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Commercializing Open Source Software
CowboyRobot writes "Michael Karels, system architect for BSD 4.3 and 4.4, has an article on ACM Queue about the challenges in trying to make money from open source software. From the article: 'As users of the software, open source contributors have certain common interests in making the software stable and usable.' but 'When additions require modifications to the base system, there may be resistance to incorporating the changes.'"
isn't that why OSS projects get forked?
Karma: Bad. (As in Good?)
The only way that companies are really going to make big money off open-source is to in a sense, drop open source. As long as they can sell something that can't be given away(such as the Finder in OS X), there's money to be made. Otherwise, they'll sell support contracts here and there, but no company is going to make it in to the "big time" with just support; even IBM has other buisnesses.
A number of users have suggested that I charge for custom work, but when I ask them if they would ever pay for cutom work, the answer is always no.
Here's what I do: Bitty Browser & Andromeda
I think offering Subscribtion services is about the best way to make money with open source (Transgaming, Lindows, Slashdot?, even tech support).
Is that a record?
Does anybody have the text of the article?
Karma: Bad. (As in Good?)
many free programs pay off for the developers because they charge for support. without proper support software is often not worth considering for many organisations, so that's a convenient way to raise funds for further development. Even more i don't think that making certain changes for money is a bad idea (as long as it doesn't compromise other parts of the program or makes it incompatible to prior versions), for all of the users will profit from it, the buyer gets what he wants and the developers get money they need to further develop the program.
".Sig Stealer" was here
The problem comes in the nature of the beast. It's like art really. Artists perform their art because it makes them feel good to share. And they want everyone to be in on it. The same can be said of Open Source. People code Open Source cause they want to not only create something for themselves, but to give it to the world. The problem comes in, about the same time as it hits the artist, when they want to put more time and energy behind their creation. They start to realize that the only way to dedicate more of their lives to this brain child of theirs they can't be bothered by things as mundane as work, or bills. The only solution is to make their brain child their job!! But because of things like the GPL, they've effectivly shot themselves in the foot. They can no longer sell their brain child. They can't even offer it for a measly $20 unless there's something else they can give with it. Thusly the support angle. Why do people go out and pay $60 for a copy of Red Hat when they can download .iso's or do an FTP install? Because if they pay, there's some guy who's sitting by a phone, and he's perfectly willing to help them when they fuck it up. If more OSS coders went non-OSS, and offered the source to purchasers through some new liscencing system the OSS movement would die though. I didn't say I had a solution, only that I think I have some insight as to the problem.
Kleedrac
Sure we wang, can.
I believe in open source (or at least want to). But I think money rules in this world. If you look at other forms of Media and Art, giving stuff away won't get movies like Matrix made.
This is not to say that there are not many, many very good independent films. I'm just saying that maybe Linux and other Open Source projects are trying to hard to get the wrong market.
With "limited" resources a focus should be made to take the server market from M$, drop the GUI crap, Linux WON'T win on the desktop (at least not yet). But can easily win on the server.
Michigan Photography
Perhaps we shouldn't be trying to commercialise OSS. Perhaps we should be trying to commercialise the businesses and products/services which rely on OSS.
For example if I set up a cybercafe and write some software to deal with scheduling and billing, I'm not looking to make money from it. Instead I'm looking to make money from the business that relies on it. Providing a service is what is going to make me the money, and by opening the source of my billing software I may find a wealth of people willing to help me improve it and to use it themselves in other commercial products which pay their bills (and not mine). I get free upgrades and enhancements and they get the basis of a product that runs their business.
It's just an idea, and I'm no economist, but I have a feeling that this sort of set-up could work in many situations.
The key is educating companies in to believing that it's their (civic?) duty to contribute back to the OSS products they use. For example, if every business that uses Linux and has more than 1000 employees were to donate the time of one employee to improving Linux (working full time in the OSS community), we'd see pretty rapid improvement. People are begining to catch on (IBM, Red Hat...), but more of the same would be nice, IMVHO.
I'd love to spew forth the vitues of Andromeda, but this thread isn't the right place. Take a closer look at the Andromeda site, and if you want send an email and I'd be happy to explain more...
Here's what I do: Bitty Browser & Andromeda
1 - develop a application ( you know how to do it, no ?
