Slashdot Mirror
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@
I don't think there is any magic in it.
If it's a COMPANY it need to be run like a COMPANY. A BUSINESS.
In my opinion the fall of many opensource based "companies" has been the fact that they never were COMPANIES - but instead a collection of enthusiastic nerds.
Opensource is not the complete answer for a company strategy unless you are planning to eat rice for the lest of your life.
Now that the megalomania, greed and excess of the Linux boom days has disappeared, it's clear that raising a mountain of money from VC's and an IPO and overthrowing Microsoft and Oracle isn't the way to succeed for a free software developer. On the other hand, growing at a reasonable rate, living off revenues and (duh) making a really good product like Qt or BerkeleyDB can make you a nice living.
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$oft, you know they're out to get you; with open source, you're never sure <g>.
Maybe we should refocus our attention on making "reasonable" or "sufficient" amounts of money. Statistically speaking, in most fields, nobody makes the bigs bucks.
In sports there are many many minor league players just scraping by for each major league bazzillionaire. In business, most places are small mom-and-pop (more than 50% of the US ecconomy?) compared to the relatively few McDonalds out there. Maybe Open Source is a bit different in that it is virtually impossible for there to be even this many (or any?) BIG winners - but that doesn't mean that everyone is thus forced to be a "looser".
It seems as though there are lots of opportunity for making a living with creation, support, etc. of Open Source solutions to various people's problems. And in fact there are a lot of people making decent livings providing those services.
It's easy to make money in open source. First, grab Freemoney
./configure --prefix=/usr/local/
[root@localhost freemoney_0.02]$
[root@localhost freemoney_0.02]$ make
[root@localhost freemoney_0.02]$ make install
That wasn't so hard now, was it?
There is no reasonable defense against an idiot with an agenda
:wq
If you look at many examples it's hard as hell to make money with open source. On the other hand it's alot easier to SAVE money with open source. For example switching over to linux servers like mentioned in that recent slashdot article. Switching applications over to open source as well. I can see people saving money with open source but making money, well thats easier said then done.
Snoozer.
Most OSS companies don't know how to run a business because the paradigm and rules of the game are too different. Look at Caldera, for example. There is a company which seems bent on selling Linux as if it were proprietary software, which looks like the safe choice to the novice, but really provides the worst of both worlds...
The real problem facing OSS companies is that the rules of the game are so different than they are for proprietary software companies. You cannot make your money on licensing because if you try to do that, your competition makes a cheaper clone. OSS commoditizes the software market.
I think that companies like Sleepycat are honestly trying to find out how to make money in a commoditized world, but I think they will have to transiton into another mode. Repeat after me: "You cannot make money selling open source software that you develop yourself." The market is simply too competitive.
What more companies need to do is offer tailored services, utilizing open source software to produce less expensive, more competitive packages of services. Of course, then you are competing with IBM, etc. but I suspect that this is EXACTLY why IBM is starting to move more open source.
LedgerSMB: Open source Accounting/ERP
A large number of americans have a lottery mentality that they are always looking for some way to make lots of money with little effort. All of the economic bubbles have been built on this tendancy. The dot com boom and the related boom in VC funding for open source was all about getting the big payment without doing the hard work. When the dust settled turned out a lot of those companies didn't have a clue and died.
I think there's a lot of money to be made on open source, but that's spread out over a lot of people. Support, custom development, integration, lots of useful stuff that isn't sexy and isn't going to make anybody fabulously rich but is valuable and will provide a more than adequate living for a lot of people.
I think if anything open source is a big bomb shell for the whole notion of making the big money. A lot of companies who got cozy making proprietary software, charging huge license fees and then selling exhorbitant support contracts on top of that are in for a big wake up call. When everybody can have access to the code you don't need to be addicted to one vendor. That breeds competition, and competition drives down prices. Those companies that can provide the best services for the best prices and can create the best brand will be the ones collecting the money in the future but because they necessarily must be efficient it won't be the really big money.
This sig has been temporarily disconnected or is no longer in service
There is one here. And there are others. You just won't hear about them on Slashdot.
No replies made to AC posts. Please log in.
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...
Rosanna Rosanna Danna: "The key to making OpenSource profitable is banner ads. Preferably, big banner ads that use a lot of bandwidth. Adding a navigation bar at the top also helps. Also, you should change your name to whatever the latest hot release is."
Chevy Chase: "Rosanna, VA Software tried that and it didn't work."
RRD: "Never mind."
Phase 1: Steal the Underpants.
Phase 2: ?.
Phase 3: Profit!
That'll only work for Gnome.
Okay, now this is thoroughly tongue-in-cheek, so chill on the flames, but here are my predictions of what you'll find yourself saying if you choose to invest in Open-Source companies...
...when you see your portfolio statement...
...as above, if you're American...
...describing the outlook for profits...
...what you'll mutter to yourself constantly
...to your broker who recommended Open-Source companies...
...as above, if your broker is female...
...what you'll call the CEO...
...what you'll call the CEO if you're American...
...and don't forget the CFO...
(Thanks to Merriam-Webster for the pronunciations.)
In fact, Sleepycat's business model stops working if the Free Software revolution has taken place because no one would need a proprietary-compatible license for Sleepycat's software. ACT's business model continues to work because their customers still need support, and still pay for enhancements to the GNAT toolchain.
I guess Sleepycat is just an Open Source company, but not a Free Software Company. ;-)
The only way to make money in open source is hardware revenue. IBM and Apple both understand this, but apparently no one else does.
Yeah, it has problems. If you can't work out a license change, no big deal. Never hurts to ask or offer, tho.
.sig: Now legally binding!
