In recent years many aspects of the software business have changed. Software companies have gone from producing software applications and selling their proprietary code to providing open source applications and focusing their business on offering services related to the adaptation, installation, and maintenance of that software, together with related training. Libre software companies use a business model which provides new opportunities in markets where proprietary software is not viable. In this article we describe an interesting business opportunity which is emerging for libre software companies: the software needs of developing countries. These countries are becoming an emerging market for development software, a market which is particularly interesting because, bearing in mind their special needs and constraints, they are a perfect are scenario for the libre software approach. Finally, we will also discuss the influence of a number of catalysts which are really having an effect on this target market

Martinez Mateo, Jesus

Muñoz Hernandez, Susana

Servicio de Coordinación de Bibliotecas de la Universidad Politécnica de Madrid

An Opportunity for Libre Software Companies: 
Emerging Market in Developing Countries 
Susana Munoz-Herndndez and Jesus Martinez-Mateo 
In recent years many aspects of the software business have changed. Software companies have gone from producing 
software applications and selling their proprietary code to providing open source applications and focusing their busi-
ness on offering services related to the adaptation, installation, and maintenance of that software, together with related 
training. Libre software companies use a business model which provides new opportunities in markets where proprietary 
software is not viable. In this article we describe an interesting business opportunity which is emerging for libre software 
companies: the software needs of developing countries. These countries are becoming an emerging market for develop-
ment software, a market which is particularly interesting because, bearing in mind their special needs and constraints, 
they are a perfect are scenario for the libre software approach. Finally, we will also discuss the influence of a number of 
catalysts which are really having an effect on this target market. 
Keywords: Business Opportunities, Developing Coun-
tries, Emerging Markets, Libre Software. 
1 Libre Software in Western Markets 
1.1 Why Fight the Market? 
It is a well known fact that free and open source soft-
ware1 will have a hard fight against proprietary software to 
make a space for itself in the western market. Some, per-
haps all, of the problems facing it are specific to this mar-
ket, one in which the traditional software business is well 
entrenched. However, there is a scenario in which this tribal 
culture can be avoided; in developing countries many of 
these problems simply do not exist. Generally speaking the 
development and roll-out of software in developing coun-
tries has a short tradition. This is a considerable advantage 
for the introduction and expansion of libre software into 
markets with more modern ideas regarding software [1]. 
1.2 The Ripeness of the Market 
There have been a number of cases of new technologies 
that have found it easier to break into emerging markets than 
into well-established ones. For example, towards the end of 
the 19th Century it was easier to enter the electric locomo-
tive market in places where the use of steam locomotives 
was not yet commonplace. A similar case today would be 
the use of mobile telecommunications in remote areas of 
developing countries without there having first been any 
previous landline infrastructure. In these countries, in the 
case of the industrial revolution, hardware, and communi-
cations among others, they have skipped a technological 
generation; so why not in the case of software too? Although 
1
 In this article we decided to use the term libre software in ac-
cordance with the definition provided by the Free Software Foun-
dation (FSF) rather than any of the other common, and certainly 
more popular, terms such as Free and Open Source Software 
(FOSS), or Open Source Software (OSS). 
Authors 
Susana Mufioz-Hernandez is a Doctor in Computer Science 
from the Polytechnic University of Madrid (Spain), with a 
Master in Information Technologies (IT) Management from 
the Ramon Llull University in Barcelona (Spain) and a degree 
in International Relations from the International Studies Society 
in Madrid. In 2003 she was awarded first prize in the national 
competition for young talent given by the La Salle University 
in Madrid. After several years of professional experience 
working in private companies, in 1998 she began to work as 
an assistant professor in the School of Informatics of the 
Polytechnic University of Madrid where she carried out her 
research activity within the BABEL research group. She is 
responsible for dissemination and communication for INES, 
the Spanish national platform for software and services. She 
set up the cooperation group Technology for Development and 