:)
:)
2 - try to "sell it" to as manny organizations as you can (for free).
3 - Make a contract with those organizations (for maintenance, bugfix, feature add)
4 - make it available to the world as open source.
What the organizations get:
1 - A "free" software. Maybe not the best there is, but sometimes they need months to decide on what to use (because it costs a lot of monney), but they need something now. There comes your program. And believe it or not, most times, your program will be the "final one".
2 - Direct contact with the developper
3 - A rapid deployment.
4 - Low risk (if you don't charge much for your software
What you get:
1 - costumers !!!
2 - flat fee revenue (aka you know what you're going to get in the end of the month)
3 - going open source enlarges your app "possible customers" universe.
4 - You can still get lot more customers with onsite or remote support for instalation, bugfixing, feacture adds.
What the world gets:
1 - Open Source Software
2 - open source software development backup up with real money.
I adopted this in the last 3 years, and its working great
The fact is, most support is of the getting-started variety. Do you expect those people to pay for support *before* they have their software working? Or do you help them get set up for free, after which they have little need for support?
And if somebody writes to ask: "hey, quick question" Do you reply, sorry, but that'll be $5 first.
Here's what I do: Bitty Browser & Andromeda
Keep the core of the OS opensource, and make a really nice GUI that closed, and is really what your paying for. Now if Apple made a nice GUI for Linux, and sold it, now that would be awsome, but it would jeprodize their PPC sales.
I've got all the fancy dress I need already, thanks.
I've always thought that ghostscript had a neat idea in that the latest version is released under a different license and older versions are GPL'd. Why not charge for the most recent version with the newest features and release old versions with lesser functionality than the current as free and maybe even in the public domain. If there's not money to be made on old outdated software, why not release it free and open source? Sure, you might make a few less dollars, but you'll make yourself a lot of new customers in the process, too. I know there's always shareware, but it tends to be severely crippled and has a 30 day time limit on it. The point is, charge for the newest major features, and release older and fully funtional versions to the public free and open sourced.
Red Hat makes it's money from support from Corporations, it may have trouble turning a profit right now, but when the marketshare expands even more, then I don't think they have much trouble. Red Hat has a good buissness model, their pricing scheme maybe a little shaky but I think it will change. Perhaps what they should do, is have releases every two years instead of one, support both releases, then in another two years drop support for the old one. That way you'll get a good four years out of a product. I'm not a market expert, but I could work. Its better than a one-year product life.
> But because of things like the GPL, they've effectivly shot themselves in the foot.
If you dare to read the article, you'll find an amazing way of making money off GPL (look for 'Dual Licensing').
GPL requires the derived work sources to be published under the same license, which is unacceptable to many businesses. However, one can always bargain with author for separate license for their specific project.
Anecdotal evidence: I was involved in a proprietary project where we needed a very specific functionality. The opensource library doing just what we needed was there, but licensed under the terms of GPL. The contact with author revealed that he is perfectly willing to relicense it for us for a nice amount of $35000. And it really was an OK price because reimplementing the necessary functionality from scratch would cost the company considerably more, and we wouldn't fit into the timeframe anyway.
Lisp is the Tengwar of programming languages.
people have been trained to do two things with software, purchase and steal. i cannot begin to tell you how many requests i get for office or windows cd's from people who don't wish to pay for it. fact is, mainstream computarded L-users feel better when they've shelled something out for the software, even if it is free. like carnies, we have to take advantage of the marks, because they ask for it, and wouldn't be entertained otherwise.
beyond that, i wish that lycoris would put OO.O on their distro, just so i could hand out disks of their stuff and not tell anyone what they're getting, let them use the stuff and be happy, like the most illiterate of my clients who get free software every time they ask for a crack.
"You never want a serious crisis to go to waste." - Rahm Emanuel
What if someone goes and releases your old software, with added functionality, as a derivative work and starts making a profit off of it? It could be a bad business decision to do so. That's one place where shared source (Microsoft's license) gets it right. It's not really open source, but you still can see the code you're running. Perhaps allow it to be released non-commercially, but not sold for a profit. You can't just release it open, though, most likely. Perhaps the GPL would work here, but I think restricting commercial derivative works is certainly necessary to make it possible.
