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Making Money In Open Source
Khalid writes "An interview with Sleepycat President and CEO, Michael Olson, it brings a lot of interesting information about their business model and licensing scheme. A lot of good ideas, when a lot of open source based companies are struggling for life. "
Chritian stamitz writes
/*the Open-Source movement has never been better situated to be the leader in Middleware development both within the enterprise and throughout the world. Industry players such as IBM are now looking to our movement to help set standards and define trends and new technology opportunities. It's time that we as a community step forward and begin living up to our billing.*/
Industry isn't that important for development. If it contributes money, it's okay. If it contributes code, even better.
We have to separete two important parts of Linux/Open Source:
1. Open Source or the Internet as a business model
-> short time exspectations were to high
2. Open Source or the internet as a self developing, fast growing plattform, despite of the fact, whether you can earn money with.
In some areas the growing utility of the Internet and Open Source products even leads to a crash of traditional industrys withour loss.
But from a economic point of view, companys and capitalism is just an instrument to get public supply.
So I am less interested in the benefit of companys, but in the benefit of myself.
Cstamitz@
Now, before you mod me down for disagreeing with the Slashdot groupthink, let me explain my statement. Don't you think the hundreds of failing Linux companies would have put at least a decent sized sum into hiring consultants to find out the most workable open source business plans?
Don't get me wrong, I think the ideas they present here sound great! It's just that, like Communism, it only looks good on paper, without working out in the real world. Surely, if it was this easy, VA Research^H^H^H^H^H^H^H^HLinux^H^H^H^H^HSoftware would have already put these into action and they wouldn't be on the edge of being delisted from NASDAQ.
Is your company running tools written by ma
1: Can I copy some source code of Berkelydb into my BSD-licensed app? Based on the interview, I don't think I can without restricting derivative works.
2: If Sleepycat decides never to release another OSS version, can I continue to develop their last version? Again, the interview makes this unclear and seems to give a tentative "no," but the license seems to imply that I can.
They have also said that the license is not GLP compatible, so these are real questions.
LedgerSMB: Open source Accounting/ERP
I have worked on several open source projects that likely could have gotten some funding (not VC crap or marketing dollars, just pay for some additional work/documentation/support) but never made the effort. I'm now working with some friends on an interesting system that we plan on doing just this sort of thing with.
this is getting old and so are you
blog
...toward the end of the interview, where Olson states that more people know now about open source and the GPL than ever before, but also that they're almost all scared to death of it.
I suppose that's the basic difference: With Micro$oft, you know they're out to get you; with open source, you're never sure <g>.
How true, how true.
Most dot-coms failed because of a bad business plan.
Why? Cause the management were a bunch of nerds that had no experience with business plans.
Not to mention trying to convince a tech-savvy management team to use open source vs. proprietary is hard enough.
Also notice, that if you talk to an open source company's CEO, he'll have great ideas on how open source can make money in theory. But what open source companies have made money in practice???
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
There is one here. And there are others. You just won't hear about them on Slashdot.
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Maybe it's just me, but I don't really see how a company can make money at being purely an open source software vendor. The idea behind open source is that good software should be freely available to everyone. Selling software for the sake of software is sort of missing the point.
The company I work for develops embedded and realtime systems. Some are sold as products, others are custom developed for clients. We use Linux and other open-source software in our products. And we make plenty of money at it. But we don't make money from the software, we make money from the hardware and from our expertise at systems integration.
We support open source because we don't have to pay someone for basic things like operating systems. We contribute things like device drivers back into the open source community because they improve the OS, even if the drivers are for hardware which is too specialized for most people to care. Someone might have a need for this stuff and find it useful, and perhaps this someone might find a bug in it or add new features or expand it to be compatible with other, similar hardware.
And to me this is what open source is supposed to be all about. It's about people and enterprises with particular needs working together to solve common problems. As these problems are solved, the solutions get released back to the community and the software improves. Yes, this does make it rather difficult to simply be in the business of selling commodity software. In order to make money at it, you have to make the software do something useful.
And making software do something useful is what it's all about...
Software is good when it's Free for everyone. Yes, I agree. But why should this only apply to software?
Capitalism is about property. Property is about me having something and not letting you use it unless I want to. So, it's about making things unFree (restriction).
So, the GPL allows supporters of restriction to take advantage of Freedom to further their goals.
For example, it doesn't require modifications to GPL software to be released under the GPL, unless the binary itself is released. It doesn't require software compiled using gcc, or linked with some libraries, to be released under the GPL.