Cooperation (TEDECO) in 2006 and since then has acted as 
its director. Through TEDECO she leads the Morfeo-CODE 
initiative for the application of libre software to development 
cooperation in the Morfeo community. <susana@fi.upm.es>. 
Jesus Martinez-Mateo is a doctoral student of Computer 
Science at the Polytechnic University of Madrid. He holds a 
Master in Computational Mathematics from the same 
university. He carries out his research activity in the computing 
laboratory of the Numerical Analysis department as part of 
the Quantum Information and Computation research group. 
He contributes to a number of projects, including the Cenit 
Segur@ project funded by the Spanish Ministry of Trade and 
Industry for the study and design of a Metropolitan Key 
Quantum Distribution Network. He divides his time between 
his research work and the development of libre software (e.g. 
Lan Core) and he also participates in the TEDECO group, in 
which he is an active member, and has taken part in two field 
missions in Burundi. <jmartinez@fi.upm.es>. 
perhaps a better question would be: can libre software be 
the technology of the future in software development? The 
answer is probably yes, in which case history may repeat 
itself in the sense that proprietary software may be skipped 
in favour of libre software in developing countries. Under 
this scenario developing countries may become a serious 
candidate for the adoption of a national strategy at a gov-
ernmental level with regard to libre software, without hav-
ing first passed through the proprietary software phase. On 
the basis of this premise, some libre software communities 
[2] are currently realizing that there are growth and busi-
ness opportunities for them in these countries. 
1.3 Tradition or PCI (Progress, Change and 
Innovation)? 
The biggest problem regarding the use of libre software 
in major companies is that most of their applications have 
been developed using proprietary software. Tradition is a 
powerful disadvantage because software migrations may 
involve short-term investments, and companies are seldom 
convinced of the medium- and short-term advantages of 
migrating to libre software, or other products. However, in 
developing countries some institutions, organizations and com-
panies are just starting to use software applications [3]. In these 
cases, and for obvious reasons given that we are talking about 
developing countries, the budget for the purchase of software 
is considerably smaller than in developed countries, and there-
fore the acquisition of libre software is not an option but rather 
a necessity. Buying libre software is much more economical 
than buying conventional proprietary applications, which turns 
the traditional disadvantages into opportunities in the software 
markets of developing countries. 
1.4 Fair Trade 
Fair trade is an organized social movement and market 
approach that aims to help producers in developing coun-
tries while promoting sustainability. Fair trade is not only 
prestigious from a moral standpoint but it is also profitable. 
In 2007, fair trade labelled goods recorded sales amounting 
to around 2.3 billion euros worldwide (USD 3.62 billion), a 
year-on-year increase of 47% . 
There has been a debate in a specialized forum on the 
similarities between libre software and fair trade [4]. This 
debate was sparked by a presentation by Matthew Edmonson 
of the Open IT Up proj ect which he gave in the United King-
dom at a conference for circuit riders. In fact there are quite 
a number of similarities, bearing in mind that both involve 
choice and a concern for people. James Davis says that as 
libre software users we expect to be granted the freedom of 
doing whatever we want with our software, provided that it 
does not prevent others doing whatever they want with our 
modified software. 
While we are not entirely in agreement with this state-
ment (since we see a number of substantial differences be-
tween libre software and fair trade [5]), being compared in 
a public debate with such a prestigious enterprise as fair 
trade is a very positive point in favour of libre software. 
2 Libre Software Catalysts in Developing Countries 
2.1 ICT in Developing Countries 
Far from the old concept of cooperation, which was 
much more akin to charity, in the last five years coopera-
tion projects have been oriented towards the development 
of receiving countries. As well as the traditional fields of 
cooperation (public health, education, and the supply of 
food, among others) there are new areas in which coopera-
tion is playing a decisive role and of these Information and 
Communication Technologies (ICT) related areas are prob-
ably the most important. In fact cooperation in ICT is di-
rectly applicable to all the other fields of traditional coop-
eration. 
2.2 Libre Software for Institutional Strengthening 
Most cooperation projects that include software devel-
opment have taken the libre software route. This is very 
interesting if we bear in mind that this software is destined 
to form part of many key institutions (Administration or 
Education among others) of developing countries [6]. E-
government is being especially promoted and many gov-
ernments of developing countries are committing to libre 
software on the advice of independent external consultants 
and Non-Governmental Organizations (NGO) [7] [8]. There 
can be no doubt as to the influence that this will have on 
software development in other sectors of these countries. 
2.3 Next Generation of Top-Notch Programmers 
In the absence of any other option, current trends in libre 
and proprietary software in developing countries come from 
abroad. However, in the near future the first generations of 
IT engineers are expected to be responsible for software 
development, and more especially its maintenance and use. 
This is another point in favour of libre software. Educa-
tional efforts are focused on the field of e-learning and the 
development of higher education. The influence of libre 
software on the education of future generations of program-
mers and professionals in developing countries is being 
backed up by the work of NGOs and the cooperation of 
western universities [9]. 
3 Developing Countries: Emerging Libre Soft-
ware Markets 
Libre software is a well-established option for the de-
velopment of professional software which is highly recom-
mended for developing countries. In recent years there have 
been studies and efforts from these countries which dem-
onstrate a full commitment to open source software and libre 
software models [10]. Some fifteen African countries have 
already published recommendations for the adoption of libre 
software rather than proprietary software solutions (e.g. 
Angola, Benin, Kenya, Senegal, South Africa, Tanzania, 
Uganda, and Zambia). Libre software may be applied to 
many areas but it is important for three in particular: educa-
tion, mainly focused on digital libraries [11], software de-
velopers, and ICT support for general education; Public 
Administrations, with a special interest in rolling out e-gov-
ernment; and health, not only providing software to health 
institutions but also for furthering the growth of e-health 
and its use in remote areas [12]. As well as these areas in 
which libre software has already started to be introduced, 
the private sector is keen to develop reliable and secure sup-
port software, and its decisions regarding the choice of soft-
ware to be used greatly depends on the criteria of public 
administrations and the public sector in general. 
Progress 
Change 
Innovation 
Non-traditional 
Markets 
J 
+ 
Emerging Market at 
Developing Countries 
Free Software 
Catalyst 
Figure 1: Free/Libre Software Catalyst Process in Developing Countries. 
Bearing in mind the special characteristics of develop-
ing countries, their lack of any reluctance to use libre soft-
ware, the catalyst effect of cooperation, and the foreseeable 
growth of the software industry in these countries, we can 
conclude that the emerging software market in developing 
countries represents a clear business opportunity for libre 
software companies. 
References 
[1] J. Lerner, J. Tirole. "The Simple Economics of Open 
Source". National Bureau of Economic Research, Inc., 
NBER Working Papers, No. 7600, 2000. <http:// 
ideas. repec. org/s/nbr/nberwo. html>. 
[2] Morfeo-CODE. "Initiative for the use of libre software 
in development cooperation". <http://tedeco.morfeo-
project.org/>. 
[3] G. Camara, F. Fonseca. "Information Policies and Open 
Source Software in Developing Countries". Journal of 
the American Society for Information Science and Tech-
nology, 2007. 
[4] D. Wilcox. "Is Open Source Software Fair Trade for 
Nonprofits? Designing for Civil Society". <http:// 
p a r t n e r s h i p s . t y p e p a d . c o m / c i v i c / 2 0 0 7 / 0 2 / 
is_open_source_.html>. 
[5] J. Davis. "How Free Software is not Fair Trade for non-
profits. Free Web hosting for UK charities and non-
profit organizations", <http://www.freecharity.org.uk/ 
2007/02/08/how-free-software-is-not-fair-trade-for-
non-profits/>. 
[6] S. Weber. "Open Source Software in Developing 
Economies". Social Science Research Council, USA. 
<http://www.ssrc.org/programs/itic/publications/ 
ITST_materials/webernote2.pdf>. 
[7] United Nations Economic y Social Commission for Asia 
and the Pacific (ESCAP). "ICT Policy database". <http:// 
www.unescap.org/icstd/policy/db/>. 
[8] United Nations Development Programme (UNDP) and 
International Development Research Centre (IDRC) 
of Canada. "International Open Source Network 
(IOSN) - Software Freedom For All". <http:// 
www.iosn.net/>. 
[9] TEDECO: Tecnologia para el Desarrollo y la 
Cooperation. <http://tedeco.fi.upm.es/en>. 
[10] CIPESA. "Free/Open Source Software (FOSS) policy 
in Africa: A toolkit for policy-makers and practition-
ers". <http://www.cipesa.org/files/FOSSPolicy 
Toolkit.pdf>. 
[11] I. Witten, M. Loots, M. Trujillo, D. Bainbridge. "The 
Promise of Digital Libraries in Developing Countries". 
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[12] Hispano-American Health Link (EHAS). <http:// 
www. ehas .org / index. php?page=fundacion-
ehas&hl=en US>. 


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