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
Open Source per the ever-present GPL is fundamentally opposed to making money. It is, in fact, actively discoraged. You are forbidden from incorporating publically-gathered code into a propritary library or program without releasing its source as well. Lets say that Microsoft did this with Office, released the source code. Then someone came along, and fixed the bugs in the source, and sells it as a different product. 100% office-compatibile, but better than the real thing. Sound like a good business model to you? I didn't think so.
People in OSS generally are totally open source and won't try. Anyone who tries to make money while following the terms of a license that almost prohibits making money off the intellectual property is asking to go bankrupt. The product may be sound, but the business practices aren't.
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
I had an idea once to do dual licensing along the lines of what Sleepycat is doing. My biggest concern was what to do with patches to people submit to the open source licensed version. I wouldn't own the rights to the patch, so I wouldn't be able to redistribute it with the proprietary license. I would need to get their permission to dually license the patch as well. My thoughts on this were, why not pay them for ownership rights to the patch? Maybe $20 for a simple bug fix or much higher for substantial new features. Just a thought - maybe this would encourage outside improvement.
-----
Free P2P Backup, Windows & Linux
Well umm the guy said they dont have any outside money and they depend solely on revenues...
Plus umm Red Hat or Mandrake arent exactly techy sounding names, if thats your criterion for investment anyways
Democratic USA - Government of the corporations, by the Corporations, for the corporations.
It's not a get-rich-quick business, but it's a real one.
Consider a "we'll convert your company to Linux" business, for example. Set-up, training, tech support, customization, all those people-intensive functions.
Yeah, I wondered about this too.
A GPL license still applies even to the company that issues it. Just cos you wrote it doesn't mean you're uniquely positioned to sell it under both a GPL license and a proprietary license. Sure, you can cobble a license that looks like GPL, but has this tiny little amendement that permits dual licensing...
That's harnessing the hard labour of the Open Source developers, and saying "Thanks lads, we'll just take all your hard work on enhancements and fixing the bugs, apply it to our proprietary version, and we can then flog it off under a closed source license to the big boys, who can flog it off in their proprietary stuff, etc."
They should come clean on this. It's a BSD license in GPL clothing!
Nothing wrong with a BSD license of course, but at least it's upfront and honest and let's everyone know that it's free to be utilised in proprietary software.
A true GPL license has no back doors.
And yeah, the LGPL is a fine compromise and marks clear boundaries between GPL code and potentially proprietary code. I got no problem with companies utilising LGPL modules alongside proprietary ones.
Hmmmn....
Just went to http://www.gnu.org/philosophy/license-list.html
and it says:
"The Berkeley Database License (aka the Sleepycat Software Product License).
This is a free software license and is compatible with the GNU GPL. "
Maybe the GPL should apply to the issuer of the license too???
Can a company really release software under the GPL and yet re-release it under a separate closed source license?
Sure, they can say "Ah, but we don't look at or incorporate anyone else's changes to our software. Our proprietary license only applies to software developed in-house."
Yeah.... right...
What about bug-fixes? "Well, we have a clean-room of developers who re-engineer a solution to each bug that is reported".
So this is a bit like holding Open Source in contempt then? You're not actually interested in any of its potential fruits (apart from bugs getting reported), so it's only an altruistic gesture? It's like saying "We basically have a proprietary licensing model, but because we're convinced that public distribution of our source code represents no threat to our business, we're happy to ride on the coat tails of the Open Source movement. Our licensees like to have our source code anyway, and an added benefit of making it public is that it helps prevent bespoke developers end up with a competing product they've been forced to develop from scratch. But, no, although we republish our proprietary source under a GPL-like license we're not really Open Source developers".
So this is not an 'Open Source' company making money. It's a normal software company that has no worries about publishing its source code (that is restricted to further development by a sector of the development community that it doesn't perceive as a competitor).
If it had been put this way, it wouldn't be remarkable, it would have just been sensible, enlightened practice by a commercially oriented company.
But, instead it has been put in a way that tries to portray the company as an Open Source development company.
Consider this - I happen to really enjoy what I do. For me, doing what I do for a living is enjoyable. It has its drawbacks and its share of headaches, but I happen to enjoy it. On the other hand, staring at a bunch of trees all day would drive me insane.
So to you and the AC who talks about priorities, well, mine is doing what I do.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix
Ok, I'm sure I could run through my submission records and just find something to cut copy paste, but everyone here (or a good number) has missed a very important point about the GPL and Open Software, and always miss it. Maybe that's an american thing too :). Anyhow, just to repeat myself (and I'm sure others are typing this up as I am right now).
Just because I sell software under the GPL -does not mean I have to give it to you free-. It just means that whoever I distribute - or trade for women, booze, chests of gold, fast cars, whatever - binaries to also gets the source code and the ability to do whatever they want with that source code. Nothing stopping them from turning around and selling it for even more chests of gold! The key point is that they are free to do whatever they want with the software what they want after delivery of the product, as long as they stick with the terms of the GPL.
In many open source projects, everyone can get a binary, so everyone gets the source, too.
This means there's great money to be made in producing customized software for people, scratching other people's itches, you name it. What I see open source doing is commoditizing the common tools - the compilers, the kernel, the window managers - and providing a free platform that the customized stuff can be executed and manipulated on. The customized software, or the engineers working it, is where the money part comes in for most companies, that I can see. The things that Ximian is going with gnome is part of this. I'd have no problem chucking Ximian a few bucks a month to maintain versions and dependencies so I have a up-to-date framework to work on.
There's lots of money in Free software, and it's about freedom - those who pay for software can do what they want with it. Read the GPL. It is quite a departure from how things work now, though.
..don't panic
I'm sorry, I didn't want to be too harsh, it's just that leaving a place you've always known and moving to another country is hard enough, without moving into small-town version of same, with way different customs.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix