Open Source Blog

"Roberto's contention - and in my experience it's a very plausible one - is that a franchising model could serve to provide such basic services at better price and quality than could the enterprise's IT staff," wrote Matt, explaining Reoberto’s idea.

"The vendor could take this services work itself, of course, but would achieve greater scale by setting up franchises to manage the work."

Compare that to this section from the FLOSS impact report:

"As an example of a more recent development in business models, which could provide a future scenario for SMEs in general even beyond the FLOSS sector is the Orixo network of mainly small and micro-enterprises in Belgium, France, Germany, Italy, UK and Switzerland specialising in massive mission-critical web server applications based around customising the FLOSS web server Apache and related Java/XML technology (such as Cocoon) for large users. Orixo works by each national SME member acquiring national customers and partners in other countries supporting each other’s clients."

While Orixo is not a franchise operation, it does suggest the potential of multiple national (or local) businesses teaming together with a common goal.

"This model allows each small firm to profit from its expertise for custom solutions, while drawing on a large base of pre-written software under FLOSS licences, and draw in addition on a large community of hundreds of individual developers spread around the world, including volunteers but also other similar small companies," adds the FLOSS report.

It makes sense that franchising could be applied to open source software rather than proprietary software if you consider the example of one of the world’s most successful franchise operations: McDonald’s.

All the elements that make up a McDonald’s are freely available, apart from the McDonald’s system by which the burgers are put together and the fries are cooked and the staff carry out their duties, and of course the trademarks and copyright.

Compare this with the range of open source stack providers (SpikeSource, SourceLabs) that have emerged in recent years.

All the software that is required to make the open source stack is freely available. The secret sauce is the manner in which it is assembled and tested and certified, as well as the trusted brand.

It could be argued that given the global spread of open source expertise, it is less important for an open source vendor to own their local representation in the same manner that proprietary vendors do, in which case the franchise system begins to make economic sense.