Critical Free

Motivation
Detailed description
Economical Viability
Critical Free
The alternative on critical systems
Jorge López Fernández

lopez.fernandez.jorge@gmail.com
Master on Libre Software
Introduction to Libre Software, 2009
Jorge López Fernández Critical Free

Motivation
Outline
1 Motivation
What we plan to work on
Why we plan working on it
What we plan to do exactly
2 Detailed description
SWOT analysis
Services and products offered
Objectives
3 Economical Viability
Human Resources
Detailed Expenditures
Detailed Incomes
Detailed Economic Results Year-By-Year

Motivation What we plan to work on
Detailed description Why we plan working on it
Economical Viability What we plan to do exactly
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Brief introduction
Wait, what is exactly a Critical System?
A life-critical system or safety-critical system (mainly known sim-

ply as critical systems) is a system whose failure or malfunction
may result in:
• death or serious injury to people, or

• loss or severe damage to equipment, or
• environmental harm.
Wikipedia, December 8th 2009
Summarizing, it’s a system, hardware and/or software, which

is critical in an area.

Some examples
Ok, now I know what a Critical System is, but give me examples.
I’m not exaggerating if I say that today our lives depend on lots of
Critical Systems:
The systems used for control and monitoring on many factories and
other perilous or critical importance facilities (e.g. nuclear plants).
Medical facilities and equipment software.
Software that is embedded on lots of vehicles, like airplanes or even
the latest car model.
Software used in risky scientific missions or experiments (e.g. all the
ISS related missions, or the Large Hadron Collider ones).
Military equipment and weapons (war is always dangerous, so we
must take care even with our very own weapons).
Traffic control systems.
Etc.
Showing their importance

Wait, some of the examples you gave remind me of painful events...
As you can see, they are really important, but for making it even
more clear, let’s take a look at some counterexamples. What could
happen if a big company on a perilous area doesn’t have a Critical
System, or at least a well-tested one?
• The Chernobyl Nuclear Power Plant disaster (April 26, 1986),

which resulted in 56 direct deaths and approximately 100.000
fatal cancers, all due to a massive, non-controlled catastrophic
power excursion on a reactor that destroyed it.
• The Bhopal disaster (December 3, 1984), where the release of
large amounts of methyl isocyniate gas and other toxins resulted
in the death of over 30.000 people, 8.000 of them in the first 72
hours. All this happened because of the lack of control systems
for the tanks.
Showing their importance (cont.)
• The South Carolina train disaster (January 6, 2005), where two

Norfolk Southern trains collided due to an improperly lined rail-
road switch, resulting on the release of at least 90 tons of chlorine
gas, sodium hydroxide and cresol, killing 9 people and exposing
at least 250.
Wikipedia, December 13th 2009
Now it’s obvious why they are called Critical Systems.
→ It’s true that most of the biggest disasters had an important

human factor, but with good control systems, hardware or
software-based, many of them wouldn’t have happened.

Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Important points on the Critical Systems business

And why did you choose Critical Systems?
Now that we know what Critical Systems are, let’s point some of
their business’ biggest strengths:
As we have seen, they are commonly needed nowadays, partic-
ularly in special equipment, big and/or perilous facilities and
scientific investigations.
Most of them created for specific conditions or equipment, so
working on free software will have advantages for us and also
for the client, but it will not minimize our number of customers.
As they are critical, most customers don’t want only the code,
but also advising and technical support.

Important points on the Critical Systems business (cont.)
It’s a sector where the libre software hasn’t penetrated into

yet, so we will be pioneers on providing offers with this kind of
advantages for the client.
Contracts and relations with clients usually last for many years
(’if something works, and is essential, why would we take a risk
and change it?’).
We see there are many advantages of programming critical systems,

so we think it’s an excellent opportunity we shouldn’t let pass by.

