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Business Models in Free and Open Source Software in Developing countries

FOSS business models - An overview of capacity building programmes and material by it@inwent

This compilation of resources on "Business Models in Free and Open Source Software in Developing countries" provides an overview of capacity building programmes and training material of InWEnt related to FOSS business models (it@inwent). It also offers a selection of links and other external materials, related to FOSS business models and sustainable human development.

Introduction: FOSS business models, developing countries and InWEnt's approach

The use of Free and Open Source Software (FOSS) is not only becoming more and more common by companies and administrations worldwide, it is also becoming a method for innovative IT-companies to achieve higher turnover. According to studies, more than 60.000 companies are already building their businesses around the development of - and/or provision of service for - Free and Open Source Software in the European Union.

But, business models based on FOSS offer great potential for developing and transition countries as well, as the development and distribution of FOSS follows the principles of ownership, local value addition, empowerment and participation. Thereby, FOSS provides ample opportunities for the development of a local ICT economy, creation and transfer of ICT knowledge, legal use of software and access of poorer communities to ICTs. With more and more governments such as South Africa, Brazil and others promoting FOSS and becoming potential customers, more and more small and medium enterprises (SMEs) are discovering FOSS as a theme for building their businesses.

However, the corresponding increase in demand for competent ICT service providers has not yet been satisfactorily met. Therefore, InWEnt has focused in the past years on working with ICT associations, their members, ICT-training institutions, universities as well as other change agents of the ICT field to spread practical key knowledge on adapted business models in the field of Free and Open Source Software (FOSS) to small and medium IT enterprises (IT-SME).

Thereby, InWEnt has gathered a stock of expertise around networking, implementing, training and promoting of FOSS business models in a developmental context as well as an extended network of trainers and other stakeholders, which is shared in the following. "How to create innovative local businesses with FOSS" is the common theme of our approach.

If you have additional suggestions for material to be included here or if you would like to know more about InWEnt's work in this area, please contact us at:

http://www.it-inwent.org/e38/index_eng.html

Overview of Content:

Section 1: Overview of InWEnt Main Capacity Building Programmes, advanced trainings and training resources

1 ict@innovation: FOSS Business Models for Africa
1.1 "ict@innovation: Free your IT-Business in Africa!" - A set of Advanced Training Material on African Free and Open Source Software (FOSS) Business Models for IT-SMEs (2010).
1.2 "FOSS Business Models and Community Development", Tracks at pan-African conferences on FOSS Idlelo 3 (2008) and Idlelo 4 (2010)
1.3 FOSS Business Models for Sustainable Development - Presentation by InWEnt at conference "Free Knowledge, Free Technology", Barcelona (2008)
1.4. Open Source Software Perspectives in the Southern African Network it@ab, A report (2005)

2) FOSS-Bridge EU-Vietnam: FOSS Business Models for Vietnam
2.1 High Level Training Course on FOSS Business Models and Innovation Strategies for Trainers of SMEs (2008)

3) it@foss - Business Models for Southeast Asia
3.1 FOSS4SMEs - Toolkit and Guidelines on FOSS for Small to Medium Enterprises (2009)
3.2 "Asia Source II" and "Asia Source III": FOSS for SMEs and NGOs in Asia (2007 and 2009)
3.3 Linux Training as a Business (2007-2009)
3.4 FOSS@Work: Conference for Small to Medium Enterprises in the IT Industry with focus on Business Models (2006)

4) commons@ip - business models based on open innovation in Southern Africa
4.1 Freedom to innovate ! Article in D+C Journal on open innovation and the knowledge commons in the framework of business development in developing countries (2010).

Section 2: Selection of external training material and information

Section 3: BLOGS

Overview of InWEnt's Main Capacity Building Programmes and Trainings

1) ict@innovation: Business Models for Africa

1.1 "ict@innovation: Free your IT-Business in Africa!" - A set of Advanced Training Material on African Free and Open Source Software (FOSS) Business Models for IT-SMEs (2010).

