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Hiring managers keep saying they want "open-source expertise". What do they mean? Do they want someone who contributes to open source projects (i.e. Spring, Hibernate, MySQL etc.) Or someone who implements those technologies into systems? In all likelihood they want both, but is it okay if to say I have "open-source expertise" if I've implemented open-source technologies into a project?

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You need to ask the specific hiring manager what they mean. Each one has their own interpretation.

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Regardless of the "open-source" qualifier, most employers want a worker who can utilize existing technology to create successful new applications.

Open-source from employers' perspective is just to refer to the technology stack that is distinct from a Microsoft or Oracle or IBM stack. They want to use the LAMP stack to reduce the cost of their projects.

I think more often than not, employers who use the LAMP stack don't care if their workers have contributed to those open-source projects. In fact, I've worked for a few who were reluctant when I proposed contributing any of our code back to those projects.

So yes, it's enough to say you have "open-source expertise" if you have used open-source technologies in a successful project. You should also have a clue about what the various open-source licenses mean.

Another open-sourcey qualification is the ability to search the intertubes to find the latest and greatest tools to solve a given problem domain, download and build them, and train yourself to use them. As opposed to the typical corporate model where you buy what the vendor gives you, pay them to install it, and send your team to get trained and certified. Those steps are simply not available for many open-source technologies, so you better have the skill to be more independent.

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As a hiring manager (not right now -- I'm back to being a senior individual contributor, as I keep switching back and forth every few years!-), what I like to see in a prospective is a portfolio of open source contributions. This tells me that they can code, how well they do code (once I've reviews a sample of their sources), and confirms to me (if they've been substantial members of large-ish OS project for a while) that they're team players, able to coordinate a group of developers or, at least, cooperate with such coordination.

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I would guess they mean they want experience using/working with open source products, like Spring/Hibernate/MySql. Contributing to open source is a plus from a technical understanding point of view, but businesses would be more interested in creating products to make money, using free open source infrastructure.

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I would be cautious! There is a right reason for using Open Source tools and systems which has to do with their technical capabilities. There is also a wrong reason which has to do with the "free" price tag. Labor is always the biggest expense. A decent IDE costs say around $500. A Programmer costs $50 an hour.

Anybody who is trying to save money on tools by going open source because they are free would be looking for cheap labor too. Do not be timid. Ask them what they mean by open source expertise and how do they plan to use them. make sure they are using open source for the right reasons.