Open Source Startups: Synthesizing Competitive Strategies

“When I first got into technology, I didn't really understand what open source was. Once I started writing software, I realized how important this would be.” - Matt Mullenweg

Abstract

The objective of initial stage startup companies is to attain a stable, repeatable and scalable business model, but generally, startups suffer due to lack of tangible and intangible, financial and human resources. This can hinder the development of innovation processes within the company. It is very important for a company to strategize if they want to go with proprietary software or opensource software for their environments. This decision can be one of the most important as it decides the technologies associated hence deciding the future of the product and company. In this article we will examine how a startup company involving itself with the innovation process of an opensource project helps it gain competitive advantage over established companies. This article will provide insights to SMEs’ on how they can take an informed decision on choosing opensource for their businesses and how their contribution back to the opensource project can make a difference, hence aims at deepening our understanding of how startups can leverage opensource solutions to compete with the big players in the market.

Introduction

Startups play a key role in innovation processes creating various disruptive innovations and changing industries. According to the well-known definition by Steve Blank (2010) a startup is a company, a partnership or temporary organization designed to search for a repeatable and scalable business mode. Generally, through a startup new idea can be brought into the market or existing ideas can be implemented and transformed into an economically viable solution. To make this possible, it is important to know how startups can make use of open source softwares in their environments to bring down cost and add value by leveraging community to develop critical components is paramount to a wide array of people ranging from CEO’s to venture capitalists. Due to newness, start-ups suffer from a lack of variety of resources like human and financial resources which leads to a hindrance in the development process which then leads to a slowed growth for the company. Adopting open source can be the solution to reducing the cost of development in the initial stages while the community can help with different features when required. It can also help them in competing with established firms as the cost of using an open- source product is reduced when compared with its proprietary counterpart. From a general point of view, the startups can closely relate with open source. Open source research has followed various strands, demonstrating the multidimensional nature of the concept of openness. Many studies have examined the complex features of open innovation in using an open source tool, such as its level of openness; how easily can it be adopted; how the knowledge flows through the stakeholders and the number of innovation using open source practises that a company takes to fully make use of the open source technology. These were the key streams that we were able to identify through our research on the relevant literature available. Although several existing studies have examined the impact of partnerships and networks on the decision to launch a new venture and on the results of entrepreneurial processes, there is still a research gap in the mutual influence between start up management decisions and OI processes. Despite this, the results of this research field have hardly been analyzed.

How and whether star tups adopt OI practices and how they manage the flow of knowledge between different partner are still an unresolved issue. The aim of this article is to fill this gap through a review of the literature on startups and their ability to compete in the market using open source software. Also, open-source companies can also develop various features more efficiently, without spending much of its time, by leveraging the community and improving on their products. Such a mechanism can produce valuable knowledge for both company and the community. This article will also go into an Open source start up Docker, which sells “containerization” technology for software developers, is a good example of viral adoption by DevOps engineers, and is gradually tightening its grip on market where more-established vendors like VMware are competing. This article will help us understand how Docker has been able to take advantage open source to compete with the other big players in this business.

How Startups Compete Using Open Source Literature Review

Early in a technology firm’s lifecycle, most of the firm’s time and resources are dedicated to the design and development of its first product. This is known as the “honeymoon” stage for a startup. The entrepreneur can afford to be extremely flexible with goals and decisions. Once the firm begins to ship products and establishes a group of customers, it must devote a portion of its resources to the maintenance of those products through regular bug fixes and product updates (i.e., customer support). This is where they can get the advantage over their competitors by bootstrapping available open source products.

Start-ups also need to reduce expenditure, but they also need powerful technology tools to save them time, so they can focus on their core mission. A start-up can cobble together some IT tools cheaply, bringing in the machines they have and using the licenses they can scrounge up. But the integration and maintenance issues will consume their most valuable resource – time. Increasingly, startups are additionally virtual. Teams are distributed throughout a city, region, or the globe, suggesting that a hosted, virtual laptop presenting would be beneficial to assist them run a single integrated organisation wherever their people may additionally be. Startup nevertheless does not longer have a single devoted bricks and mortar facility, although they operate as a single crew with a full suite of collaboration equipment to assist getting the most out of actual time interactions. For example, the use of OS can enlarge the wide variety of proficient people that an enterprise can access to increase its offers.