"How can I build a sustainable business around Free and Open Source Software in Africa?" - In order to answer this frequently asked question by young African IT-business owners, InWEnt and FOSSFA are pleased to present "ict@innovation: Free your IT-Business in Africa! - a set of Advanced Training Material on African Free and Open Source Software (FOSS) Business Models for IT-SMEs". The open training material is part of the initiative ict@innovation, a partnership of FOSSFA (Free Software and Open Source Foundation for Africa) and InWEnt - Capacity Building International of Germany, funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).

Eight in-depth case studies of African IT-businesses and organizations who successfully make a business around FOSS give concrete avenues for FOSS business models that work in Africa and are condensed in an African taxonomy of FOSS Business Models. The material has been collaboratively developed by FOSS experts from Africa and Europe for use as training material for experts and executive staff from IT businesses in Africa, ICT-associations, their member organisations, ICT-training institutions as well as universities and their trainers.

Direct access to resources and a pool of trainers on "ict@innovation: Free your IT-Business in Africa! - a set of Advanced Training Material on African Free and Open Source Software (FOSS) Business Models for IT-SMEs" here:
http://www.ict-innovation.fossfa.net/

Download of training handbook "Free your IT-Business in Africa!" from ict@innovation website (pfd and odt as well as additional resources) here:
http://www.ict-innovation.fossfa.net/node/4252


Direct download of training handbook "Free your IT-Business in Africa!" from this site (pdf only) see bottom of page.

1.2 "FOSS Business Models and Community Development", Tracks at pan-African conferences on FOSS Idlelo 3 (2008) and Idlelo 4 (2010)

The programme ict@innovation aims at strengthening Southern and East African IT SMEs in their technical, innovative and business capacity with Free and Open Source Software. Therefore, the programme organized tracks on the issue of "FOSS business models" at the major pan-African bi-annual open source gatherings "Idlelo over the past years.

- At IDLELO 4, held in May 2010 in Accra, Ghana, ict@innovation organized a) a pre-conference training of trainers on African Foss Business Models and b) a roundtable on Successful case studies on African FOSS Business.

The Roundtable by project champions of the FOSSFA / InWEnt Programme "ict@innovation - Creating Business and Learning Opportunities with Free and Open Source Software in Africa" featured among others:

George Nyambuya, ict@innovation Africa Coordinator
Coley Zephania - Knowledge Broker, System Logic Consulting, South Africa
Keutlwile Leso - Business IT Professional Molemi NGS, South Africa
Majid Igangula - Igan's Computer Training Center, Tanzania
Arnold Pietersen , FOSS trainer, South Africa

For more information, see http://www.ict-innovation.fossfa.net/blog/%5Buser-raw%5D/ictinnovation-idlelo

- At IDLELO 3, held in March 2008 in Dakar, Senegal, ict@innovation organized a track about "Business Models and Community Development". The topics discussed in the track on business models included:

  • Free Software for a Free Africa (John 'Maddog' Hall, USA)
  • Economics of FLOSS business Models (Karsten Gerloff, UNU Merit, Netherlands)
  • Connecting and sustaining linkages between technical communities and business (Alex Gakuru, Kenya)
  • Business through FOSS - Open Source bundle for SME in Ethiopia (Thomas Rolf, GTZ, Project Leader on-e, ecbp, Ethiopia)
  • Business Models adopted by OPENWORLD (Dorcas Muthoni Gachari, Openworld, Kenya)
  • African FOSS Business Model - a Panel Discussion with Alex Gakuru. James Wire Lunghabo, Arnold Pietersen, Christian Roland and Dorcas Muthoni Gachari
  • Launch of InWEnt's new programme ict@innovation (Balthas Seibold, InWEnt, Germany)

1.3 FOSS Business Models for Sustainable Development - Presentation by InWEnt at conference "Free Knowledge, Free Technology", Barcelona (2008)
InWEnt was invited to give a presentation at the First International Conference on "Free Knowledge, Free Technology - Education for a free information society (July 15-17, 2008 , Barcelona, Spain). Balthas Seibold introduced InWEnt's work on FOSS Business Models for Development at the Panel discussion: "Free Software and business models".

