|Visual notes taken by Annalena from MakerBot's presentation at Republica. http://annalenas.posterous.com/|
Open communities business models. Chapter 1: Open Hardware
Published on 03/15/2011 - Goteo
Contributors: Massimo Menichinelli
3. there is already a thriving community and business ecosystem where to find resources;
4. it is a mature and simple enough project.
The designs for the Arduino board are released under the Creative Commons license Attribution-Share Alike: you can produce copies of the board, redesign it, or even sell boards that copy the design without paying a license fee or even ask permission (you just have to credit the original Arduino group and use the same CC license). The only piece of intellectual property the team reserved was the name Arduino, which is trademarked: if you want to sell boards using that name, you have to pay a small fee to Arduino (this is set in order to make sure the Arduino brand name isn't hurt by low-quality copies).
Clive Thompson on Wired reported two different business models for Arduino (and other Open Hardware projects):
1. sharing open hardware to sell expertise, knowledge and custom services and projects around it;
2. selling the hardware but trying to keep ahead of competition with better products (users will buy your products because are better than the copies, but the copies will help your products become more famous).
Clive Thompson (Wired) concluded that Open Hardware is a sign that hardware is becoming a commodity and that it still has not clear business models: it's possible that open source hardware will not compete with the for-profit world but will instead fill niches otherwise ignored.
The Market for Open Hardware
In May 2010 Philip Torrone and Limor Fried collected 13 examples of companies that are selling open source hardware: according to them, these companies, generate a turnover of about $ 50 million and there are currently about 200 open source hardware projects of this kind. They project the open source hardware community to reach $ 1 billion by 2015. Adafruit, Arduino, Chumby and Liquidware have each one $ 1 million in revenue, and Torrone and Fried estimated them to reach a $ 5 million revenue soon (while many other companies will reach a $ 1 million revenue). Sparkfun alone has even a $ 10 million revenue.
In January 2010, Joseph Flaherty calculated that the MMakerbot (an open hardware 3D printer produced by a 3-person firm) has a revenue of $ 1,350,000-1,710,000 (1,800 * $ 750-950). The industry leader Stratasys (which uses a FDM technology similar to MakerBot) had a total revenue of $ 124,500,000 in 2008, but with a considerably bigger firm and more R&D investments. And MarkeBot has just opened a retail store in New York called the Botcave.
Business Models for Open Hardware
Khatib proposed four business models for Open Hardware companies; later Edy Ferreira y Stoyan Tanev further expanded these to seven business models. According to Edy Ferreira and Stoyan Tanev, there is little research on the types of business models specifically related to Open Hardware, just like there is no consensus on the definition of Open Hardware itself as well.
The open asset is different from the ultimate market offer, the manufactured hardware device itself, and hence the problems with the adoption of existing Open Source business models. Ferrera and Tanev examined 4 companies, 88 market offers and 93 Open Hardware projects, and then identified seven business models for Open Hardware: