How the Osmocom GSM stack is funded

History

From late 2008 through 2009, People like Holger and I were working on bs11-abis and later OpenBSC only in our spare time. The name Osmocom didn't even exist back then. There was a strong technical community with contributions from Sylvain Munaut, Andreas Eversberg, Daniel Willmann, Jan Luebbe and a few others. None of this would have been possible if it wasn't for all the help we got from Dieter Spaar with the BS-11 2. We all had our dayjob in other places, and OpenBSC work was really just a hobby. People were working on it, because it was where no FOSS hacker has gone before. It was cool. It was a big and pleasant challenge to enter the closed telecom space as pure autodidacts.

Holger and I were doing freelance contract development work on Open Source projects for many years before. I was mostly doing Linux related contracting, while Holger has been active in all kinds of areas throughout the FOSS software stack.

In 2010, Holger and I saw some first interest by companies into OpenBSC, including Netzing AG and On-Waves ehf. So we were able to spend at least some of our paid time on OpenBSC/Osmocom related contract work, and were thus able to do less other work. We also continued to spend tons of spare time in bringing Osmocom forward. Also, the amount of contract work we did was only a fraction of the many more hours of spare time.

In 2011, Holger and I decided to start the company sysmocom in order to generate more funding for the Osmocom GSM projects by means of financing software development by product sales. So rather than doing freelance work for companies who bought their BTS hardware from other places (and spent huge amounts of cash on that), we decided that we wanted to be a full solution supplier, who can offer a complete product based on all hardware and software required to run small GSM networks.

The only problem is: We still needed an actual BTS for that. Through some reverse engineering of existing products we figured out who one of the ODM suppliers for the hardware + PHY layer was, and decided to develop the OsmoBTS software to do so. We inherited some of the early code from work done by Andreas Eversberg on the jolly/bts branch of OsmocomBB (thanks), but much was missing at the time.

What follows was Holger and me working several years for free 3, without any salary, in order to complete the OsmoBTS software, build an embedded Linux distribution around it based on OE/poky, write documentation, etc. and complete the first sysmocom product: The sysmoBTS 1002

We did that not because we want to get rich, or because we want to run a business. We did it simply because we saw an opportunity to generate funding for the Osmocom projects and make them more sustainable and successful. And because we believe there is a big, gaping, huge vacuum in terms of absence of FOSS in the cellular telecom sphere.

Funding by means of sysmocom product sales

Once we started to sell the sysmoBTS products, we were able to fund Osmocom related development from the profits made on hardware / full-system product sales. Every single unit sold made a big contribution towards funding both the maintenance as well as the ongoing development on new features.

This source of funding continues to be an important factor today.

Funding by means of R&D contracts

The probably best and most welcome method of funding Osmocom related work is by means of R&D projects in which a customer funds our work to extend the Osmocom GSM stack in one particular area where he has a particular need that the existing code cannot fulfill yet.

This kind of project is the ideal match, as it shows where the true strength of FOSS is: Each of those customers did not have to fund the development of a GSM stack from scratch. Rather, they only had to fund those bits that were missing for their particular application.

Our reference for this is and has been On-Waves, who have been funding development of their required features (and bug fixing etc.) since 2010.

We've of course had many other projects from a variety of customers over over the years. Last, but not least, we had a customer who willingly co-funded (together with funds from NLnet foundation and lots of unpaid effort by sysmocom) the 3G/3.5G support in the Osmocom stack.

The problem here is:

• we have not been able to secure anywhere nearly as many of those R&D projects within the cellular industry, despite believing we have a very good foundation upon which we can built. I've been writing many exciting technical project proposals

• you almost exclusively get funding only for new features. But it's very hard to get funding for the core maintenance work. The bug-fixing, code review, code refactoring, testing, etc.

So as a result, the profit margin you have on selling R&D projects is basically used to (do a bad job of) fund those bits and pieces that nobody wants to pay for.

Funding by means of customer support

There is a way to generate funding for development by providing support services. We've had some success with this, but primarily alongside the actual hardware/system sales - not so much in terms of pure software-only support.

Also, providing support services from a R&D company means:

• either you distract your developers by handling support inquiries. This means they will have less time to work on actual code, and likely get side tracked by too many issues that make it hard to focus

• or you have to hire separate support staff. This of course means that the size of the support business has to be sufficiently large to not only cover the cots of hiring + training support staff, but also still generate funding for the actual software R&D.

We've tried shortly with the second option, but fallen back to the first for now. There's simply not sufficient user/admin type support business to rectify dedicated staff for that.

Funding by means of cross-subsizing from other business areas

sysmocom also started to do some non-Osmocom projects in order to generate revenue that we can feed again into Osmocom projects. I'm not at liberty to discuss them in detail, but basically we've been doing pretty much anything from

• custom embedded Linux board designs

• M2M devices with GSM modems

• consulting gigs

• public tendered research projects

Profits from all those areas went again into Osmocom development.

Last, but not least, we also operate the sysmocom webshop. The profit we make on those products also is again immediately re-invested into Osmocom development.

