Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-23T03:29:39.488Z Has data issue: false hasContentIssue false
  • English
  • Français

Does Open Source Hardware Have a Sustainable Business Model? An Analysis of Value Creation and Capture Mechanisms in Open Source Hardware Companies

Part of: Innovation Engineering

Published online by Cambridge University Press:  26 July 2019

Zhuoxuan Li  and
Warren Seering

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

Analyzing value creation and capture mechanisms of open source hardware startup companies, this paper illustrates how an open source strategy can make economical sense for hardware startups. By interviewing 37 open source hardware company leaders, 12 company community members as well as analyzing forum data of 3 open source hardware companies; we realize that by open sourcing the design of hardware, a company can naturally establish its community, which is a key element for a company's success. Establishing a community can increase customer perceived value, decrease product development and sales cost, shorten product go-to-market time, and incubate startups with knowledge, experience and resources. These advantages can compensate for the risks associated with open source strategies and can make open source design a viable product development strategy for hardware startups.

Keywords

Open source designOpen innovationEntrepreneurshipBusiness models and considerations
Type
Article
Information
Proceedings of the Design Society: International Conference on Engineering Design , Volume 1 , Issue 1 , July 2019 , pp. 2239 - 2248
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© The Author(s) 2019

References

Aitamurto, T., et al. (2013), “Three layers of openness in design: Examining the open paradigm in design research”, Proceedings of the 19th International Conference on Engineering Design (ICED13), Design for Harmonies.Google Scholar
Asta, S., Thomas, J. and Tim, C. (2012), Open Design Consulting How to Capitalise on and Adapt to Open Source Practices for Tangible Products. Technical Univerisity of Denmark.Google Scholar
Bonaccorsi, A., Rossi, C. and Giannangeli, S. (2004), “Chapter 1: Introduction - HPMS Field Manual - Highway Performance Monitoring System - Policy Information - FHWA”, The 26th International Conference on Software Engineering, (Icse 2004), pp. 1–25.Google Scholar
Bonaccorsi, A. and Rossi Lamastra, C. (2003), “Comparing motivations of individual programmers and firms to take part in the open source movement. from community to business, knowledge,” Technology &Policy, Winter 2006, Vol. 18 No. 4, pp. 40–64Google Scholar
Bonarini, A., et al. (2014), “R2P: An open source hardware and software modular approach to robot prototyping”, Robotics and Autonomous Systems, Vol. 62 No. 7, pp. 1073–1084.Google Scholar
Bonvoisin, J., et al. (2017), “Current state of practices in open source product development”, 21st International conference on engineering design (ICED17), August, pp. 26–28.Google Scholar
Bonvoisin, J. and Boujut, J.-F. (2015), “Open design platforms for open source product development : Current state and requirements”, In International Conference On Engineering Design, Proceedings of the 20th International Conference on Engineering Design (ICED15). pp. 1–10.Google Scholar
Bowman, C. and Ambrosini, V. (2000), “Value creation versus value capture: Towards a coherent definition of value in strategy”, British Journal of Management, Vol. 11, pp. 1–15 (2000)Google Scholar
Crowston, K., et al. (2012), “Free/Libre open-source software development”, ACM Computing Surveys, Vol. 44 No. 2, pp. 1–35.Google Scholar
Edwards, W. (1954), “The theory of decison making”, Psychological Bulletin, Vol. 51 No. 4, pp. 380–417.Google Scholar
Fjeldsted, A., et al. (2012), “Open source development of tangible products”, Conferece of NordDesign 2012, pp. 1–9.Google Scholar
Germonprez, M., et al. (2016), “Engagement with open source communities a theory of responsive design : A field study of corporate engagement with open source communities”, Information Systems Research, Vol. 28 No. 1, pp. 64–83.Google Scholar
Gibbs, A. (2014), Building Open Source Hardware 1st ed., Addison-Wesley. Available at: http://ptgmedia.pearsoncmg.com/images/9780321906045/samplepages/9780321906045.pdfGoogle Scholar
Gompers, P. and Lerner, J. (2001), “The venture capital revolution”, Journal of Economic Perspectives, Vol. 15 No. 2, pp. 145–168.Google Scholar
Griliches, Z. (1990), “Patent data as economic indicators: A survey”, Journal of Economic Literaure, Vol. 28 No. 4, pp. 1661–1707.Google Scholar
