Last week, I wrote about open source as a software business model. The general consensus is that pure open source doesn't happen much in the software business anymore. Companies have found that they must introduce proprietary elements or services into their open source offerings to make a profit.
But what about open source as a business model for hardware? Last week's Wired included a fascinating -- albeit lengthy-- article by Clive Thompson on that very subject. Thompson highlights the work of three groups of inventors that have published the schematics and specifications for their devices online and encouraged others to copy them, produce the devices, and even sell them for profit.
How then, Thompson asks, do they ever make money?
Arduino, which designs and builds an open source circuit board, releases its documentation under a Creative Commons Attribution-Share Alike license, sells the boards for a small profit, which is turned over for the next production cycle. But its engineers also earn big bucks consulting for companies that use its circuit boards in their own devices.
Others who design and build open source hardware sell their devices and try to stay ahead of the competition in terms of functionality or quality -- or both. One means of doing so is to share resources with for-profit corporations. Take, for instance, the Linksys WRT54G wireless router. Thompson says:
Hobbyists quickly discovered that its firmware -- the software that determines the device's abilities -- was based on Linux and thus legally open source. Within months, hackers had written new code that gave the device radically new features: They boosted the antenna power, turned it into a signal repeater, and constructed self-healing neighborhood mesh networks. Most of these capabilities are normally found only in devices that cost 10 times as much. Suddenly, the WRT54G market expanded.
Finally, there are open source hardware inventors who are more concerned with filling gaps left by commercial shops than they are with competing. Such is the case of David Rowe, who designed and built low-cost, high-quality telephone routers for the developing world. After he published the specs for his router online, a community grew up around the effort, and the volunteer developers were able to help him troubleshoot the device as well as suggest improvements.
Is hardware the next open source business opportunity, perhaps?