Are Co-ops the Ideal FOSS Business Structure?

Free and open source software is a community affair. One would think it might be a perfect fit for a cooperative type of business entity. Businesses surviving and growing in virtue of FOSS ecosystems develop some interesting business models–the support and services model for example (though becoming increasingly common) relies on the collaborative efforts of, sometimes huge, communities of people as a basis for its existance. Another model that I once thought was pretty innovative came from Transgaming Technologies, which had this idea of letting users pay for a subscription to (among other things) vote on the company’s product roadmap (this was a while ago, I don’t know if they still operate this way). But in spite of these group collaboration and voice-of-the-people aspects, most FOSS-related companies operate in a pretty regular corporate fashion. I may be ignorant of some company out there that is already doing this, but I cannot think of any FOSS-based companies that have organized themselves as cooperatives.

Sure, there may be many differences between the operation of FOSS-based companies and their proprietary counterparts. For example, Linux distributors have all kinds of organizations, processes, and ways to facilitate community participation, which they not only rely on for their well-being but also put great effort into nurturing. Doesn’t this go hand-in-hand with the idea behind a cooperative? I thought Strategy+Business Magazine’s recent article, A Cooperative Solution, was incredibly interesting and enlightening on just how successful co-ops can be (perhaps I’m naïve–the scale, power, and apparent efficiency that some have, hadn’t dawned on me before). Not only did it explain, in-depth, how massive organizations like the Dutch Rabobank or Italian retail COOP thrive (sometimes even moreso than their traditional counterparts), it also focused on how beneficial the co-op structure is to its communities of participants.

Here is a quote from the article concerning thousands of people involved with Rabobank. I’ll make two points about it.

“The members of the bank took part recently, for example, in voting on whether to merge some of its branches. That is the kind of crucial decision usually made by top management. But at Rabobank, it was the focus of long debate among all the members. It took Rabobank’s central organization nine months, many personal discussions, and two general assemblies to build consensus throughout its vast constituency on the consolidation issue.”

First, doesn’t that sound similar to how things often take place in Free and Open Source Software communities? Second, while it may sound like it took a long time, the article later details why some of these group decision making processes, while on the surface sound like they’re hugely inefficient or time-consuming, end up actually making the company, as whole, much more lean and responsive down the road. The Strategy+Business articles explores these co-op features:

  • Consensual decision making
  • Better communication
  • Leadership development in the company and community
  • Long-range planning and experimentation
  • Opennes to learning best practices
  • The social dimension

The processes they evolve to facilitate these areas and the effort they put into doing things “right” in the first place, tends to flatten out all kinds of problems that other non-cooperative organizations face.

Co-ops greatest strength are their constituents. The co-op is, by nature, for the interest of its members and the communities those members constitute. So while a public company might, for example, have to constantly be on guard to increase its earnings every quarter and thus satisfy share-holders (who are likely to have motives outside the scope of what is good for the employees/communities affected by the company), a co-op doesn’t face that problem. Even though (as is the case of the co-ops profiled in the Strategy+Business article) they may be very successful, co-op money flows to its communities, to its own success.

Lastly, in Tim O’Reilly’s recent blog post, Four Big Ideas About Open Source, his second point concerns the way open source companies have an ability to change the rules of the game. I suppose I argued for this advantage too when I wrote about what I thought a Linux distributor should do to in order to gain the typical mass customer mindset for choosing an OS (change the whole rules of the game). Mr. O’Reilly said

“One of the most powerful things about open source is its potential to reset the rules of the game, to compete in a way that undercuts all of the advantages of incumbent players. Yet what we see in open source is that the leading companies have in many ways abandoned this advantage, becoming increasingly like the companies with which they compete.”

And he concludes that these companies should be Web 2.0 companies. Ok, that might be the case, I haven’t formed any intelligent or unintelligent thoughts on that yet. However, I can’t help but think that maybe this is a chance for the dispersed, open, development model to wed its counterpart in business, the co-op. It would certainly be unlike the competitors. I have a smirk on my face just imagining the article fallout that would happen with all the proprietary vendors crying “see, we told you FOSS is communism!”

Linux TCO with Eyes Open

IBM published an overview of two recent Linux TCO studies. One of the studies was done by the Robert Frances Group and the other by a group called Pund-IT Inc. Unlike another recent attention-getting study, these found the cost results were in Linux’s favour. I haven’t seen the actual studies so I don’t know much about the methodology they used but it seems one was done by surveying twenty companies regarding their application servers, while the other was an in-depth review of three specfic companies, each in a different industry. They concluded that the Linux deployments were significantly lower in TCO.

