Monday, January 22, 2007

Did OSDL’s Business Model Fail?

As many people have reported, Open Source Development Labs (OSDL) and the Free Standards Group (FSG) are merging. I first learned about it from Andy Updegrove’s blog (imagine, a lawyer blogging at 6pm on a Sunday night). It is being presented as a merger, but (as with the Alcatel-Lucent or HP-Compaq "mergers") it’s obvious that the FSG is taking over the OSDL. And as Steven Vaughan-Nichols remarked, given their overlapping missions, "What took them so long?"

Only one of the articles that I saw, by Charles Babcock at Information Week, linked the merger to OSDL’s obvious financial difficulties, as evidenced by the last month’s announcement that its CEO had quit and it was reducing its staff by 30%. I don’t know if such a linkage is considered too subjective (aka “analysis” or “commentary”) or if the FL/OSS fans among the press feel obliged to only report good news.

[OSDL Tux logo]Which raises the question, if it couldn’t pay its bills, did OSDL’s business model fail? As I noted in 2004 (in a journal article that was finally published last year in R&D Management), OSDL is just an industrial R&D consortium whose results spill over to non-members more readily than for a typical consortium.

Any consortium — whether in the auto industry or one of Updegrove’s computer industry standards consortia — must serve the interests of its members to get the revenues necessary to keep the doors open. So if the OSDL consortium wasn’t supporting the business models of its members — or it was supporting the business models of an ever-decreasing number of members — then that would account for the financial problems.

Another possibility is mission creep, a chronic temptation for nonprofits that don’t want to go out of business. The best known example is the March of Dimes, which helped cure polio but switched to birth defects and prenatal health to stick around for another 50 years. So perhaps OSDL has accomplished its original mission — legitimating Linux — and it’s earned a well-earned retirement.

Absent inside information, right now I have more questions than answers. Perhaps an enterprising reporter will follow up.

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