Link to presentation "FOSS Business Models for Sustainable Development"

1.4. Open Source Software Perspectives in the Southern African Network it@ab, A report (2005)
This report by Patricia Cabero Tapia was elaborated in the context of the InWEnt-supported network "it@ab - the Southern African Knowledge Network on Information Technology in African Business”. It proposes general guidelines for the introduction of open source software (OSS) in the business portfolio of the African it@ab network taking into account research in the literature, the actual situation of the network and the results of a survey about this alternative.

Link to the report

Link to the webpage of the it@ab network

2) FOSS-Bridge EU-Vietnam: Business Models for Vietnam

2.1 High Level Training Course on FOSS Business Models and Innovation Strategies for Trainers of SMEs (2008)

FOSS Bridge "EU Vietnam" brings European and Vietnamese FOSS companies together to help Vietnamese enterprises not only to use FOSS products, but also to adapt free software to local needs and encourage them to contribute to the development of international Free and Open Source Software.

One of the trainings FOSS Bridge EU-Vietnam organized was "High Level Training course on FOSS business models and innovation strategies for trainers of SMEs" with a focus on potential FOSS Business Models for Vietnam.

The training material includes the following topics:

  • FOSS entering the global and local business world and ecosystems (evolution of communities, ecosystem, software market)
  • Open standards (lock-in strategies and aversion etc)
  • Global and local FOSS usage models
  • Emerging FOSS business models for developing countries (linkage between licence and models, windows of opportunity, incorporating FOSS in existing business models, added value etc)
  • FOSS based open innovation (non-linear processes, commoditization, modularity, open innovation, public incentives etc)
  • From FOSS tactics to enterprise strategy (revenue sources, business risks etc)

Link to training slides

(More training material is available at the Wiki, password can be obtained through Mr Balthas Seibold at balthas.seibold [at] inwent.org)

Link to the Wiki

Link to project website with information on joint business of twinned European and Vietnamese companies

3) it@foss - Business Models in Southeast Asia

3.1 FOSS4SMEs - Toolkit and Guidelines on FOSS for Small to Medium Enterprises (2009)

The "FOSS4SMEs - Toolkit and Guidelines on FOSS for Small and Medium Enterprises" provides an introduction to Free and Open Source Software (FOSS) for companies and business intermediaries in Southeast Asia with information on FOSS; the software catalog lists FLOSS solutions focusing on the needs of SMEs.

The guide is online here: http://fosstoolkit.iosnasean.net/index.php?title=Main_Page

3.2 "Asia Source II" and "Asia Source III": FOSS for SMEs and NGOs in Asia (2007 and 2009)

Asia Source III:
'* 150 representatives from Asian NGOs and SMEs gathered for open source camp
* Open source advocates discuss tools, business models, and communities
* Theme of Asia Source 3: Building Capacities and Empowering Humanity through FOSS.

While most technology conferences happen as swanky, slick, and well-rehearsed events, Asia Source 3 took the opposite track and ran a camp that was spartan yet spontaneous. From November 7 to 12, 2009, the training and networking event gathered 150 representatives in the Yen Center to discuss developments in open source, including suitable business models. For more information, see http://www.iosnasean.net/as3/index.php?title=Main_Page.

