Open Sourcing Software in a Large Corporation?

code-libre asks: "I work for a small R&D group in a large corporation. We've spent the past few years developing a small but unique piece of software that was originally meant for internal use only. A VP recently approached us and asked if we could 'package and sell' the software so as to get a direct return on investment - at prices as much as $500k. Within our group, we worry about the costs associated with long term support and maintenance. We are also sure that a price over $10k is ludicrous, let alone $500k. I think it would be an excellent move to open source the software, but I need some advice..." "Even at a price of $10k, we don't expect to sell more than maybe 20-50 licenses. Costs associated with producing this software thus far are approaching $2mil, so we doubt our costs would be recouped. It is thus relatively easy to make the case that we _shouldn't_ sell the software.

On the other hand, it is software that will be vitally useful to those in the right markets. I would like to present the idea that releasing the software for free (and open source) will have two effects: one, branding the software turns it into a free piece of advertisement for our company in emerging markets. Two, open sourcing it will allow for others to help improve the software, which we in turn can use to our advantage - an indirect ROI.

Will points like this fly at a large corporation with little to no policy on giving stuff out for free? How can I convince an older generation of business leaders that FOSS is the way of the future? Ideally, I would like to help the company setup a internal group that could expedite small internal projects to the market place via FOSS routes. Any one have any experience with this?"

Comments

not a strong economic case

[rnd()]

The main economic cases for open sourcing the software are:

- the community will provide "free" maintenance to it
- your company can provide expert support for it, for a fee

You mentioned that you have qualms about the second one, and so the question is whether the VP will value the potential savings in maintenance costs enough to give up whatever competitive advantage your firm gains by keeping the software to itself.

I would suggest that you start by advocating opening up parts of it, perhaps under a BSD style license. Attempt to get your VP or someone else to try to get someone like IBM on board doing the support and possibly remarketing parts of it to their business/consulting clients. Of course, I have no idea what kind of software this is or how modular it is, so it may be all or nothing... still, I think that a partnership with a software/services firm that is open source oriented would make a lot of sense.