Why is Open Source Software Viable? A Study of Intrinsic Motivation, Personal Needs and Future Returns

Traditional business models for software development are currently being challenged by the phenomenon of open source software where communities of programmers leverage the Internet to develop free software without receiving any direct compensation. To understand the success and the prospects of open source software it is necessary to examine the motivation of the participants in open source projects. This paper presents a theoretical model to study the three main factors leading to participation in open source projects: intrinsic motivation, personal need and expectation of future returns. Implications of the model are derived and their significance discussed. We conclude that open source software will be an enduring alternative to traditional software development and that it is possible to combine aspects of both development approaches. Challenging established business models In the past 30 years, software has become a major industry. Highly profitable software companies have emerged. All of these companies are based on the premise that software is a proprietary good. Although its reproduction and distribution costs are nearly zero, they regard software primarily as a private good which is the property of the “owner”. This traditional business model is now being challenged by the phenomenon of open source software. In contrast to traditional software, open source software is provided to the public for free. The user does not only have the right to use and run the software; its source code is also provided free of charge and the user explicitly receives the right to make modifications to the source code and to distribute these modifications. Open source software is typically developed by teams of programmers that collaborate via the Internet. In addition, these programmers do not receive direct compensation for their work. While this model of developing software which treats software essentially as a public good has a history that can be traced back into the 1960s (see Table 1), the phenomenon has received little attention from commercial developers or from academia until recently. The impact of these efforts seemed to be limited to what small bands of idealistic programmers can achieve. However, in the last years one open source project, Linux has matured sufficiently to reach the spotlight. Linux was written by Finnish student Linus Torvalds in 1991. He then released his source code to the public and received continuous support and updates via the Internet from programmers all over the world (Bollinger and Beckman 1999). Linux has rapidly increased its market share and drawn converts in many business. It is now actively supported by many leading software vendors including Corel, Oracle, SAP, IBM, etc. (e.g. Seltzer 1999). The number of installations is estimated to be over 7.5 Million (Comerford, 1999) and the stock market has placed high values on companies in the Linux space. Table 1. Open Source Timeline (Gonzalez Barahona, Heras Quiros and Bollinger 1999, Seltzer 1999, Comerford 1999)