On episode six of the podcast, we talked to Dirk Riehle, a professor of open source software at the University of Erlangen-Nürnberg. Before entering the world of academia, Dirk worked in the software industry for over a decade, including a tenure at SAP Research as the leader of their open source research group.
Through studying business strategies based on open source software, meeting with venture capitalists in Silicon Valley, and working with PhD students to turn research projects into startups, Dirk has deep knowledge of how companies can drive value with open source.
When there is already an established company dominating a particular market, Dirk says this value typically comes down to disruption:
“A software startup which has a good product for a large market, if they can show that they are able to have an open source based strategy where they drive adoption of their product with users, not customers yet... this will lead to more efficient sales and marketing than if you take a traditional approach.”
However, this disruption also means that the company will have to defer revenues. This leads to businesses striking a tough balance between keeping a version of the free and open technology from becoming out of date, and withholding some aspects so they are able to sell it and generate revenue. By taking the wrong approach when attempting to profit off open source, Dirk says that some companies come close to a situation where they are blackmailing their users.
“A much better way is to find something that you can recognize as a fair complement (to the software) where people understand, ‘well, we really have to pay them for that.”’
To find out what advice Dirk has for companies considering an open source strategy, and which exciting projects he is working on, listen to the episode on Apple Podcasts, Spotify or Google.
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