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Can Open Source Companies Stay That Way?
JoeGee writes: "According to this article on ZD Net, more and more companies born from open source projects are beginning to move towards closed source products as a source of revenue. Version 5 of GFS will be closed source, and even SuSE's director of sales Holger Dyroff has a quote that seems to disparage the service model of revenue. The one company that refuses to change its operations is, surprisingly, Red Hat. Red Hat CTO Michael Tiemann says 'We believe the Red Hat brand stands for open-source.'" Yes, this is a dupe. Bad Tim! *whack*
My first experience with this model was when I was trying to get Corel Linux installed on my system.
I was not about to pay over the phone for support, and I found a few websites that did offer free messageboards.
If you think you're going to base your business off of service revenue, then you shouldn't make something and expect to sell/distribute exact copies of it.
I can see someone personalizing on a case by case business, and it would make sense to charge for the support then. People would basically have to come to you, or to someone else that can code at least.
It is too bad that so many companies are affected by this so much that they are going closed source and/or out of business.
I have 3656.9 Bogomips. How many Bogomips do you have?
Does moving towards Closed Source Products ensure every one will live happily ever after? Look at the number of Closed Source Product Companies that have shut shop. It is probably not the model, but the condition of the economy that is responsible for the poor performance.
In God I trust... on others I use dsniff.
Why is that surprising? Red Hat have previously done the part-open/part-closed thing, and realised that it doesn't really help that much, and that well packaged all open source packages are just as marketable, cheaper to license and earn you good will in the community. Most of the other companies (SuSE excepted, as the YaST licensing was clearly designed to protect their market) are just ill-thought-out dotcom cash-ins struggling to cope with a dose of economic reality.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
How is this surprising? RedHat has always been one of the most staunch endorsers of Open Source/Free Software. Did anyone else watch the videos of the O'Reily OSS convention? The RedHat guy was amazing. And how about the comment posted yesterday (about RedHat willing to give Free Software to every school in the US) ? This doesn't surprise me at all, I don't see how it would surprise anyone.
I really can't believe he said that! If nobody (including presuambly SuSE) cared about profitability two years ago how can these people be serious about running a business?
I can only assume he was being somewhat facetious.
Why is it suprising that Red Hat should remain Free? They have always released all their source code and have cut paychecks for many an Open Source programmer. For them to remain steadfast in their policy is hardly suprising.
Personally, I don't use Red Hat Linux as I find it rather byzantine, but I have always held them in the highest regard when it comes to their ethical stance on Free software.
Since the last time this article was posted, I have worked out my comments a little more completely and posted them to Oomind. Basic summary: recession is bad for capitalist enterprises relying on OSS business models, but good for the community aspect of OSS.
Helping with organizational effectiveness is our job.
They have a lot of smart guys, they took over Cygnus, they employ people like mr cox to work remotely. If you want the GNU compiler chain ported to your new processor, or even architecture (like the PS2), they can do it. You want a custom linux kernel, they can do it. The support companies that are folding are those that do "easy" support - installing linux, configuring networking, etc. just isn't that difficult.
It was marked as troll because it dismissed a lot of very talented and experienced programmers as "geeks in their bedrooms," it made an inane analogy with farmers when we all know that software, unlike food, can be reproduced without cost and often requires maintenance, and it missed the whole point of Free software in general. If he had said, "Basing businesses around Open Source was a mass delusion," then he might have had a point and probably would not have gotten modded as a troll. But to most of us that have been using and contributing to Free software for years it has nothing to do with business, it is a community effort to build ourselves a computing environment that we control and can be happy with.
The vast majority of open source software available has been produced by individuals or not for profit groups. Look at most of the major projects, the Linux Kernel, GNOME, KDE etc. These are not funded by companies, and if all of the companies trying to make money off of open source were to disapear tommorow, they would carry on.
Sites like ZDNet are fundamentally biased towards thinking about the world in terms of companies and their success. This is how they have always worked and why they don't understand the os world.
Yes, corperate help can speed up developement of a system but it isn't critical.
The way I see it, there are three business models that can, and have worked, and two that won't.
The Red Hat way - Selling totally open systems with support and (shock!) manuals etc. Adding something to a fundamentally free product.
The IBM way - use free software as a base for your proprietory products. Why make your own UNIX when there is a free one. Mabey give developement back to the community.
The QT way - Create a product that people have to pay for if they make money out of it, but is free if they don't
The VALinux way - This is just another dot com and isn't really about open source, they just work off the open source community. The sourceforge model is broken in the same way as...
The sistina way - Provide a product that is both open and closed source. This will fork. Unless the closed version is a long way ahead of the open version people will not pay serious money for it. GFS is not protected by the GPL in the same way as QT. I could package GFS (gpl version) with a closed source product and sell it, I can't use QT in closed source without paying.
Of these, only the first three will work. Red Hat does not depend on a massive in house development effort to produce its product (unlike sistena). IBM and QT are both profitable companies. IBM is using Linux and Apache to reduce costs, and gives a little back in return, especially where specialist development is needed, but again it does not involve a major (relative) developement effort. Trolltech makes money, but gives its product away to people who do not make any money out of it, thus increasing its visibility. I hadn't heard of QT before KDE came about.
