←From page 2

1.    Services (customization, consulting) over owned or third party Open Hardware.
2.    Manufacturing of owned or third party Open Hardware.
3.    Manufacturing of proprietary hardware based on Open Hardware.
4.    Dual-licensing: companies owning Open Hardware designs that are offered for use under either a GPL license or a proprietary license. The design does not contain any proprietary module.
5.    Proprietary hardware designs based on Open Hardware.
6.    Hardware tools for Open Hardware: companies selling the right of ownership of development boards for the testing and verification of hardware devices manufactured on the basis of the Open Hardware assets. The designs of these boards are entirely proprietary (another related example is Sparklelabs).
7.    Proprietary Software tools for developing Open Hardware.

Furthermore, there are three more business models for Open Hardware already implemented:
1.    Free service for building a greater user base: Adafruit created Adafruit Jobs Board as a marketplace for designers, makers, programmers, artists, engineers and companies who want to meet and work together. This is a free service, but in order to use the job boards users must be Adafruit customers.
2.    Partnership between Long Tail Open and Fabbing businesses: Ponoko has teamed up with SparkFun Electronics to enable its users to build custom electronics products combining Ponoko's laser cutting technology with a 1500+ strong electronics catalog from open source electronics supplier SparkFun.
3.    Funding Open Hardware projects for getting good Open documentation: In August 2010, Bildr offered to fund original user projects in return for good documentation: in this way it would have promoted a bildr user by showcasing his/her work and paying for the parts to construct it. In return, Bildr would have got more information for its wiki, blog and community under the MIT software license.


Manufacturing Open Hardware
But business models are just half of the issue of developing a thriving Open Hardware project: we should also focus on the manufacturing of the Open Hardware projects, a step that we don't find in Open Source Software. The value of manufacturers is in economies of scale: cheap high-quality objects or a superb shopping and support experience. But what about manufacturers of Open Hardware?

According to David A. Mellis most open-source hardware projects (including Arduino) seem not to have taken advantage of the distributed manufacturing models enabled by the open nature of their designs. Instead, we mostly see two conventional distribution models: centralized manufacturing (that makes the product available in many places, but increases the cost to the consumer) and artisanal production (this keeps the costs low because there's only one party profiting from a product, but at the same time it limits the product's availability).
Mellis suggests then to adopt a distributed manufacturing model: a number of smaller groups independently producing the same design for local distribution.

Significantly enough  Chris Anderson, in his "In the Next Industrial Revolution, Atoms Are the New Bits" article, suggested to manufacture Open Hardware projects in China using alibaba.com (until a complete distributed manufacturing ecosystem will be ready), the largest aggregator of the country's manufacturers, products, and capabilities. Alibaba.com doesn't aggregate only companies suitable for manufacturing Open Hardware projects, but it is an interesting company as well and it takes us directly to the Long Tail business models.

To page 4→