Examples of successful business on this sector

But can you really earn money with these systems?
Let’s take a look at some examples of this business:

Critical System Solutions 1 : provides services (service, mainte-
nance, testing, inspections, design, installation, retro-fits, mon-
itoring and leasing) to hospitals, health care facilities, nursing
homes, commercial offices, retail facilities, education, institu-
tional properties, industrial, and hotel/motel occupancies. It
has recently expanded as a result of it’s success. Created on
2007, american.
1
http://www.criticalsystemsolutions.com/
Examples of successful business on this sector
Critical Systems Labs 2 : an engineering consultancy that spe-

cializes in the specification, analysis and verification of software-
intensive critical systems for aerospace and automotive indus-
tries, air traffic, defense and medical devices. Created on 2005,
american.
Critical 3 : provides solutions, services and technologies for mis-
sion and business critical processes, working within a diverse
array of market sectors. Created on 1998, portuguese (but now
with offices also in the UK, USA, Brazil and Romania).
2
http://www.criticalsystemslabs.com/
3
http://www.criticalsoftware.com/
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Our business’ project’s description

And what is exactly your proposal?
After these examples of successful business, let’s talk about our

own model:
Critical Free will be a libre software company that focuses on

critical systems for many sectors: medical devices, vehicles, criti-
cal facilities, general security devices, etc.
It will develop it’s own applications based on it’s clients’ require-
ments, and also advise them on their use.
Other main services will be training courses on their software use
and deployment, legal advise and complex/advanced devices in-
stallation, these last two mainly by subcontracts.
We catalogue it as a business based on Product Specialists, accord-

ing to the FLOSS-based libre software business models, and based
on Support Sellers asccording to Frank Heckers’.

Our business’ project’s main points

What advantages would that business model have?
Now we will describe the main advantages and other important
points of this model:
Pioneers on introducing libre software as a development pillar

on critical systems sector.
Contracts usually last for several years.
Well paid sector.
Large market as a result of an important number of different
products and services.
Big companies usually need many contracts and features on this
sector, on both developing and advising, so a satisfied client will
probably request more products and services.
By creating strong communities on the different products, both
our business and our clients will have benefits from a strong
ideas and support flow.
Motivation SWOT analysis
Detailed description Services and products offered
Economical Viability Objectives
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

SWOT
And what are exactly both the advantages and risks of the business?
Now that we have explained exactly what business we plan to cre-

ate, let’s make a more complex analysis of it. We will start with
the SWOT analysis (Strengths, Weaknesses, Opportunities and
Threats), which is one of the more complete and extended ones.
- Strengths:
By using libre software, we will have lots of opportunities of
directly reusing software, both from our previous projects or
from somebody else’s ones.
Our technical crew will have previous experience with libre soft-
ware and profound knowledge on critical systems, so all advan-
tages it could provide on this sector will be exploded early.
SWOT (cont.)
- Weaknesses:
Crew without experience on creating professional critical sys-
tems with libre software.
Lack of similar business models to take as an example.
Very different products and services to offer, so we need more
different professionals.
Need of different certifications to prove our good products,
methodologies and services in such a critical sector.
We work on Critical Systems, so we must take care with every-
thing.

SWOT (cont.)
- Opportunities:
No rivalry on creating critical systems with libre software.
Well paid sector.
Large market.
Every client usually requests many products, and contracts last
many years.
Possibility of creating strong communities on our products.

SWOT (cont.)
- Threats:
As we are pioneers, we must make an important effort on mar-
keting and promotion of our model’s benefits.
As we said, contracts usually last for years, and this could be-
come a threat, because there are some well-known and solid
business on critical systems with already a big amount of clients
(in some countries it’s almost a monopoly).
Some services will lay on subcontracts, and this is always a risk,
even when choosing them carefully.

Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Services offered
And what are our customers going to pay for?
Our business will offer the following:
Creation of software for critical systems according to our cus-

tomer requirements.
Installation and configuration of software for critical systems.
Courses, for both developers and users, about some of our soft-
ware products.
Put in contact with a legal advisory (for critical systems mat-
ters) that fits for our customer.
Critical Systems installations.
Technical support and legal responsabilities on our software.

