4. 2. 3  Empirical studies

In "Business models in FLOSS-based companies", Carlo Daffara describes an empirical study of business models based on the use of free software, undertaken in the context of the FLOSSmetrics project. The study also examines how these models handle the marketing of their products and what licences they use.

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For more information, see:

http://opensource.mit.edu/papers/OSSEMP07-daffara.pdf

The study started out with 120 companies, of which it eliminated those not considered to be based on FLOSS (free, libre and open source software), and those that only allowed access to the code to non-commercial users or which did not allow redistribution. It also eliminated companies that, despite making important contributions to free software projects, do not base their core business model on it (such as IBM, HP and SUN).

It selected a set of characterising features, such as licensing, products and services offered (installation, integration, training, consulting, legal and technical certification), types of contract (subscription, licence, or per-incident) and self-referential literature offered on their websites and information on their relationship with the community. Lastly, the data were collected and all non-significant variables were eliminated to obtain the following characterising variables:

Applying cluster analysis to the companies characterised by these variables, the study obtained six basic business models, and a seventh group that was analysed separately:

  1. Twin licensing:dual model of GPL and proprietary licence in order to sell to those who want to develop closed-source code based on the free product.
  2. Separate OSS and commercial products: sale of commercial products based on a free one.
  3. "Badgeware": brand protection; released products must keep original logo/authorship visible.
  4. Product specialists: creation of a free product and sale of services relating to it.
  5. Platform providers: selection, integration and support services, providing tried and tested platforms.
  6. Selection/consulting companies: generic services and analysts do not generally contribute to the community, since the results of the analysis and consulting are kept private.
  7. Ancillary markets: by way of example, SourceForge/OSTG generates most of its revenue from sales from its affiliate site, ThinkGeek. Although this model is not one of those characterised by the study (the limited number of cases in this category did not allow for extrapolation), it should not be underestimated as it is an important financing model.

The following table shows the results of the study.