Haeussler, C., Harhoff, D. and Mueller, E. (2009), “To be financed or not - the role of patents for venture capital financing”, Discussion Paper No. 09-003 Center for European Economic Research. To Available at: http://www.sciencedirect.com/science/article/pii/S1062976997900594.Google Scholar
Hellenes, Ø. (2016), The Impact of Social Capital on Entrepreneurial Activity in Makerspaces, Hackerspaces and Fab Labs. Master Thesis. Norwegian University of Science and Technology. Available at: https://brage.bibsys.no/xmlui/handle/11250/2433794.Google Scholar
Von Hippel, E. (2001), “Innovation by user communities : Learning from open-source software”, MIT Sloan Management Review, Summer 2001 pp. 82–86.Google Scholar
Iansiti, M. and Richards, G.L. (2006), “The business of free software: Enterprise incentives, investment, and motivation in the open source community”, Harvard Business School Working Paper Series, No. 07-028,Google Scholar
Jaspers, A. (2014), Understanding the Motivations of Open-source Hardware Developers: Insights from the Arduino Community. Master Thesis, Universidade Católica Portuguesa.Google Scholar
Kraft, B. (2016), “Open source : The thinking man's venture capital?”, Available at: http://www.citizentekk.com.Google Scholar
Krishnamurthy, S. and Krishnamurthy, S. (2003), An Analysis of Open Source Business Models.Google Scholar
Lage, L. (2015), “Why do firms patent – or not? The business case of software patents, with emphasis on SMEs and implications of the European patent reform”, Master Thesis. Aarhus School of Business and Social Sciences, Aarhus University.Google Scholar
Lepak, D., Smith, K. and Taylor, S. (2007), “Value creation and value capture: A multilevel perspective david”, Academy of Management Journal, Vol. 32 No. 1, pp. 180–194.Google Scholar
Li, Z., Ramos, J.D. and Yang, M. (2017), “Why open source? Exploring the motivations of using an open”, In Proceeding of IDETC-CIE American Society of Mecanical Engineering 2017. pp. 1–9.Google Scholar
Malinen, T., et al. (2011), “Community created open source hardware: A case study of eCars - Now!”, First Monday, Vol. 16 No. 5, pp. 1–8.Google Scholar
Mann, R.J. (2006), “Commercializing open source software: Do property rights still matter”, Havard Journal of Law and Technology, Vol. 20 No. 1 Fall 2006Google Scholar
Mcgrath, R.G. (1999), “Falling forward”, Real Options Reasoning and Entrepreneurial Failure., Vol. 24 No. 1, pp. 13–31.Google Scholar
Mellis, D.A. and Buechley, L. (2011), “Scaffolding creativity with open-source hardware”, Proceedings of the 8th ACM conference on Creativity and cognition - C&C ’11, p. 373.Google Scholar
Moritz, M., Redlich, T. and Wulfsberg, J.P. (2016), “Value Creation in Open-Source Hardware Communities : Case Study of Open Source Ecology”, 2016 Proceedings of PICMET '16: Technology Management for Social InnovationGoogle Scholar
Osterwalder, A. and Pigneur, Y. (2009), Business Model Generation, Edition 1st, Produced by Patrick van der PijlGoogle Scholar
Pearce, J.M. (2013), “Commentary: Open-source hardware for research and education”, Physics Today, Vol. 66 No. 11, pp. 8–9.Google Scholar
Pearce, J.M. (2017), “Emerging business models for open source hardware”, Journal of Open Hardware, Vol. 1 No. 1, pp. 1–14.Google Scholar
Ritter, T. and Gemünden, H.G. (2001), “Value creation in buyer–seller relationships - Theoretical considerations and empirical results from a supplier's perspective.pdf”, Industrial Marketing Management Vol. 30, pp. 365–377Google Scholar
Shanker, A. and Covey, S. (2012), “A customer value creation framework for businesses that generate revenue with open source software”, Technology Innovation Management Review, (2012 March), pp. 18–22.10.22215/timreview/534Google Scholar
Tellis, G. and Peter, N.G. (1996), “First to market, first to fail? Real causes of enduring market leadership”, MIT Sloan Management Review, Vol. 37 No. 65–75.Google Scholar
Turner, S. (2015), “Open-source software business models that create value”, Journal of Management and Marketing Research, Vol. 18, pp. 1–25.Google Scholar
Wasserman, T. (2009), “Building a business on open source software”, Unpublished Paper. Available at: http://works.bepress.com/tony_wasserman/3/Google Scholar
Weber, S. (2004), The Success of Open Source, Harvard University Press, Cambridge, MA, 2004. Available at: http://libproxy.mit.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&AuthType=cookie,sso,ip,uid&db=cat00916a&AN=mit.001264781&site=eds-live.Google Scholar