In order to get our literature, we reviewed and analysed papers published on startups and OI various leading publications like Emerald and Elsevier’s Scopus and many more. The study was designed to produce a certain methodology for the review. The aim was to pick and analyse relevant papers, that dealt at the same time with each theme: start-ups and open source. Through this study, it absolutely was attainable to produce a description associated an analysis of the present body of data on the intersection between these 2 topics. During our article selection process, we also found that what exactly startups need due to which they focus all their attention on open source tools and software’s. These were: Powerful tools, time and money, or at least less bleeding of the little money they have.

In extension to the above literature, Docker is a great example of how startups take advantage of open source and open innovation to build up their reputation and consequently attract developers. Docker entered the open source ecosystem through an array of projects that continue to fuel the containerization movement, which are the Docker platform and other Docker products. If not all, most smart phones can run Google search engine smoothly. So does Facebook, Amazon and all the internet’s most popular services. To cope up with today’s technologies, this is the way How Startups compete using open source to build an apps that always serve a worldwide audience that expect an instant response. Whereas, running a software across thousands of machines is incredibly difficult, and running it separately as well as efficiently where each machine will consume unnecessary amounts of energy and money would be more difficult. Minds like Docker’s founder Solomon Hykes, who has created a new means of building internet-based software. Docker gives businesses a simpler way to run software with ultrahigh efficiency across hundreds, thousands, even tens of thousands of machines. Well, how Docker works, let us think of Docker as a shipping container for software.

Just like the traditional shipping containers which give us a standard pod we can transfer from boat to train to truck, Docker offers a standard means of moving software from machine A to machine B to machine C. If an app needs more computing power or some of the machines running it quit working, Docker provides a way of easily spreading to new machines. Having a software that works in different machines is extremely important in the age of cloud computing, where businesses run their applications across their own machines as well as machines rented from cloud computing services. The three biggest such services run by Amazon, Google, and Microsoft have embraced Docker. Sequentially, it does not mean that only big companies have such service but means SMEs businesses can also easily extend their applications into this practically unlimited pool of computer power. However, Docker is more than a means of shipment as it helps get the most out of each machine. Businesses can pack multiple containers onto any given computer, grabbing every bit of the machine’s resources. Well, an older technology called Virtual Machines (VM) provides the same solution where it helps divide a machine’s resources among multiple applications. But Docker helps coders design their How Startups compete using open source applications without worrying about the vast infrastructure needed to run them. Therefore, numerous businesses had already moved their sever applications from virtual machines (VM) to containers.

An example of a Startup used Docker (open Source)

Since Polcode benefited from Docker and seen its impact and advantages to make the company more organised, the team at Polcode decided to implement it in all their projects. The team was quite happy of what Docker provided which is a consistent development environment for all developers involved in a project. Consistent development environment means that they did not have to worry about the version of the programming language, dependencies management, database version, or server configuration since all of that is unified in Docker. When the team dealt with multiple projects, the unified development environment allowed them to reduce development time and cut costs. In addition, it ensued that Docker-based applications written in, for example, RoR or PHP, run on all machines and operating systems rather than just a few on which they have been developed. This eliminates the risk of a malfunctioning app due to a given machine’s configuration. Docker also extended the benefits to the Polcode’s clients where it allowed them to be more efficient and less dependent on externalities. Moreover, Polcode claimed that Docker let them work on more projects while allowing to deliver the same results. Docker is used because it makes controlling their development process much easier, which generates faster results for the clients.

