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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*
I am aware of a number of medium sized software developers producing specialist systems for specific industries, who are considering 'going open' and charging solely for deployment and support. I come into contact with these systems pretty regularly through my work - and usually call the company to ifnd out what their plans are as much through noseyness as need.
They are considering it for a pretty simple reason - giving software away, and making it open so the client doesn't HAVE to buy your service agreement, gives the client great confidence in YOUR confidence in the quality of your service.
Most users of such systems understand that the service component of the charge is the 'expensive' part anyway. By going open source a company can relaunch, give away the software and offer 'as you need it' support at rates likely to undercut the opposition.
Open means customisable, which opens up another potential revenue stream to the producing company.
It also lets the pain in the arse customers do some modifications themselves. One or two of these can account for 60-90% of ongoing support effort for some of these companies.
You don't have to go 'open source' to follow this business model, but its a great shorthand, and a great differentiator. Anyone work in a firm thinking of following this route?
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.
In the end there will probably be a small handful of business models that are really successful. But things are still evolving to quickly to really know what will work. Especially given the current 'irrational negativity' (in contrast to the 'irrational exuberance' of recent memory), it's too early to tell what will work and what won't.
RedHat is, in a way, in the same position as IBM. They've already established a strong reputation and consulting organization and don't need proprietary IP to compete. A small company with no track record can't successfully compete with RedHat.
The same isn't true for a lot of smaller Open Source companies. Small companies can spend a lot of time and money developing an Open Source product, and then find a competitor selling against them using the same product, but with no investment in R&D. The client can't tell the difference, so in the end it comes down to straight marketing, with no points given for actually having developed the product.
My company has faced this situation in the past and now we develop custom proprietary applications on top of an Open Source platform. We still believe in Open Source, but for now we need to keep some stuff to ourselves in order to compete effectively. I'm hopeful that over time we can swing back towards Free software - after all it does help to produce better software. Perhaps after we've had more time in the market and are a little more established. Or perhaps we'll open up certain pieces of the product while keeping more specialized functionality to ourselves. It's hard to say.
It is clear that Open Source/Free Software is here to stay and will take a big chunk of the software market, but individual participants have to find a formula that works.
It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. - Abraham Maslow
It's the developers you are paying. Why are we paying for software? It doesn't cost anything to copy software, just 5cents or so for the cd and however much for the printer manuals and box, if you even buy that part. We should be paying for developers time instead, this is where open source fits in.
Let's take an example. The Linux kernel is free, everyone can download it. So how do people make money off of it? Contracts. A company can hire out a person to write a kernel module for their new hardware. The developer gets paid by the hour to write the module and the module can be released open and free. Then later another company can hire someone else to make another module and add it to the kernel. All these contracts may be small, but they keep adding to one big project.
Now this only works with Free Open Source software that can be incrementally improved. A large game for end consumers won't work with this model. What company is going to pay a large group of developers to make a giant game and then release it for free? Maybe as Open Source, but not free.
So Open Source developers should get into contracting to work on open source projects that can help large companies. If a project is Open and Free, it can help everyone and save money for large companies as they don't have to pay for large software packages and then upgrades... and Open Source developers can still be paid.
Outdoor digital photography, mostly in New Engl
The point has been made many times here before, but bears repeating once again: Free Software and Open Source are two different things, regardless of what you might read on ZDnet.
- fr eedom.html
"Moving to a proprietary system also can spur ill will. Because of the freedoms afforded by the open-source movement, older versions of software may live on as competition. The Free Software Foundation, founded in 1984, continues to work to ensure open-source versions of programs live on as long as possible."
Not true. The Free Software Foundation was established to promote and support Free Software. They have nothing whatever to do with Open Source, and are careful to say so.
http://www.gnu.org/philosophy/philosophy.html
http://www.gnu.org/philosophy/free-software-for
The term "Open Source" is much abused, because it lacks sufficient precision. Everyone from authors that really want to encourage software freedom but do not always want to use the GPL, for entirely honest reasons (e.g. the BSD folks, Eric Raymond etc.), right down to parasites who care only about a quick buck (e.g. most of the shiny-suited salesmen who leaped briefly onto the Open Source bandwagon), call themselves part of the "Open Source movement". It's a conveniently huge umbrella under which even Microsoft might have fit, had they needed to. It was started by well-meaning people for the right reasons, but with a flawed charter, which may or may not be fixable at this point.
It's not necessary to agree with everything the FSF and Stallman have ever said to see that they are right about several things. One of these is that a genuinely Free Software license can be an effective way of reducing your risks, if someone decides to close part or all of the source of software that you or your business depend on.
Perhaps this is a necessary and inevitable shakeout, where we'll see a clarification of what the world wants from software freedom. It comes at a time when many different freedoms we take for granted are under attack, from many sides. In the case of software freedom, we will need to look hard at what we want, and what we're willing to do to defend it.
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 point isn't whether Open Source companies can stay Open Source or not. The companies could all go bankrupt and it wouldn't stop Open Source. Before it had a catchy name, Open Source was just people writing programs that they wanted for their own purposes, and sharing them with other people. The loss of a few trendy business models won't change that.
In fact, it might actually help Open Source in general by sweeping out all the cruft, just like the current slump is cleaning up the dot-com fad. The people who are left will be the ones that develop Open Source software because they just care about having the software, not because they want to capitalize on a freely available army of developers.
Before, developers (or their companies) wouldn't openly release things that they felt really created a competitive edge. (Non-software companies didn't try to sell such systems either. They kept the advantage for themselves.) Now, these Open Source companies are trying to make a profit from creating software that, by definition, is their competitive edge. And they want to release all the source? Not likely. I don't want to sound like one of those people who yammer about how Open Source advocates shouldn't want everything for free, but it doesn't surprise me that these companies are dropping off and selling out. In the end, it doesn't really matter- the heart of Open Source exists outside of these companies.
--WH--