Asia Source II:
Over 130 IT professionals of non-governmental organizations (NGOs) and small and medium-sized enterprises (SMEs) from more than 27 countries gathered at Sukabumi, Indonesia for a nine-day Free/Open Source Software (FOSS) training camp called “ASIA SOURCE II” from 22-30 January 2007. The key objective was to promote the use of FOSS for social and economic development and to build a network of FOSS practitioners and trainers in Asia. The event featured numerous interactive workshops dwelling on FOSS and business opportunities such as:

  • "FOSS Business Models" - Afternoon session by Bona Simanjuntak and Sunil Abraham
  • Online strategies for marketeers - Afternoon session by Dina Mehta
  • How to spread the word on FOSS through training - Afternoon session by Balthas Seibold
  • Implementation and Migration - Morning track focussing on "Moving and NGO or SME from proprietory software to FOSS"
  • SME-in-a-box: prototype of selected FOSS software for SMEs - specialized session.

3.3 Linux Training as a Business (2007-2009)

This 10-day workshop aimed at certifying Linux-experts with the LPI-1 (Linux Professional Institute, level 1) certification and was organized in Hanoi, July 2007. Apart from certification, InWEnt and IOSN Asean +3 added 2 days on business models into the curriculum. In this way, the participants not only gained additional technical skills, but also gained perspectives on the ways FOSS can generate income. An example of this is the presentation Winston Damarillo held on Business Models, where he gives an overview about business opportunities for FOSS.

Link to presentation on "Business Models" by Winston Damarillo

3.4 FOSS@Work: Conference for Small to Medium Enterprises in the IT Industry with Focus on Business Models (2006)

In November 2006, InWEnt and IOSN Asean+3 organized the foss@work conference. This event aimed at raising awareness for "FOSS Business" and assisting in the acceleration of FOSS adoption by networking IT SMEs. Developers, senior IT staff and IT-decision makers came together to discuss FOSS business models, FOSS architecture and community management skills. foss@work produced numerous results on FOSS business models in Southeast Asia, such as the presentation "FOSS is Ideal for SMEs " by Patrick D. Reidenbach.

Link to a summary of the session "FOSS is Ideal for SMEs" by Patrick D. Reidenbach

Link to program information

Link to Conference Wiki

4) commons@ip - business models based on open innovation in Southern Africa

4.1 Freedom to innovate ! Article in D+C Journal on open innovation and the knowledge commons in the framework of business development in developing countries.

Germany's international Development + Cooperation Journal (D+C ) published an article in its edition 2010/04, which looks at open innovation and the knowledge commons in the framework of business development in developing countries. The piece argues, that innovation is key to private sector development, and gives a background on the topics of the InWEnt initiative commons@ip.

-Read the full article online at D+C online at http://www.inwent.org/ez/articles/169283/index.en.shtml.

- For more information on the programme commons@ip, see the website.

Selection of external training material and information

The following section consists of a selection of links and other external materials, which target the three areas of FOSS business models, capacity building and sustainable human development.

For more references and up-to-date links, see the wiki of ict@innovation on "Selected Resources and Literature related to "Advanced African Free and Open Source Software Business Models". You are cordially invited to contribute to that set of references by adding to the wiki.

________________________________

InWEnt / FOSSFA (2010): ict@innovation: Free your IT Business in Africa!

For info and references on Free and Open Source Business Models in developing countries, particularly Africa, see the following parts of the training handbook "ict@innovation: Free your IT Business in Africa!":
- Module 2: African Business Models: Case Studies,
- Module 1: Introduction to Emerging FOSS Business Models, and
- Module 5: FOSS Specific Business Knowledge and Skills

_____________________________________


Course book: Economic aspects and business models of Free Software (2010)

This course book by the "Free Technology Academy" is focused on the study of Free Software in relation with the private sector and related economic aspects. It analyses the software industry from an economic perspective: how it was affected by software licensed under free conditions and what is its potential for the future. On the other hand, the book looks at how to use Free Software in the private sector, from a development view but also in implementation and migration.

More information and download of the book (which is under a GNU Free Documentation License):
http://ftacademy.org/materials/fsm/5

FOSS Business Models for Developing Countries in Asia (IOSN White paper)

Rahul De gives an overview of FOSS and its possible use for application in business as well as different business models that emerge from it. The Indian based author focuses his introduction on Business Models in Asia and explains "Strategies for FOSS Market Segments" in developing countries.