I have been successfully running my own Free Software Business for the past 2 1/2 years. Every quater I hit or exceed my targets, and comfortably in profit - might not be rich but certainly have perfectly viable long term business.
My company provides consultancy, support and training ontop of the open source project I lead. The key to success is that the project competes well in terms of functionality and robustness with equivilant commericial products, and that you provide the services that the market requires ontop of that product.
FSB's really are little different than conventional companies, if you provide and product or service that the market want at a price that is reasonable for the customer, yet profitable to provide, then you're in business. It really is very simple. Robert Osfield.
This is a terrible slashdot article, no hype, no good in-jokes, no mindless "____ is the next big thing".
Next you'll expect slashdot readers to actually learn something about the history of computing, and the basics of computer science, and information technology.
POPFile is open-source donationware, if you like it you can send me money, and lots of people do.
It's the best of the shareware and open-source models combined. POPFile is released under the GPL so it's free as in speech software and free as in beer. But people who appreciate POPFile can send in donations.
John.
There are many companies that sell their source along with their product. Qt comes to mind. Qt is open, in the sense that the source can be viewed and compiled by the client, but it's not free. Trolltech can benefit from bug reports sent in by clients, but the client can't modify and release the source(at least with the commercial licence).
So, open source can be sold. Whether free software can make money, that's another story all together.
I choose to affect change by passing on the money. By devaluing things others charge money for, you affect change by making it harder for the establishment to compete. Example: If Wal-Mart wants to use your database software on their network you have about a snowball's chance of even finding out about it, much less making them pay. But if everyone has access to that same code, then Wal-Mart has that much less of an advantage in the marketplace.
Making money out of open source software is so simple:
http://erichsieht.wordpress.com/category/english/
Perhaps a donation system such as the one found at SourceSupport could help spur on open source development.
IMHO, it is possible to make money with open source software. The secret is coming to the realization that you aren't going to make any money by packaging the software and selling it in boxes. OSS software is available for FREE, so why would a customer pay for it in box when he/she can get it for free elsewhere? Obvious point, I know.
... consulting. offer consulting services (for $$) to guide customers through custom module development, implementation, design, etc. Perhaps you could even offer high level technical support for $$ -- opportunity #4. Web design services for the Cow CMS -- opportunity #5.
So, how does one make money with OSS? Services. Granted, incorporating and building paid services around your open source software may not be simple in all cases, it can be applied very well to certain types of open source software.
For example, lets look at the CMS arena... lets say that I have a OSS CMS called "Cow". I make Cow available for FREE to anyone that wants it. BUT... Cow, being the sophisticated piece of software that it is, requires a web server with certain dependencies. Some people will be able to setup Cow and run it on their own web servers and some won't. There's the opportunity for service #1... specialized hosting for the Cow CMS. You can charge $$ for specialized hosting of Cow CMS based websites.
Since our fictional CMS (Cow) would be modular, you as the developer could make highly advanced and highly functional modules available to end users for $$. Perhaps they need a eCommerce module with some advanced capabilities. Perhaps they need a specialized payment gateway. There's opportunity #2.
Lets say that Cow CMS has grabbed the attention of a few big web sites. Now, you have some real commercial entities showing interest in the CMS. Opportunity #3
See, I think it is possible to make $$ with open source software by adding services of real value around the software.
A few random thoughts for the "services approach":
1. The software has to be good and have at least the majority of functionality of commercial competitors.
2. The software should be able to run on the windows platform.
3. The UI should be of commercial quality.
4. Not every type of OSS software will lend itself well to the "paid services" approach. CMSs are a good example, as would be any type of specialized vertical market software, such as Medical Practice Management systems.
5. You need to understand your market! Understanding your market means you'll understand which services would be of real value.
Skiers and Riders -- http://www.snowjournal.com
The money is in integrating the things and making it work for people.
The other money is in CUSTOMIZING. People have a demand for stuff that works only for their situation, and demands an in-person presence that indians (in india, that is) cannot satisfy.
There's not a huge profit margin in selling commercial packages anyway, but about the same amount of time is spent making them work. SELL YOUR TIME!
(Don't buy the commercial vendors "TCO" arguments..)