After the overview, the article provides an interview with the reports’ authors. One point that I thought was insightful came from RFG’s Chad Robinson. In discussing good and bad Linux deployments, he mentioned

“The people that go into Linux with their eyes open tend to be the most successful, because they don’t try to make Linux fit the old model. When you deploy Linux, it’s not enough to just to put a new operating system out there, because you’ve added an operating system to your mix, and that increases complexity. If you just drop Linux in as a replacement and you expect it to behave exactly the same way that your old operating system did, then you’re going to do a little worse than a little better.”

I think that makes a lot of sense. I frequently read articles that talk about advantages or disadvantages to deploying Linux, maybe whenever discussing these advantages or disadvantages there should also be a discussion on the ways these relate to and change the existing work environment. One might make a transportation analogy. Say, I have a car that I sometimes drive to work. Yet there is a cultural push to start riding bicycles instead. Perhaps this could be viewed as adding complexity because the roads must accommodate cars and bikes. However, when I ride a bicycle, I never go to a gas station to guzzle at the pump, it would be pointless (well if I was already feeling pointless I might make this a different story and have sip or two). The two different modes of transportation do not have the same requirements. The advantages of one (it reduces pollution and saves money) would be counteracted if everyone stuck to the same old, unnecessary model by guzzling gas from atop their bicycles. Quite a catastrophe.

A Real Year of the Linux Desktop–What’s Needed

They said it at LinuxWorld in Toronto a few months ago. They’ve buzzed it at analysts, and now the press is saying it to the public. Novell says this is the year of the Linux desktop, and I’m familiar with evidence showing gains in popularity for Linux. Yet, I disagree that this is the year. Nothing is happening this year to make it, specifically, the year of the Linux desktop and I’m going to hypothesize what could change that.

To me, there’s no contest, GNU/Linux systems have been offering more innovative, stable, easily productive, and pleasant desktop systems (KDE for example) for years. However, that’s not enough to move Linux to a place where it challenges the automatic momentum both Microsoft and Apple enjoy within the mindset of the general population (at least in North America–perhaps elsewhere this is different). The mindset of the user/customer environment is what is needed to turn it into the year of the Linux desktop–Novell isn’t making much of a dent in this regard.

Jem Matzen wrote why specialized systems as opposed to fancier eye candy would be a better answer to move in this direction (that’s my very over-simplified paraphrase). I appreciate that notion in part; I’d like to suggest something else though, something which I think would give GNU/Linux and FOSS applications a real poignant way to shift the public’s mindset toward their adoption. Even better, it’s a business model that could only, really work in its entirety within a Free and open source ecosystem. What I’m suggesting, is essentially like something James P. Womack and Daniel T. Jones recommend in their book, Lean Thinking, except applied within a FOSS ecosystem.

To catalyze the required mindset shift–and this may appear plain at first glance, let me flesh it out–if a customer could easily buy a computer system, stacked with the desired hardware, configured software, support expertise, update service, backup service, in addition to having automatic access to a range of web services (like music stores or VoIP services) optionally pre-setup, it would be a completely compelling solution. What’s so special? Don’t we see that from the likes of Apple or Dell? Not really. No company that I’m aware of actually does this to the degree I’m proposing but a GNU/Linux OS distribution is the one that would fit this model and allow it to work, now. I’ll continue by talking about what such a fictitious GNU/Linux solution provider would do and I’m going to refer to this fictitious company as Fictux.

A full computing solution should come from a company that pre-bundles everything its customers want, consistently supporting it, for the duration of ownership. It should not require anxious intervention from the owner when the owner desires a new component or new system, and the new system should have all data and applications from the old system installed, setup, and accessible upon delivery.

1) Getting the computer. It’s not impossible to find a company on-line that will sell a computer set up with Linux. There are some hardware vendors offering compelling Ubuntu and Linspire preinstalled systems. Every now and then you even hear about a big box store selling some Linux PCs. Some companies, like Dell, even let you pre-configure the hardware components to varying degrees. Fictux would make this selection easy, it would have pre-tested the hardware to be sure it all works together in combination with the applicable software. This is not a new idea but it must be combined perfectly with the rest of the service.