Funding by grants

We've had some success in securing funding from NLnet Foundation for specific features. While this is useful, the size of their projects grants of up to EUR 30k is not a good fit for the scale of the tasks we have at hand inside Osmocom. You may think that's a considerable amount of money? Well, that translates to 2-3 man-months of work at a bare cost-covering rate. At a team size of 6 developers, you would theoretically have churned through that in two weeks. Also, their focus is (understandably) on Internet and IT security, and not so much cellular communications.

There are of course other options for grants, such as government research grants and the like. However, they require long-term planning, they require you to match (i.e. pay yourself) a significant portion, and basically mandate that you hire one extra person for doing all the required paperwork and reporting. So all in all, not a particularly attractive option for a very small company consisting of die hard engineers.

Funding by more BTS ports

At sysmocom, we've been doing some ports of the OsmoBTS + OsmoPCU software to other hardware, and supporting those other BTS vendors with porting, R&D and support services.

If sysmocom was a classic BTS vendor, we would not help our "competition". However, we are not. sysmocom exists to help Osmocom, and we strongly believe in open systems and architectures, without a single point of failure, a single supplier for any component or any type of vendor lock-in.

So we happily help third parties to get Osmocom running on their hardware, either with a proprietary PHY or with OsmoTRX.

However, we expect that those BTS vendors also understand their responsibility to share the development and maintenance effort of the stack. Preferably by dedicating some of their own staff to work in the Osmocom community. Alternatively, sysmocom can perform that work as paid service. But that's a double-edged sword: We don't want to be a single point of failure.

Osmocom funding outside of sysmocom

Osmocom is of course more than sysmocom. Even for the cellular infrastructure projects inside Osmocom is true: They are true, community-based, open, collaborative development projects. Anyone can contribute.

Over the years, there have been code contributions by e.g. Fairwaves. They, too, build GSM base station hardware and use that as a means to not only recover the R&D on the hardware, but also to contribute to Osmocom. At some point a few years ago, there was a lot of work from them in the area of OsmoTRX, OsmoBTS and OsmoPCU. Unfortunately, in more recent years, they have not been able to keep up the level of contributions.

There are other companies engaged in activities with and around Osmcoom. There's Rhizomatica, an NGO helping indigenous communities to run their own cellular networks. They have been funding some of our efforts, but being an NGO helping rural regions in developing countries, they of course also don't have the deep pockets. Ideally, we'd want to be the ones contributing to them, not the other way around.

State of funding

We're making some progress in securing funding from players we cannot name 4 during recent years. We're also making occasional progress in convincing BTS suppliers to chip in their share. Unfortunately there are more who don't live up to their responsibility than those who do. I might start calling them out by name one day. The wider community and the public actually deserves to know who plays by FOSS rules and who doesn't. That's not shaming, it's just stating bare facts.

Which brings us to:

• sysmocom is in an office that's actually too small for the team, equipment and stock. But we certainly cannot afford more space.

• we cannot pay our employees what they could earn working at similar positions in other companies. So working at sysmocom requires dedication to the cause :)

• Holger and I have invested way more time than we have ever paid us, even more so considering the opportunity cost of what we would have earned if we'd continued our freelance Open Source hacker path

• we're [just barely] managing to pay for 6 developers dedicated to Osmocom development on our payroll based on the various funding sources indicated above

Nevertheless, I doubt that any such a small team has ever implemented an end-to-end GSM/GPRS/EGPRS network from RAN to Core at comparative feature set. My deepest respects to everyone involved. The big task now is to make it sustainable.

Summary

So as you can see, there's quite a bit of funding around. However, it always falls short of what's needed to implement all parts properly, and even not quite sufficient to keep maintaining the status quo in a proper and tested way. That can often be frustrating (mostly to us but sometimes also to users who run into regressions and oter bugs). There's so much more potential. So many things we wanted to add or clean up for a long time, but too little people interested in joining in, helping out - financially or by writing code.

On thing that is often a challenge when dealing with traditional customers: We are not developing a product and then selling a ready-made product. In fact, in FOSS this would be more or less suicidal: We'd have to invest man-years upfront, but then once it is finished, everyone can use it without having to partake in that investment.

So instead, the FOSS model requires the customers/users to chip in early during the R&D phase, in order to then subsequently harvest the fruits of that.

I think the lack of a FOSS mindset across the cellular / telecom industry is the biggest constraining factor here. I've seen that some 20-15 years ago in the Linux world. Trust me, it takes a lot of dedication to the cause to endure this lack of comprehension so many years later.

1

just like Linux has started out.

2

while you will not find a lot of commits from Dieter in the code, he has been playing a key role in doing a lot of prototyping, reverse engineering and debugging!

3

sysmocom is 100% privately held by Holger and me, we intentionally have no external investors and are proud to never had to take a bank loan. So all we could invest was our own money and, most of all, time.

4

contrary to the FOSS world, a lot of aspects are confidential in business, and we're not at liberty to disclose the identities of all our customers