Some of the business policies
Here are some points we consider important to talk about now:
As they are one time services, our business will also install and
configure software from other developers in some exceptional
occasions.
Our software will have free software licenses, so we will provide
no guarantees for it. In order to do it, we will sign a contract
for legal responsabilities with the customers of our technical
support. As a consequence of this, these contracts will be
signed for specific products.
As a result of requesting the development of a software product,
the customer will have one year of free technical support and
legal responsabilities starting on the moment we deploy the
software.
Products + services suite example
The services/products flow is explained better with a step-by-step

complete example (not they all will be in every project):
1 The customer requests assessment on the critical system that
best fits in a specific situation.
2 We start a new software project based on his/her requirements.
3 We manage the installation of the critical system physical de-
vices.
4 We install and configure the software.
5 Our legal crew looks for legal advisory for our customer.
6 Our experts give courses for potential developers and users of
our new software.
7 We will provide technical support and legal responsability on
our new product for the customer at least for 1 year (this first
one for free).

vices.
our new software.
one for free).

vices.
our new software.
one for free).

vices.
our new software.
one for free).

vices.
our new software.
one for free).

vices.
our new software.
one for free).

vices.
our new software.
one for free).
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

At short term
First of all, at our very beginning we will focus on medical equip-

ment, because it’s a large market with lots of customers (public and
private hospitals, clinics, some sports facilities, other health centers,
etc.) and it isn’t one of the most technically complex or expensive.
These are our objectives for the first years:
Get a good number of faithful customers.

Achieve quality certifications.
Become widely known in the area.

At long term
Our main objectives at long term are the following:
Increase our technical department for not depending on sub-

contracts for most projects.
Widen our critical systems covered sectors.
Become the main software developer of the most important
critical systems hardware companies.

Human Resources
Motivation
Detailed Incomes
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Human Resources
Motivation
Detailed Incomes
Initial Crew
And who will do all this?
This is the crew we plan to hire at our business beginning:
• 2 Computer Science Engineers with profound knowledges on

Critical Systems software (from now on, Software Expert).
• 1 Computer Science Engineer with knowledges on electronics
/ Electronics Engineer with knowledges on programming (from
now on, Electronics Expert).
• 1 Lawyer with knowledges on penal law and a smattering of
accounting (from now on, Legal / Accounts crew).

Human Resources
Motivation
Detailed Incomes
Crew Evolution
Do we plan to hire more people?
This is the crew evolution we plan for the first years:
XX
XXX Year
XX 2010 2011 2012 2013
Department XXXX
Software Experts 2 4 6 8
Electronics Experts 1 2 3 4
Legal / Accounts 1 1 2 2
All our crew will have a 8-hour journey, with the exception of the
Legal / Accounts department, where people will have a 6-hour
journey on their first year.

Human Resources
Motivation
Detailed Incomes
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Human Resources
Motivation
Detailed Incomes
Basic Wages
How much is this going to cost?
These are the wages for the starting year, 2010:
Department Wage (e/month)

Software Experts 2.200
Electronics Experts 2.000
Legal / Accounts 1.500 (6-hour) / 2.000 (8-hour)

Human Resources
Motivation
Detailed Incomes
Other Basic Monthly Costs
Matter Cost (e/month)

Office Rent 350 (first two years) / 600
Common Bills & Taxes 60
Phone line & ISP 70
Other Phone Calls 20
Office Maintenance 60 (first two years) / 100
Allowances 25 / 50 / 100 / 150
Marketing & Web Page Maintenance 250
Accounting Advise 50 (only the first year)
Audits & Related Costs 500 (first year) / 300
Notes: we have two different costs for the office rent because we plan moving to a
bigger one as our crew grows (this also explains the maintenance costs). We will have
accounting advise on the first year, while our crew is still unexperienced. Audits will
need more investment on the first year, in order to obtain the quality certifications.
Some references: Habitat 24 , Asesorı́a Contable, Kalamazoo, R

Human Resources
Motivation
Detailed Incomes
Equipment Costs
Matter Starting Cost (e) Adding Cost (e/new member)

IT 2000 500
Office Furniture 1200 200

Human Resources
Motivation
Detailed Incomes
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Human Resources
Motivation
Detailed Incomes
Income Types
And how much are we going to earn for our projects?
We classify our incomes in the two following categories, with their

average money amount associated:
Type Basic Income (e)

Complete Suite 12.000 (early life) - 13.500 (medium life) - 15.000 (advanced
life)
Other Services 2.000
Note: for our business we consider the first year as ‘early life’, second and third ones
as ‘medium life’, and above that as ‘advanced life’.

