451 CAOS Theory 
A blog for the enterprise open source community
Vendor-led community projects? Don’t forget your hat
Matthew Aslett, August 1, 2011 @ 12:18 pm ETBrian Proffitt asked an interesting question last week with regards to the OpenStack project: ‘can a commercial vendor lead a project as openly as a foundation?’
It’s an interesting question, and one that is particularly prescient given the observed re-balancing of control and community.
In fact. we’ve previously cited OpenStack as an example of this shift towards community, given that it was designed to be more open than the alternative and the organisations behind it specifically chose distributed copyright ownership and a non-copyleft license, as well as a promise of openness in order to shift the balance away from vendor control towards community.
The project has not been without its controversial moments, but we have been bullish about the project’s success given that Rackspace does not plan any commercial licensing or products to generate revenue from OpenStack (although it is offering services and support for OpenStack via Rackspace Cloud Builders).
Additionally, while the common perception of vendor-led projects would suggest that there is a disjoint between vendor-control and collaborative development, there are clear examples of community projects led by a single commercial interest.
One of the primary examples of this is the Fedora Project, sponsored by Red Hat but maintained and driven by the community. While the Fedora Project has not been without tension, I think most people would agree that by and large it has successfully balanced control and community.
Fedora is also an interesting example given Brian’s question about whether a foundation is required to protect the independence of an open source project.
Red Hat announced in 2005 that it was to set up an independent Fedora Foundation, only to change its mind less than a year later.
One of the reasons behind the change of heart had to do with the complexity of setting up an independent 501(c)3 nonprofit organization – in particular the need to raise one third of its funding from public sources within four years.
Given the resources Red Hat commits to the project it was thought to be impractical that one third of Red Hat’s commitment could be raised from the public. For example, it was estimated that the Fedora Foundation would need to raise $750k a year to cover bandwidth costs alone.
This highlights something important about open source foundations: it is a lot easier to demand one than it is to set one up, whatever the theoretical advantages might be.
Comments (3) Categories: Business strategies
Hi!
501(c)3 is only one option open to a project. It is “only” an IRS tax status.
Like everything, start with the right question first: why do you want an independent entity? Typical answers might be to ensure organisational independence, to offer company partners the opportunity to write off their investment in the project, to give tax receipts to small donors, to ensure open governance of the project, to take ownership of copyrights and trademarks, or to provide a legal shield for project participants.
In most of those goals, you don’t need a 501(c)3. By-laws codifying the independence of operation and technical governance of the project are possible with any corporation, and if most contributions are coming from companies, a 501(c)6 might be a better (and easier to obtain) 501(c) fit. Like TDF, your non-profit might exist outside of the US, in which case the tax status wouldn’t be 501(c) anything.
All of these things are ways to provide a shield against a future change of heart of the primary sugar-daddy, and to provide all participants equal access to project resources like the trademark and code.
But even if there is an independent spin-off, if one vendor is providing the vast majority of resources for a project, they will continue to have the most control over the technical direction of the project. Just ask Symbian if an independent non-profit is a recipe for diversifying your developer base.
Dave.
Dave’s points are all excellent. He’s right — one doesn’t need an organization that is tax exempt in the US, one needs a neutral place for commercial entities to collaborate, and for individual developers to feel confident in the nature of the relationship between themselves and commercial players. Henrik Ingo has an excellent post on the numbers around community growth and foundations here:
http://openlife.cc/blogs/2010/november/how-grow-your-open-source-project-10x-and-revenues-5x
In a presentation last week at OSCON, Henrik presented updated numbers and raised the question of whether Rackspace has found a formula to enable a corporate led project to thrive the way foundation projects can:
http://www.oscon.com/oscon2011/public/schedule/detail/18910
Rackspace confidently thinks it has. But I remain skeptical. While Rackspace does not plan any commercial licensing or products to generate revenue from OpenStack — except of course a support revenue stream similar to Red Hat’s Network revenue stream — I want to see what happens when Rackspace begins receiving contributions from outside that change the way Openstack does things, i.e. threaten Rackspace “support” revenues. Committers control a project. Contributions (however well intentioned or robust) are merely contributions. People contributing to Opensolaris found this out the hard way.
Without a truly neutral place to contribute and in which to collaborate, I believe Rackspace will run into the same glass ceiling that other projects have wrt Henrik’s analysis, if indeed they don’t chase away the very partners that will make Openstack enormously successful ten years from now and not merely on its first anniversary.
I forgot to add:
This highlights something important about open source foundations: it is a lot easier to demand one than it is to set one up, whatever the theoretical advantages might be.
This is precisely why the Outercurve Foundation can be viewed as a Foundation-in-a-box.