2) The right software, configured right. The system cannot simply be preloaded with a Linux distro! From the point-of-view of most average users, there probably isn’t a cognizance of getting anything extremely compelling from an OEM with Linux preinstalled, they might as well have Windows. Worse, getting a new system with the standard OS leaves too much effort to the user to seek and install all their desired applications (this is true of Windows, Macintosh, and Linux). Most standard Linux distributions get a running start (bundling thousands of apps) compared to Windows or Mac systems, but sometimes too many apps are a detriment. Worse is when the user gets apps targetting what s/he wants but they’re not necessarily the specific ones s/he wanted (say I want Kopete while my distro automatically gives me GAIM).

A long time ago, when I was a dedicated Mandrake (Mandriva) user, I remember suggesting (and I don’t recall if this was in a user forum, an e-mail, a comment form, or what) that they let users select every software package they want, in advance to downloading an installation ISO. Then the user could download a totally custom version of the distribution. That’s to say that Fictux would offer custom versions of its distribution, tailored to exactly what the user wants the instant the system is turned on. This must be done at the time of purchasing the hardware.

Could Microsoft or Apple get agreements, permanently ongoing agreements, from the thousands of potential proprietary software vendors a customer might want to have installed? Could Microsoft or Apple charge a humane price for such a system? It doesn’t seem plausible. However, a Linux-based manufacturer can do this because of its FOSS ecosystem.

If I was the customer, obviously over the computer’s lifetime I’d want to occasionally install something new, but currently when I, for example, install a Kubuntu system for the first time, I have to search through a package repository interface (though it’s an easily unified one) for whatever I want to install, then tell it to install–the consequence is that every time I set up a new computer with the operating system, I spend half a day just adding the applications I want and configuring them. Yet a Linux distribution is already a carefully selected collection of Free software applications, tied and tested together into a whole system. Why is practically every distribution offering its common system (sometimes there is a server or business version) and then asking the user to install all the options? Fictux would ask the options first and make the distribution, the user’s distribution. It could be an audio work-oriented distro, desktop publishing distro, file server distro, immediately upon powering on, and according to the user’s taste. Furthermore, and I’ll expand this when I get to backups, it should already be populated with the information about the user, his/her preferences, and files.

3) Provide the support expertise. Plenty of companies, especially in the open source world, have chosen a business model of providing support services. Why is this often an independent company from the hardware, software, or other services? Of course they’re not all independent companies, but Fictux, in providing each point I’m detailing here would also be the point of contact for any support-related issue. Software questions, hardware failures (even to the point of arranging pickup and delivery replacement service), possibly even in agreement with the ISP.

4) Manage the update service. If there is some sort of hardware recall, Fictux would be responsible. As new technology is available, Fictux stays on top of it and folds the new tech into its service. It’s got to preemptively know which hardware will best support new software and be able to let the user know, without requiring the user to research all kinds of options and configurations. I think the transparency of the many test releases in open source development might be especially helpful in this regard. As fixes for software bugs, security holes, and new versions become available, the company must manage these and make them simple for the user to be aware of and apply. This is essentially a no-brainer for Linux distributions, most of them already do this on the software side, it’s a matter of making this process as effortless on the hardware side. For example, current excitement is the Novell sponsored xgl/compiz combo. It requires certain graphics hardware. Fictux would offer this alongside its software update service so that the user immediately and easily understood what would be needed to get the latest fun features. Linux systems generally are able to support the hardware I throw at them (often more easily than Windows), though some exceptions stand out–as Linux systems gain in popularity, I expect this issue will continue to decrease.

5) Make the backup service easy and more useful than just a data backup. A number of different Internet-based backup services have been sprouting up, both for business and the regular home user, but these don’t interconnect as an integral part of the rest of the products and services I’ve mentioned for Fictux. Backing up data should come easily and automatically. It should be secure and accessible. But let it do more than just back-up data. It could be used for preconfiguring a system. Save all the configuration data throughout users’ computers’ lifetimes, even as new applications are installed. When it’s time to buy a new system, the customer won’t have to reselect all of his/her applications (like the first time) because it would already be known to Fictux. Even better, the computer system that the user receives would include all of his/her data, settings, bookmarks, etc. Many of these could even be imported from non-Linux systems at the first order. This would be like a dynamic “ghosting” system for companies that continually have to order new computers for employees. I’m sure there are vendors that already deliver similar services for large organizations but again, I’m not aware of a company that does it in conjunction with all of the rest of the items I’ve detailed and by scaling from one to hundreds or thousands of units.