And why doesn't it? Because then no business in its right mind would use it for any product who sale is critical to the success of the business.
So, the basic result of the GPL is to provide cost-free high quality productivity and development tools, with which businesss can thrive and further restrict other tangibles and intangibles.
Software becomes more Free, everything else becomes less Free.
The GPL is a self-defeating ideal.
Beowulf clusters are playing catch-up to VMS clusters.
Seriously, I challenge all to name an innovation in GNU software or the Linux kernel. Half credits for ideas well-known but not implemented outside research systems.
I do dithering/wordlength reduction software under the GPL (it's not C code, mind you, but it is still GPLed) and the last version did fairly well, competing with some extremely formidable proprietary dithers from places like the POW-R Consortium and Apogee. That stuff pretty well held its own for the most part with the best that the proprietary world had to offer.
Over the last week, I've drastically overhauled my noise-shaping code, and am trying to get final work done on a new release of my software- and this time, I've blown everything proprietary out of the water completely (w.r.t quality of output- not workflow convenience- I don't do hardware, or realtime output). I've got one dither that's consistently -160 db noise floor from 0-2K. Another one hits -170 db at 1.8 and 3K, right where the ear is most sensitive. Another steadily drops to below -170 db at the lowest frequencies. Another uses unusual methods to produce soundstage depth (a comb-filter-like noise floor- never heard of anyone doing that one before).
This is _all_ GPLed. You can't use any of it in proprietary software without violating the public license it's released under.
This is also _all_ mine. It's not even written in C, much less based on GPLed code from others. (That's one reason why my file reading routines suck ;) ). It uses none of the 'many hands make light work' concept of open source- I do all the work and have not had any offers of help from anyone at all, except some mastering engineers who've given their thoughts on early versions of its audio performance, and they don't write code.
With that in mind, I have to say I'm delighted to see SleepyCat's take on all this: it confirms what I had suspected, and gives me hope for the future. You can make money on open source by indulging in people's desires to NOT play along and open their own source. You can charge them to NOT share (if they share, they get it for free. How much is your paranoia worth to you? ;) )
The only requirements are that YOU have to do the work- which stands to reason- that you have to not only do all the work but also outperform everybody else- and that there have to be enough others out there who want what you have to give, but won't themselves share. Basically, you're charging people for their own greed. If they were willing to give their work to the world as you do, they'd get your help for nothing. But if they want what you have, and won't do as you do- they must either do without, or come to terms with you. (or rip you off outright, but that's another story).
It's inspiring to see how these folks do it, and definitely something to emulate- makes me glad I've been using pure GPL all along, rather than something like LGPL. They're so right- you can't exert this kind of pressure UNLESS your 'free' licensing is hardcore 'libre' with no concessions to business. It's gotta scare the suits and the lawyers enough so they come to you and say 'maybe we can work something out' (*kaching!* good to do business with ya!).
Wonderful to see this. And again it's so simple that I marvel that nobody else has been suggesting it- I thought I had sort of invented this concept for myself out of necessity and it's reassuring to see that people have actually tried it and it works. You have to have a product so good that people _do_ want a piece of it- a libre license that scares the suits- and a willingness to release private versions under non-free parallel licenses to companies that want what you have, but won't share code themselves.
Maybe this _does_ lead to doing yourself out of a job, in the future when everybody is nice and shares ;) or maybe the 'bar' is very high, in that you really have to perform to get in such a position. If that's the case, then (a) explains why I haven't made money this way yet, and (b) if 20 db better noise floor than the top proprietary dither isn't enough, I'll keep working until it's 30 db ;) it looks like some entire concepts like indeterminate-order noise shaping are mine alone. I don't think you can even get error distributions anything like what I'm getting without it- so for a change, rather than indispensable technology being owned by a patent holder, indispensable technology is 'owned' by the sphere of GPLed free software. Any arguments that code or algorithms are property and not speech will only enhance the value of this 'ownership'. Or to put it another way: so software is not speech? So you can 'own' an algorithm, huh? Well, _this_ one you can't have unless you go libre with your own code, or pay! *kaching*
Hah!
I gotta get back to work- the main dithers have been hammered out, but I need to adapt some of the others, like Logic and Ambient, to the new error-feedback routines. They probably won't outperform the others in numbers, but they're geared to different needs: Logic turned out to be good at revealing depth cues accurately, and Ambient was particularly warm with very authoritative bass, and I gotta see if I can bring out those qualities more.
