Private sector push for India’s open-source challenge

Zerodha’s recent announcement to commit $1 million for open-source software is a shot in the arm for researchers. But India’s private sector needs to do more

The open-source movement is at a crossroads. On the one hand, Free/Libre and Open-Source Software (FLOSS) projects are increasingly forming the core of major tech companies globally, including in India; on the other hand, there is a crisis of funding and sustainability that is plaguing the FLOSS community.

It is against this backdrop that on Oct 15 Zerodha announced a $1 million annual commitment to fund FLOSS projects globally. With a minimum of $10,000 and a maximum of $100,000 for a single recipient, the applications for the FLOSS fund will be sourced globally and an interim internal selection committee will make the selections.

Apart from the quantum of money pledged, a highlight of Zerodha’s model is providing structure to discovering and supporting FLOSS projects in need. They have proposed a standardised funding.json manifest file that FLOSS developers could add to their project repositories or websites.

What funding.json does is that it makes some basic information regarding a FLOSS project, including specific financial needs, available in a machine-readable format that in turn enables operations such as crawling, indexing and cataloguing. 

While the initiative has an altruistic flair, Zerodha lays out the business case for this fund. Acknowledging that Zerodha has used and built upon multiple FLOSS products, such as Postgres, since its inception to become one of the largest stock trading platforms in India today, the company argues that it is only a logical business strategy to support FLOSS projects on which their existence depends.

Zerodha’s argument is supported by recent research from the Harvard Business School, which pointed out that if companies were to pay developers to build all software in-house, they would have to spend about $8.8 trillion; that is, “firms would need to spend 3.5 times more on software than they currently do if OSS did not exist”.

But when looking at FLOSS development from the supply-side, the cost of recreating widely used FLOSS software just once would be only $4.15 billion.

The ‘Techno-Strategic Doctrine for India’ developed by the Takshashila Institution notes that “[i]n order to protect its strategic autonomy in the technological domain, India will champion open technologies”.

Looking at FLOSS from an Indian national interest angle, there is a need for an approach that combines both strategic autonomy and ecosystem development. These funding models have evolved over the years, and include government-led models, public-private partnerships, corporate foundations, commercialised models and community-based models like professional associations and crowdfunding.

Government-led initiatives have majorly sustained FLOSS development in India, through agencies like Ministry of Electronics and Information Technology (MeitY) and the Centre for Development of Advanced Computing (C-DAC), particularly in areas like digital infrastructure, cybersecurity and public services.

With projects like DigiLocker and Unified Payments Interface (UPI), the Digital India initiative has proven the necessity of government intervention and backing. This funding model is particularly effective and necessary for projects that have a long-term horizon and serve essential public functions.

Making FLOSS sustainable

As Zerodha’s recent announcement shows, India’s private sector is now emerging as a dynamic force when it comes to FLOSS funding. They are subscribing to the concept of FLOSS dividends – that is, companies ploughing back a percentage of their revenue to the ecosystem in acknowledgement of the fact that they, too, benefit immensely from FLOSS. But the private sector needs to do more.

Different approaches to make FLOSS sustainable have evolved over time, from directly funding projects to establishing foundations and creating commercial enterprises around FLOSS products.

Examples of this include FOSSEE (Free/Libre and Open-Source Software for Education) supported by IIT Bombay and Dhiway building CORD (Company’s Open Resource for Decentralisation) as open-source infrastructure.

There can be models which combine FLOSS with premium support and hosting services, creating a virtuous cycle of commercial success feeding back into FLOSS development.

For smaller projects, community-based funding models, including professional associations and crowdfunding platforms, can be quite effective, like the programmes by the National Association of Software and Service Companies and other industry bodies.

This is a grassroots approach which can account for diversity of interests and specific needs rooted in the Indian context. Lean companies with less resources to spare and/or sector-specific companies (such as fintech) could come together to form a FLOSS foundation and jointly fund projects that advance mutual interests.

India’s private sector should also pursue international collaborations with global foundations such as Linux Foundation and Mozilla. They can be important providers of resources and expertise. Jio’s support for the Linux Foundation’s edge computing projects provides a model of how Indian companies can participate in global FLOSS initiatives while serving national interests.

As FLOSS is in India’s national interest, the government needs to institute ‘Digital Public Goods Tax Credit’, where companies get tax benefits and credits in return for maintaining essential FLOSS projects. Allowing for these tax credits to be traded over a ‘FLOSS Innovation Exchange’ will further incentivise the private sector to promote FLOSS development.

(The writers are research analysts at the Takshashila Institution)