Human Resources
Motivation
Detailed Incomes
Products & Services Growth
Now we will mark our predictions for services and products requested
on the first years:
PP
P PP Year 2010 2011 2012 2013
Type PP
PP
Complete Suite 5 12 23 35
Other Services 6 12 25 40

Human Resources
Motivation
Detailed Incomes
Outline
1 Motivation
SWOT analysis
Objectives
Human Resources
Detailed Incomes

Human Resources
Motivation
Detailed Incomes
2010 Results
Expenditures
Wages 94.500 e
Other Monthly Expenditures 16.620 e
Equipment Expenditures 3.450 e
114.570 e
Incomes
Complete Suites 60.000 e
Other Services 12.000 e
72.000 e
Total Results
Expenditures -114.570 e
Incomes 72.000 e
-42.570 e

Human Resources
Motivation
Detailed Incomes
2011 Results
Expenditures
Wages 186.480 e
203.931 e
Incomes
195.300 e
Total Results
Incomes 195.300 e
-8.631 e

Human Resources
Motivation
Detailed Incomes
2012 Results
Expenditures
Wages 300.321 e
323.253 e
Incomes
397.451 e
Total Results
Incomes 397.451 e
74.198 e

Human Resources
Motivation
Detailed Incomes
2013 Results
Expenditures
Wages 411.188 e
435.151 e
Incomes
700.363 e
Total Results
Incomes 700.363 e
265.212 e

Human Resources
Motivation
Detailed Incomes
Results Summary
Incomes / Expenditures
7e+05
Incomes
Expenditures
6e+05
5e+05
4e+05
Amount
3e+05
2e+05
1e+05
2011.0 2011.5 2012.0 2012.5 2013.0 2013.5 2014.0
Time

Human Resources
Motivation
Detailed Incomes
ROI
And what profit are we going to have?
Now we’ll compute the ROI (Return On Investment), a rate that

points how good is this business as investment (the profit %):
Until Year ROI

2010 -37.16%
2011 -16.08%
2012 3.58%
2013 26.76%
Note: for all our year-by-year results we have applied a sample CPI of 5% for all years
on both incomes and expenditures.

Critical Free

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Motivation

Jorge López Fernández

Master on Libre Software

Introduction to Libre Software, 2009

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

A life-critical system or safety-critical system (mainly known sim-

• death or serious injury to people, or

Summarizing, it’s a system, hardware and/or software, which

Jorge López Fernández Critical Free

Showing their importance

• The Chernobyl Nuclear Power Plant disaster (April 26, 1986),

Showing their importance (cont.)

• The South Carolina train disaster (January 6, 2005), where two

Now it’s obvious why they are called Critical Systems.

→ It’s true that most of the biggest disasters had an important

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

Important points on the Critical Systems business

Jorge López Fernández Critical Free

Important points on the Critical Systems business (cont.)

It’s a sector where the libre software hasn’t penetrated into

We see there are many advantages of programming critical systems,

Jorge López Fernández Critical Free

Examples of successful business on this sector

Let’s take a look at some examples of this business:

Examples of successful business on this sector

Critical Systems Labs 2 : an engineering consultancy that spe-

Jorge López Fernández Critical Free

Our business’ project’s description

After these examples of successful business, let’s talk about our

Critical Free will be a libre software company that focuses on

We catalogue it as a business based on Product Specialists, accord-

Jorge López Fernández Critical Free

Our business’ project’s main points

Pioneers on introducing libre software as a development pillar

Jorge López Fernández Critical Free

Now that we have explained exactly what business we plan to cre-

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

Jorge López Fernández Critical Free

Our business will offer the following:

Creation of software for critical systems according to our cus-

Jorge López Fernández Critical Free

Some of the business policies

Here are some points we consider important to talk about now:

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Products + services suite example

The services/products flow is explained better with a step-by-step

Jorge López Fernández Critical Free

First of all, at our very beginning we will focus on medical equip-