Docker for startups

As startups, the user base may not exceed a couple thousand users or perhaps SMEs may run an internal app that only supports a few dozen users inside the company. In such cases, scalability is generally less essential as Docker known to provide scalability advantages to the bigger user base. However, startups can benefit from the ability of containers to simplify software testing and deployment by providing environment parity between development and production. Another advantage of containers is to build microservices apps that are more agile where it is not necessary to be a large company to benefit from agility. It is possible to reduce performance overhead and deploy thousands of microservices on the same server since Docker containers require a lot fewer computing resources than virtual machines. So, yes, startups and SMEs can benefit from Docker. They may not benefit from Docker’s scaling advantages, which are a significant part of Docker’s value, but they could migrate their applications to Docker to reduce cost and time.

Docker and Open Source Projects

Docker collaborates with the open source ecosystem through an array of projects that continue to fuel the containerization movement. They provide the necessary components and tooling that helps developers and IT operators build, ship and run their applications, anywhere. These open source project initiated by docker can as termed as Container components. There is a total of thirteen such container open source projects, whose source code can be easily be downloaded from GitHub. Developers use them as extension components to integrate them with the primary Docker code to give their applications already running Docker an enhanced functionality. This is turn improves the product’s quality, usability and time to market. In the last few years, millions of people worldwide have downloaded these container components which drove their business into the global digital economy by offering the only container platform to provide the choice, agility and security needed to usher in the new era of application computing.

Lately, organizations are under pressure to digitally transform their business but are constrained by a diverse portfolio of applications, clouds and premises-based infrastructures. These obstacles are unlocked with Docker that allowed organizations to use container platform that brings traditional applications and micro-services built on Window, Linux and mainframe into an automated and secure supply chain, advancing dev to ops collaboration. Therefore, Docker claimed that organizations reported a 300% improvement in time to market, while reducing operational costs by 50%. Inspired by open source innovation and a rich ecosystem of technology and go-to-market partners. A modern open source platform for all applications What makes Docker sustainable is the openness by giving developers and IT the freedom to build, manage and secure business-critical applications without the fear of information locking. It also enables developers to bring traditional and cloud native applications built on Windows Sever, Linux which increases productivity and reduces time. Therefore, the time it takes to bring application to market with the resources and solutions provided by Docker will be faster. Docker serves a vast majority of key players in IT industry from developers, business and IT operations.

Contribution

The theme of this review is relatively new: most of the papers were published after 2009; several papers are based on qualitative studies with a theory building purpose. This review of the literature represents the attempt to organize and refine the scientific knowledge related to the intersection between the startups and their success when it comes to being involved with open source. Based at the scope of this literature assessment, we found out that four fundamental types of actors can guide new marketers in commencing up open source involvement all along the startup lifecycle, which are: incubators, ventures capitalists, huge companies, and universities. Being able to manage the family contributors with the ones actors is a crucial competence for entrepreneurs. Consequently, “networking” ought to be part of all the schooling programmes for entrepreneurs. However, a better analysis of mechanisms and fine practices for dealing with these members of the startup ecosystem is needed. Consequently, startups should balance their portfolio of relationships accordingly.

Conclusion

Although proprietary software’s dominate most of the market today, open source projects are gaining popularity among major IT firms. By using an explicit method for the review we selected a set of papers, which cover the whole knowledge domain object of this study. Telling stories of how different companies developed their open source strategies have benefits to both practitioners and pattern authors. Most companies are studying and planning to substitute proprietary software with equally powerful opensource projects. Linux project How Startups compete using open source demonstrated that a revolutionary way of working like co-creation, volunteering and other non- traditional techniques could produce something powerful. These advantages of the community could be harvested by the startup by championing an open source project. But initially they could start by incorporating the most widely used projects within their environments and by contributing back to the project they could understand the dynamics of a community and learn how the entire project and community deals with various challenges along the way while incorporating new features to cater to their client’s needs.

Startups can also open parts of their code to the community to facilitate customers who act as designers to add new features and improvements to the project. Thus, gradually setting the standard and increasing the requirement for the product in the entire industry. Hence startups can leverage open innovation as a strategy to slowly but steadily gain an upper hand competing with the established players in the industry.

Future work should incorporate the common structures underlying various new organisations. This line of research can lead to new representations and give us a more methods and examples of startups successfully integrating open source into their daily use.

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