VA Linux is just a web publisher like any other. Sistina is fighting a loosing battle against its own technology. Once something is GPL'd you can't unGPL it.
Whatever ZDNet says. Open Source will continue for the same reasons that it got started in the first place, because people enjoy writing software and creating and sharing something, and mabey for the kudos. These are the same reasons that I want to start my own project (a developent env for Prolog), not for the money, but because I enjoy it, and it would be an interesting challange. OS has never been about the money. If it had been, GNU would not exist, nor Linux, nor any of the other major components of the OS panthion (*BSD etc).
End sermon
Paul Leader
The "hottest" girls are invariably shallow, self-centered, and cold fish in bed.
You find some cute poetically-minded girl that wears practical shoes and she'll be a much better lay, I guarentee. ;-)
Ahh, nothing like the bastion of hardline journalism that is ZDNet...
According to this article on ZD Net , more and more companies born from open source projects are beginning to move towards closed source products as a source of revenue. Version 5 of GFS will be closed source, and even SuSE's director of sales Holger Dyroff has a quote that seems to disparage the service model of revenue.
And plenty of companies born from closed source software are beginning to move towards open source. What a world!
Any business model that sells open source software alone is flawed. If open source companies can't manage to make money, that's their problem. Business isn't easy, people.
Why doesn't ZDNet trumpet the demise of closed source? You can find hundreds of companies that are going out of business right now that sell nothing but proprietary software.
Open source is doing better than ever. And the companies that claim to be "it" are only a small percentage of the business generated around open source in general.
Everyone likes to bash RedHat, but how many other tech companies do you see out there which are alive and doing as well as RedHat is? Thats right, almost none.
They know their responsibilities, they know how to provide services and support, while still giving back to the community.
Have you looked at how much RedHat has contributed back? Last time I checked, they host projects like cygwin, gdb, etc and have turned important apps like anaconda and even rpm (as much as people say it sucks, but it is the most popular package manager out there) back into the community.
Brielle
Well, we've developed a thick skin over the years...
But our core principles have not changed. Back when Matthew Szulik first came on board, I was present in a meeting about company values. We were all kind of nervous to see whether our new boss "got it". One of the values people came up with was "no matter how big we get, we never lose our soul". When that one was read, Matthew just looked up, smiled a little smile, and gave a nod in agreement. Don't worry -- the people in charge here get it...
Of course, we've grown very rapidly. And we're finding that being a bigger company means you can't be as nimble as when the entire company could go out to lunch in two cars.
So if we screw up, please let us know -- we want to do the right thing while still making a living...
Ed
Clearly if you are offering something for free, then you shouldn't be surprised if some of the people who use it are cash-starved (or even just cheap). This had better be factored into your business plan.
... it might free them of maintenance costs [use the GPL here!]). You might like to have the right to reuse the code, so you could give them a cut rate if an Open Source license were used (they might release the code to you, with the proviso that if you reused it you would need to make the changes available back to them ... GPL would simplify the bookkeeping [with them as the original owner, so they could decide to release it, or a modified version of it, under any license that they choose]).
If someone downloads software from you, they have cost you
1) the price of a download, and
2) the loss of the chance that they might have purchased it (but some of those will purchase it if they like it).
If they get support from elsewhere, this isn't a cost to you. Your loss is that they didn't buy it from you.
Now adding these together, the total cost if someone is cash-starved or cheap, is the price of a download. This cost needs to be a part of your business plan.
The real question is, why should anyone purchase from you? That's the question that needs to be answered. There are 4-5 major distributions (of Linux), with slightly different flavors, which satisfy the answer "because it's easier". And there are numerous minor ones that may make enough to keep afloat, but probably won't be able to afford to become major. Several of these probably survive on being consultants. But that's Linux.
Text editors?(As an example of minor applications): One person can write a decent text editor. This may be a personal ad: "This is an example of my skills", but it's unlikely to be a major financial prop of anyone. A few companies live in this niche already, and there are many free examples, so it's probably full. But if you write a good one, you can probably give it away as free (the costs are sunk) advertising.
Larger applications? Either you are working as a part of some group, or you were hired. If you were hired, the company may not care whether or not the source code is given to others (or they may prefer it
Lots of special cases. Not many general ones. The real point is that Free Software isn't usually about making money, or even saving money. It's usually cost neutral, or a hobby activity. But in special circumstances, it can make money. Open Source is a bit friendlier to making money, but sometimes doesn't work as well.
However, Free Software can help you *SAVE* money. Used as components, it can reduce your development expenses. This is where GPL shines. And if it becomes popular, then your maintenance costs can descend to nearly nothing (but don't count on this one!)
So generally the only people who make money off Free Software are the consultants and the end users. But there are special case exceptions. The problem is, most software companies tend to think of themselves as being one of those "special exceptions", but they are rare.
I think we've pushed this "anyone can grow up to be president" thing too far.