to a cow rancher using his cows to trample and destroy a common pasture and it is outside this analysis. No matter the species of software, OSS or proprietary, malicious users can attack other users.

Since OSS use is important as a driver for OSS development, let's look quickly at the drivers of OSS use. Way back in the hacker days, when the hacker culture dominated the net and OSS more than it does today, OSS was thought of as software "by geeks for geeks." That perhaps explains the preponderance of OSS on the server side. Linux and Apache, the two biggest OSS projects in terms of impact, are firmly rooted in the server side - not the client desktop, not the embedded space, and not the super computer or mainframe space even though great design is taking OSS into all those spaces. Under the hacker culture, use considerations were probably focused on "scratching an itch." A developer would code up something if it scratched an itch that was currently unscratched. If others had this same itch, the software was likely to develop a user base.

As the OSS user community has grown, we can say that the primary drivers of user adoption are now ease of installation and features. So, if a piece of software has useful features and is easy to get and install, then it is likely to be used. The Linux distributions are generally thought of as focusing on the installation side of things by making it easy to take any reasonably standard PC, server, or laptop and install a nice version of Linux on that hardware. The easier it is and the better the features, the more people will use it.

On the feature side, we also see some other user dynamics on the demand side. Specifically, software is complementary to other software. For example, because Apache and Linux are more complementary than Apache and Windows XP, we can see that as people adopt Apache, they bring Linux or one of the BSDs along more than XP. Similarly, as people decide to move to Linux, Apache use also grows more than IIS, the Windows-based Web server. Another complement to software is hardware. In this sense, as hardware gets cheaper and more powerful, that should drive increasing use of Linux (and all software in general).

Summarizing the user side, we see ease of adoption and the features of Linux and all its software complements as driving use. Because use by one person has no cost for other users and in fact use by one person has benefits to other users through development, OSS is like a big snowball gaining momentum with every day as use feeds back into development which leads to new features which lead to more use. These dynamics are key parts of the powerful economic underpinnings that drive the OSS movement.

But How Great is the Future Going to Be?

The next part of Hardin's analysis was how bad the tragedy would be. Hardin basically said that, if left unchecked, the resource would degrade until it was unsuitable for its current use. A way to state Hardin's claim more generally is that, as the resource degrades, the uses that it can be applied toward become fewer and fewer and the remaining uses tend to be less economically profitable. A resource that could have been used for either ranching or a parking lot may only be useful as a parking lot after it has been degraded.

In the OSS case, we have to look at how far the good of the OSS commons will extend and how quickly.

Because OSS generally makes continual improvements in features, bug fixes and so on, it's a like a ratchet wrench that only turns in the correct direction. Flipping Hardin's conclusion of degradation to one of improvement, we see that the OSS resource should generally become suitable for new uses over time. This can be thought of as portability and new applications. Portability is one area where OSS shines, with the BSD flavors being ported to over 1000 platforms. The presence of Linux in both supercomputing and a wide array of embedded devices shows vast advances in the hardware applicability of the software when compared to any proprietary platform. In other areas like GUI desktop environments, OSS has found the challenges a little steeper but there is no doubt that these challenges will be met in time.

The other aspect to this cornucopia is how fast that ratchet wrench is turning. To that issue we can say that, today, the wrench is turning surprisingly fast on many fronts. For example, bug fixes have been shown to come out about 6 times faster for OSS than for proprietary equivalents. It’s also pretty astounding to think about the strides and maturity of Linux, a project that started in 1991 that now exceeds comparable proprietary offerings in many (but not all) ways. So, it's safe to say that the wrench is turning quickly now and will only accelerate over time as the user base grows and as business and industry involvement in OSS continues to mature resulting in greater levels of development involvement.

Fueling OSS Even More

Lastly, Hardin focused on ways the tragedy of the commons can be avoided. Since OSS leads to a good outcome, our analysis may instead focus on how to make a fantastic future better than it might otherwise be. Here, we have to look at solutions for managing a resource that has an improvement and momentum all its own. I think the closest analogies here are the economy itself. In the U.S., government economic policy continually focuses on building an environment for sustainable economic growth.

We want our economy to grow but not so fast or so slow that we have under-employment one year and then over-employment the next. So, we have collectively decided that we want our government to take an active role in managing the state of our economy. OSS is not really much different. By having more organizations take an active role in the development and use of OSS, we should see more support for development and use and we should see features and quality levels accelerate to new levels.

We are now starting to see some of these signs with the profitability of Red Hat, the solid funding for OSDL, the use consortia announced for consumer electronics in Japan, the distribution consortia announced by India. There seems to be clear interest in making Linux distributions at the country level with government involvement.

Whoever may be looking at an OSS development investment should be looking at the economic dynamics of OSS – that it is perpetual, always improving, and always growing into new applications. Investments should be thought of as opportunities to join forces where interests align to accelerate development in a particular direction. The ROI analysis on making these types of investments should surely include the significant on-going costs associated with maintaining a proprietary software infrastructure. Perhaps the holy grail here is in aligning businesses and governments toward accelerating a desktop replacement for Windows using an OSS model. Linux on the desktop for U.S., European, and Australian business and government is something the author is actively working on.

What About the IT Industry and the Economy?

Now, we have mentioned the word profit in a few places above. What will the impact of the OSS movement ultimately be on national and world economies? In general, OSS will tend to continue to wring cost out of IT by allowing developers and users to continually stand on the shoulders of the giants that have come before us. Development is a big focus now but as the movement matures use may take the forefront with issues like configuration, transition strategies, hardware integration (as opposed to today’s hardware compatibility), and other types of non-development activities will mature largely in an open way and will continue to wring cost out of IT and information activities. When Sun’s CEO, Scott McNealy, claims IT costs can go down by 90%, it will not be with a company like Sun doing the same things Sun does today. We should be left with a minimal cost structure around the most popular hardware/software/network solutions while remaining IT expenditures will focus on custom software development and proprietary innovation in spaces that are outside the core of today's PC / cell phone / consumer electronic space.

As cost is wrung out, end users will see savings and expansion in the types of products, information services, and features in a wide array of technology and information industries. Stretched to its limit, this analysis would support a claim that a new user in Argentina might latch onto an OSS project through his or her use of Linux. That user later becomes a developer and contributes a code snippet that leads to software that enables the company who makes your car to virtually eliminate long distance phone charges. You end up saving $100 on your next car due to OSS software having to do with phones. Odd but certainly within the realm of possibility.

A Final Thought

To counter the "tragic outcome," Hardin suggested that humankind either evolve to understand the larger picture of the effects of multiple users acting on a common resource, or that the commons be managed and protected in one of two ways: through privatization of the commons or through government regulation of the commons.

Hardin preferred evolution to protection, but he knew that humankind was slow to evolve in such a basic way. Protection has proven to be the case, as we have needed laws to curb our tendency to destroy common resources. Perhaps OSS is an example of human evolution on some level coupled with or augmented by the Internet and the fortuitous economic attributes of software. It certainly seems that way to me.

More Stories By Paul Nowak

Paul Nowak first used Linux in 1995 while migrating from Sun to Linux at the University of Michigan. He used Linux in subsequent IT projects including web, telecom, telemetry and embedded projects and is currently CIO of a small professional association based in Washington D.C.

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