Link to IOSN White paper


Good to Great FOSS: Learnings from Africa (Workshop paper)

Gunn, Allen 2008: Good to Great FOSS: Learnings from Africa, IDRC

In this article, Allen Gunn of Aspiration describes the challenges and opportunities for the expansion of the use of FOSS in Africa. His chapter on Business Models describes the findings of a workshop in Kenya in 2007.

Link to Gunn paper "good to great FOSS"


Researching ICT-Based Enterprise in Development Countries

Heeks, Richard 2008: Researching ICT-Based Enterprise in Development Countries: analytical tools and models, in: Development Informatics, Development Informatics Group

This text provides several analytical frameworks for studying ICT Business in developing countries. It aims to give researchers and entrepreneurs a conceptual business view on ICT companies operating in developmental countries. The topics described are not specific for FOSS, but put FOSS business models in a business developmental context.

Link to the publication



Southeast Asian edition of the "Free/Libre Open Source Software guide for SMEs"

"it@foss - Promoting Free and Open Source Software in Southeast Asia", a joint initiative of the International Open Source Network ASEAN+3 and InWEnt Capacity Building International of Germany, has built on related EU funded initiatives ("FLOSSMETRICS" and "Open TTT") to develop a Southeast Asian edition of the "Free/Libre Open Source Software guide for SMEs" under the label of FOSS4SME. Chapter 6 gives a very extensive overview of the different Business Models that SMEs can choose from.

Link to the publication


Business Models Based on Open Source Software (Research Paper)

Weerawarana, Sanjiva and Weeratunge, Jivaka 2004: Business Models Based on Open Source Software, in: Open Source in Developing Countries, p 24 - 26; Sida publishing.

Weerawarana and Weeratunge describe the general history of FOSS, as well as the possibilities they offer for developing countries. In this paper, they go into the perspectives of open source on the levels of government policy and development cooperation. Chapter 5 and Annex C go into business models for SMEs in developing countries.

Link to Publication


The Emerging Economic Paradigm of Open Source (Article)

Perens, Bruse 2005: The Emerging Economic Paradigm of Open Source

This article explains Free and Open Source Software within the capitalistic/free market paradigm. Perens takes on the view that FOSS is a viable economic alternative for proprietary software. Not only for end-users, but also as a way for SMEs to make a profit. In an easy to understand way he explains the different business strategies a company can choose from. In the chapter 'Who contributes to open source, and how do they fund that?', Perens describes the main actors within the FOSS economy and explains the way they operate their businesses.

Link to the publication


Seven Open Source Business Strategies

Koenig, John 2004: Open Source Business Strategies, Riseforth Inc.

Koenig describes strategies that companies choose to increase revenue. He explains these strategies with examples from big corporations for example: Amazon, Oracle, Google, Redhat and IBM.

link to publication


SELF Coursebook: Introduction to Free Software

self, 2008: Introduction to Free Software has been produced by self together with the Universitat Oberta de Catalunya (UOC) with a number of recognised authors on the subjects of Free Software. The book provides an introduction to the inspiring world of Free Software, covering its main concepts, some of the most successful free software projects, the specifics of their development and the legal basis that free software licenses provide for the protection of users' freedoms. It also contains a large directory of glossary, bibliography and links to help the reader explore deeper into this field.

link to publication

BLOGS

Below is a selection of Blogs on the subject of FOSS Business Models

Roberto Galoppini
http://robertogaloppini.net/

Fabrizio Capobianco
http://www.funambol.com/blog/capo/

Matt Asay
http://www.cnet.com/8300-13505_1-16.html

Suggestions

If you have additional suggestions for material to be included here or if you would like to know more about InWEnt's work in this area, please contact us at:

http://www.it-inwent.org/e38/index_eng.html


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