6) Pre-setup web services. Deals used to come bundled by some manufacturers, months of AOL at a discount, just click the icon to activate it. Instead, allow the user to select the web services they use or would like to use (say VoIP services, on-line music stores, and even free services such as favourite Internet radio stations) in advance to receiving the computer, it would just be another configuration the company could easily arrange for its customers before the customers even start using their computers and more importantly it would allow Fictux to include the appropriate hardware to support these services (audio file player? headset?, etc.). It may be argued that these services are too vast to manage, but I think Fictux could find a way to bundle a service distribution in much the same manner it bundles the thousands of Free software applications in its repository.

Finally, as I said at the beginning, none of these ideas are necessarily new in-and-of themselves, they just haven’t all been offered together by one company. If each can be done by some company, why can’t they all be done by a single company? It should appeal from a business perspective because each provision of service or product helps the company further its sales effort within its own solution chain. The more important point, however is the customer/user. Each step of buying a computer, using it, managing to obtain and use software, hardware, and services, and finally, after a few years, buying a new one, is accompanied by anxiety, research efforts, and ultimately wasted time by the customer/user. A company should eliminate all of that extra effort. Most users only undertake these efforts because they have no choice (read, these steps themselves provide no value for the customer/user). As I mentioned in my second point, only a FOSS vendor can adequately offer such a solution. Furthermore I think a FOSS vendor would be especially suited to do the other steps well (such as the web services/hardware pre-configuration integration) because of its existing expertise in packaging complex and diverse software configurations.

A single vendor that can accomplish all of these steps would be offering something incredibly appealing for the masses (neophytes and computer experts alike) because it would be offering the only solution that is valuable from the start, with a minimum of wasted customer/user effort. I think this kind of solution would differentiate a company enough to challenge the automatic momentum Microsoft and Apple enjoy within the mindset of the general population. When it arrives, it might even shift the gradual gain in Linux adoption to a more pronounced, year of the Linux desktop.

Blog News Feed Versus Newsletter Usage

The Wall Street Journal Online has a short and slightly thought-provoking interview with Jakob Nielsen concerning newsfeeds and blogging.

I think the news feed reader is taking the place of both some browsing activity and some e-mail activity. People ought to be viewing blogging and news feeds not as the “extreme edge” mentioned in the interview but rather a notable shift in the way people discover and retrieve information from web sites.

Lee Gomes (the interviewer) asked why Nielsen prefers an e-mail newsletter over a news feed. It brought up a few points on the focus of a newsletter but Nielsen cautioned “Unless a newsletter is very good, people will just say, ‘Oh no, more information.’” And I find that to be my case. There are a few newsletters I like reading but the majority have too much garbage to wade through and simply clutter my e-mail inbox. I’m hesitant to subscribe to anyone’s newsletter now that I’m invariably offered the option during any web site registration. Over the years, site after site, has reinforced the notion that once I subscribe, the subscription will balloon into unwanted mail and it will be difficult to remove myself from the lists. Even when that’s not the practice, there is that suspicion. Abuses have made that impression the general state.

Many years ago I attended a conference held by a local phone company, which was trying to convince its corporate clients to build corporate web sites (and hence they needed fast Internet connections). The conference had a number of very informative sessions highlighting the benefits a web site could bring to a business. One of the points I recall, was how much emphasis they put on having a clear and easy sign-up page for a company newsletter. They made the case that a well-designed newsletter, would help a company stay in contact with its customers (of course that lends itself to all kinds of wonderful marketing activities).

Now I hear similar arguments for the business benefits of blogging. Except the nice thing about blogging and hence blog news feeds, is that the subscribing user has complete control over whether s/he subscribes to it or not (unlike what happens when you release your e-mail address to the clutches of some unfamiliar internal machinations of a company you probably have little reason to trust).

One last thing. On the conversational aspect of blogs (which seems to be, at least in part, commentary on who actually is reading/using them), Nielsen comments that it works for fanatics “…who are engaged so much that they will go and check out these blogs all the time.” I’m inclined to agree temporarily, but it is a shortsighted viewpoint if that is where it ends. True most people I know, haven’t got a clue what a news feed reader is much less a blog, though since I’ve been using these for a while, they’re familiar concepts and tools for me. However, all technology uses tend to be that way. When I went to the conference I mentioned previously, an e-mail newsletter seemed like something only a small percentage of the population would ever use. That changed. Now that I regularly use a news feed reader to read articles, I use my web browser less frequently. That is a major shift in the way I access Web content.