If there's anybody else out there capable of doing this type of thing in other fields, please, please, go for it with every bit of effort you can come up with! Maybe 'open source' as a way of not having to do as much of the work has an immediate appeal to people- but the only way we're gonna REALLY get Software Libre out there and impossible to avoid is if you do the work yourself, do it BETTER than anyone else can (pick your field carefully, and narrowly!) and then put your stuff out with a hardcore libre license and a willingness to charge for dual-licensing! It's gotta be 'This is mine- you either share, or you pay. My way or the highway'. That's the only way to win...
You have to bare in mind that the GPL is not, despite popular belief, anticapitalistic and RMS is not anti property.
.well, a secret. It's YOUR choice whether to let the cat out of the bag or not, but once it's out don't complain if it runs away from you. That's what cats, and ideas, do.
The GPL is founded on the idea that *ideas* are not property. Hence the catch phrase, " Free as in speach, not as in beer."
If you make beer you are making property. A manufactured item that can be inherently possesed and traded. If *I* own *this* beer, you do not. You inherently *cannot*, as the beer is a physical item. It is, by its very nature, exclusive in its title of ownership.
RMS believes that software is more like F=ma. As an IDEA it cannot be restricted as can a beer, and should not be. Indeed, like RMS, I am old enough to remember when all software was essentially academic in its derivation and distribution. The very idea of propriatary mathmatical formula and algorithms was once considered ubsurd.
Much of the reason we are in the mess we are at the moment with regards to propriatary information, ( like what Mickey Mouse *looks like*), is due to forcing a legal structure of ownership upon items which are inately of * the mind.*
Play Tolstoy for a bit and go stand in the corner and * not think* of a white elephant for half an hour.
I think this example goes right to the heart of the concept of propriatary knowledge.
The GPL does nothing to make beer "freer," nor is it intended to, any more than the law of gravity is intended to make anything "freer."
But if you run a brewery and your software is freely aquired OSS than perhaps you can sell your beer *cheaper* and make the same profit.
The GPL makes ideas free, and actual *property* cheaper.
Now perhaps my beer is popular because of some "secret formula." That would be a trade secret, so long as I don't tell anybody about it.
The GPL has not problem with that. Trade secrets, are fully recognized and supported by the GPL.
Just don't TELL anyone.
There is the crux of the matter right there. A secret is only a secret so long as it's . .
The GPL dosn't require you to let the cat out of bag, only admit that it's a cat once it's out.
KFG
The standard idea for making money by open source software, if that's what you're trying to do, is to give it away as a loss leader and to sell support and feature enhancements and such. While not exactly what you describe, it's close. Making it pure software, Cygnus used this model and was quite profitable. They made prettymuch all of their work on gcc distributable, but they would generally have someone pay them to do the work. That is, someone would want a compiler for a given platform and then comission the cygnus people to port gcc to it, since gcc is such a high quality compiler and getting a gcc port was a lot cheaper than writing an equal-quality compiler from scratch. Then the port would go into gcc proper, generally, because the company in question wouldn't gain anything from keeping the source closed. They also made a decent revenue from people who bought support contracts on gcc, IIRC.
You're quite correct that almost noone is going to want to buy for $50 what they can get for free off of your website, and if that's your business model it's only a matter of time before you're going to fail.
However, that's only one of the many ways of making money from open source software, support and comission work being the obvious ones. However, as you point out, there's probably an even bigger market in people who indirectly make money from open source software, i.e., that it's only a component, possibly a small component, in what they're selling or doing. And this is one of the things that really gives open source its power. It doesn't need companies dedicated to developing open source software, though that does help, honestly.
They laughed at Einstein. They laughed at the Wright Brothers. But they also laughed at Bozo the Clown. -- C. Sagan
If I understood the GPL right, one of the basic ideas is to protect the work of someone out there on your code. You can't take it and go making money with it, closed source. So you can only do dual-licencing if you have separable code, say, the client side and the engine or similar. Did I get that right? So you'd need a LGPL to link your free part to your proprietary part, and your proprietary part you have to look after yourself (unless there's someone in the field helping you with something you make money with).
I understand that we are happy to see an open source company doing well but I can imagine how you all would scream out if Microsoft was going to make money with free software.
GPL and OpenSource are A Good Thing (TM) because they take the money issue away from the development of the software. Make money with your knowledge! Make money with your service! But don't sit there and just collect the dough.
As much as I like to see companies providing software to the community and still earning money with it, I am scared that this could be used by stronger companies one day, say IBM, Sun or Microsoft, by inserting one essential component in copyrighted and patented form to gain control. And to make money with it.