INF 5890: IT and management

April 3. 2013

Nils Christophersen

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This course vs. this lecture

• This course: IT and management within formal organizations• How to manage and organize?• How to align business objectives with technology under

scarcity and uncertainty?• Too little money and time and too few people in a rapidly

changing environment.• “Waterfall method” outdated – bounded rationality (Herbert

Simon• Trends towards decentralized modes...

• E.g. service-oriented architecture - SOA• E.g. scrum and agile methods

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This lecture

• This lecture: IT and management outside formal organizations

• Free and Open Source Software (FOSS) – a commons.• How does this work? Why are they doing it? Who owns

it?• Relationships to science - re Internet• How can organizations use FOSS? Business models?• Commons-Based Peer Production (CBPP)

• If you like this – take INF 5780 “Open source, open collaboration and innovation” in the autumn.

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What is FOSS?

• Free and open source software (F/OSS, FOSS) or free/libre/open source software (FLOSS) is software that is both free software and open source. It is liberally licensed to grant users the right to use, copy, study, change, and improve its design through the availability of its source code (Wikipedia).

• Examples of FOSS?

• FOSS is an example of a Commons (Norwegian allmenning): The term refers to the cultural and natural resources accessible to all members of a society. Others examples are natural resources (irrigation water, fish stocks) and common land.

• A commons may be subject to social dilemmas: competition for use, free riding and over-exploitation.

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Free software and open source

The four freedoms of the Free Software Foundation:

• Freedom 0: The freedom to run the program for any purpose.• Freedom 1: The freedom to study how the program works and change it to

make it do what you wish.• Freedom 2: The freedom to redistribute copies so you can help your

neighbour.• Freedom 3: The freedom to distribute copies of your modified version to

others. By doing this you can give the whole community a chance to benefit from your changes.

Open source - more elaborate definition. Main difference in the copyright licenses. What has copyright to do with this? There are strings attached.

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FOSS – the two camps

• Free software foundation: http://www.fsf.org/

• Linux - Ubuntu – open source software: http://www.ubuntu.com/

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Linus Torvalds in Athens, 2006

Linus' law: Given enough eyeballs, all bugs are shallow

Richard M Stallman asSt. IGNUcius, Oslo 2009

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Licenses

• To license or grant license means to give permission.

• License: an authorization (by the licensor) to use the licensed material (by the licensee) under intellectual property laws.

• Software including FOSS is (almost always) covered by copyright • Main FOSS licenses:

• General Public License (GPL) - “copyleft”• Berkeley Software Distribution (BSD)

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• Anybody can

• Companies do it

• Most interestingly here: Voluntary and informal communities consisting of peers do it

• Commons-Based Peer Production (CBPP)

Who develops FOSS?

Such communities are meritocracies first described by Steven Levy (1984) - “Hackers: Heroes of the Computer Revolution”. “Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race or position.”

Note the participation inequality – 90 – 9 – 1 rule!

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Our questions• Who owns it?

• Why are people in the communities doing it? Surprising to economists and social scientists.

• How does the self-organized meritocracies work (Benkler)?

• Projects – modular with sufficient granularity and heterogeneity

• Community – diverse group of peers with excess capacityself-select on voluntary basis. Community spirit!

• Integration and quality control – continuous peer review, iterative work, technical solutions, hierarchy through meritocracy. Low cost.

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Commons-Based Peer Production (CBPP)

Barn raising, Public domain, Wikimedia Commons

Tim Butters Wikimedia Commons

Traditional dugnad = “barn raising”

Knowledge

Yoachai Benkler, Wikimania 2011

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Implications I

• This approach has been tremendously inspirational• FOSS communities invented the mode of organization, the

technical tools to carry it out, and the legal framework

• Fostered by Web 2.0.

• Examples outside FOSS: Wikipedia and Open street map

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Encyclopedia: Wikipedia: http://www.wikipedia.org/

http://stats.wikimedia.org/ and http://en.wikipedia.org/wiki/Wikipedia:Statistics

Jimbo Wales, Wikimania 2011

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Maps: Open Street Map (OSM): http://openstreetmap.org/

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Don't forget the p2p foundation

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Not to forget: Not to forget: Mackay, 1841Mackay, 1841(a digression)

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Implications II

• Relationships to science - e.g. Internet

• How can organizations use FOSS?

• Business models• Cost reduction• Service, support and consulting• Direct cross subsidization• Freemium• Dual licensing

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Next part: Characterization of goods I

• Economical definition of goods: • Tangible man-made objects and natural resources• Intangible intellectual goods (e.g. scientific knowledge, literature,

music ans software)• Services (e.g. teaching, health care)

• Necessary resources for production: Financial capital, infrastructure, technology, and human resources

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Characterization of goods II

• Two “dimensions”

• Rival vs. non-rival – relates to scarcity or abundance

• Excludable vs. non-exludable – relates to access control

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Rival/non-rival goods

• A good is rival if its use or consumption by one person limits or affects its use or consumption by another person; otherwise it is non-rival.

• In practice often the degree of rivalness• Personal items: books, clothes, private property• Scarce resources: irrigation water, grazing fields

• Importance of technology

• Intellectual goods always non-rival

• A good may also be anti-rival• All gain from more users - Metcalf's law

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Excludable/non-excludable goods

• A good is excludable if someone has the right to regulate access to it; otherwise it is non-excludable.

• In practice often degree of excludability

• Measures: Physical barriers, secrecy and property right• IPR – Intellectual Property rights

• Technology may influence – e.g. file sharing of copyrighted material

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Characterization of goods III

Non-rival Rival

Non-excludable Public goods; e.g. plentiful and freely available natural resources; goods funded through public institutions – science, non-toll roads, policingGoods in the public domain Goods provided through CBPP (with a catch)

Common pool resources, irrigation water, grazing fields, atmospheric CO2 levels without quotas

Excludable Toll, subscription goods (toll roads, power supply) Intellectual goods under standard IPR

Private goods (personal items: books, clothes, private property)

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Exclusion through IPR

• Main instruments – patents and copyright• Others – trademarks, design rights, and trade secrets

• Patents and copyright – the basic trade-off

• Society grants creators time-limited monopolies to commercial rights to stimulate further innovation

• Goods become public when monopolies expire to promote general progress

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Patents and copyright

• Copyright covers expression (copying, distribution) of a work – not ideas

• Copyrights happen automatically

• Copyrights last 70 years after death of creator

• Patents cover ideas and the use of ideas.

• Patents must be applied for • and cost money – idea becomes

public

• Patents last 20 years

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Whereas Printers, Booksellers, and other Persons, have of late frequently taken the Liberty of Printing, Reprinting, and Publishing, or causing to be Printed, Reprinted, and Published Books, and other Writings, without the Consent of the Authors or Proprietors of such Books and Writings, to their very great Detriment, and too often to the Ruin of them and their Families: For Preventing therefore such Practices for the future, and for the Encouragement of Learned Men to Compose and Write useful Books; May it please Your Majesty, that it may be Enacted ...

Statute of Anne 1710- preamble

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Norway: Intrersting case: http://www.nb.no/bokhylla

US:Duration: Copyright Term Extension Act 1998 (Mickey Mouse Protection Act)

Excludability: DRM Digital Millenium Copyright ACT (DMCA) 1998 Stop Online Piracy ACT (SOPA), Protect IP Act (PIPA)