Who Owns Open Source?

Last week somebody actually asked me: "Does Red Hat own Linux?"

While trying to explain open source software licensing, I started to think about something even more important:

What does it mean to "own" something, anyway?

Does owning simply mean having legal title to something?

Or does it mean effective control of it?

Or, does it actually mean being able to derive economic benefit from it?

In most industries, especially capital intensive ones with high sunk costs (such as real estate, hotels, finance, and entertainment), there is a common practice of separating legal ownership from control and economic value. Investment partnerships or funds are formed to acquire assets, but control is vested in a small number of general or managing partners, and the economic benefits are divided up--usually to the advantage of those managing partners.

In fact, hedge fund managers, venture capitalists, LBO operators, movie producers, and real estate developers all share the same success secret: they are able to gain effective control and derive economic benefit from large amounts of assets without ever having to acquire legal ownership with their own money.

Viewed in this light, software is actually an anomaly: although it is a capital intensive industry with high sunk costs of development, legal ownership is not separated from control and economic benefits. In fact, in the software industry, we often have the exact opposite: legal ownership without control or economic benefit. Think about all the companies which invest huge amounts of resources in software development, copyright, and patent protection to obtain legal title to "intellectual property." Unless these companies can somehow become industry leaders, they are forever condemned to playing "catch up" to the standards someone else is setting, with very limited profit potential. A rather obvious example is all the non-Microsoft commercial office productivity suites out there.

Enter open source, which finally creates new opportunites for the software industry. Although someone may not "own" the intellectual property of open source software, he can nevertheless control its development through code contributions. He can also derive significant economic benefit from it by making it useable and beneficial to end users.

So who owns Linux? When viewed from this perspective, the answer is actually pretty complicated:

• All the contributors to Linux hold the legal title to their piece of the contribution.
• Linus and the active developers of Linux control the future of Linux.
• Red Hat, Novell, IBM, and the other packagers, distributors, and service providers of Linux derive significant economic benefits from it by making it useful for the end user.