“A co-operative is a member-owned business structure with at least five members, all of whom have equal voting rights regardless of their level of involvement or investment. All members are expected to help run the cooperative.”
Small Business WA.
The co-op business model has fascinated me since doing some tech projects in the dairy industry in the deep distant past. The dairy co-ops empower collaboration of dairy farmers where the might of the collective outweighs that of each individually. As the collective, they’ve been able to establish massive processing plants, distribution lines, bargaining power, etc. The dairy co-ops are a sell-side collaboration.
By contrast open source projects like ONAP represent an interesting hybrid – part buy-side collaboration (ie the service providers acquiring software to run their organisations) and part sell-side (ie the vendors contributing code to the project alongside the service providers).
I’ve long been intrigued by the potential for a pure sell-side co-operative in OSS.
As we all know, the OSS market is highly fragmented (just look the number of vendors / products on this page), which means inefficiency because of the duplicated effort across vendors. A level of market efficiency comes from mergers and acquisitions. In addition, some comes from vendors forming partnerships to offer more complete solutions to a given customer requirement list.
But the key to a true sell-side OSS co-operative would be in the definition above – “at least five members.” Perhaps it’s an open-source project that brings them together. Perhaps it’s an extended partnership.
As Tom Nolle stated in an article that prompted the writing of today’s post, “On the vendor side, commoditization tends to force consolidation. A vendor who doesn’t have a nice market share has little to hope for but slow decline. A couple such vendors (like Infinera and Coriant, recently) can combine with the hope that the combination will be more survivable than the individual companies were likely to be. Consolidation weeds out industry inefficiencies like parallel costly operations structures, and so makes the remaining players stronger.”
Imagine for a moment if instead of having developers spread across 100 alarm management tools, that same developer pool can take a consolidated 5 alarm management products forward? Do you think we’d get better, more innovative, more complete products faster?
Having said that, co-ops have their weaknesses too.
What do you think? Could such a model work? Would it be a disaster?Read the Passionate About OSS Blog for more or Subscribe to the Passionate About OSS Blog by Email