Most of my clients are all too happy to get away from "license" payments. They want to spend money for actual value, and a "license" isn't an actual value, other than for the "privilege" of running a software package.
-- I am. Therefore, I think!
They don't pay for anything they can get for free.
I make money, not on support, but on development of extensions to some very specialized software which is the "best of breed" in its limited area. My customers aren't traditionel end-users, but either research institutions or consulting businesses who use my software for projects for their clients.
There are plenty of free-software business models, and the article does a good job of summrizing them, but there is no business model (based on free software or not) that guarentee you money.
For an honest busniness to be succesful you need to provide your customers with a value that is worth the price, the price need to be lower than what your competition can offer, and your customers need to be aware of both those facts. If that is true, your business will thrive, if not, forget it. Whether it is based on free software ot not is irrelevant.
Comment removed based on user account deletion
I guess you didn't check my site, because I HAVE documented the installation process, and it is not difficult. But in a world where some computer users struggle to find the switch to turn their computer on, some webmasters are going to need help setting up a script. Some of them could probably figure it out themselves, but either would rather pay then take the time, or lacking any experience with scripts, just don't have the confidence to try.
Convert RSS to HTML - integrate webfeeds into your website
when you say mainstream acceptance, it seems you're really talking about end-users and open source being embraced on the desktop. desktop users often expect a certain functionality and polish from software they use regularly. it's tough for free software to compete. . .but nonetheless the idea has caught on in the sense
Claim IP infringement, sell antidote licenses.
:D
Why are you looking at me like that?
I think you need to distinguish between two different kind of artefacts. One kind is like the movies themselves each expression is new. Very little actual footage is shared between two movies. The other is more like the art of making movies, where ideas and knowledge about how to make a movie and what works is constantly refined and passed on.
Now what is software most similar to? Movies, or the art of making movies?
Some software is clearly similar to movies, this is especially true for many modern games. In general, you want a new game to be a totally new expression, even if the concept are similar.
However, for other software the user prefer stability and incremental refinement over revolutionary new expressions. I believe the desktop is one of them, very few ordinary users are happy when the new version of ms-windows look different from the old.
The first kind of artefacts is difficult to finance without a distribution monopol (i.e. as free software or free movies or whatever), because the initial investment is so high. But the second kind lend itself perfectly to the free software approach, as each stepwise refinement has a manageable cost.
This is why I believe free software will eventually win the desktop.
Can it be done? Would it be good? If you'd license your software open source, but request a license fee for running the compiled version?
It's funny reading some of the /. readers ... you'd think that nothing but the GPL exists.
Case in point. Apple is making money off of FreeBSD's technology. And likewise, some of the FreeBSD folks are making money by working for Apple.
Granted, it took a long while and a lot of hard work for that sort of arrangement to happen -- but it shows what CAN happen... and if you can live through the lean years, there is light at the end of the tunnel.
Try sticking by what you believe in, what makes your conscience rest easy, instead of being a money grubbing whore.
Electronic Music Made Using Linux http://soundcloud.com/polyp
I think art makes the world a better place, and I think that the people making it should benefit.
For that matter, I'd also prefer to see artists getting more of the pie, rather than less.
Here's what I do: Bitty Browser & Andromeda
JFtp http://j-ftp.sourceforge.net is a GPL network browser, same as its ftp API (written by me). I can't live from the earnigs of selling licenses, but it is real money. I strongly suggest everybody who writes an GPL-api to dual license it at the beginning if you want to make money out of it (which is imho fair if a company doesn't want to be its work GPL) - if it's LGPL you can safely forget about this.
If you're interested, check out the site, and feel free to send me an email and ask questions.
Here's what I do: Bitty Browser & Andromeda
Keep it up; I treasure the "trolls" and "flamebaits" far more than the dittohead responses. In fact, I'm going to wrap them up in a bow and send'em to Torvalds...
When you borrow $150,000 to write free software and a company starts expecting you to maintain tons of extra code they need to make money on it, you're better off not writing the software in the first place.
You can write free software but you can't devote yourself to maintaining someone else's bottom line for free. Unfortunately, most companies use this against you and you find you can't get a job anywhere.
Had one company do that. They were royally pissed and went out of business because we didn't maintain the code they needed in our system. Forget about getting hired by those guys, but if we never released the free program we'd be just as hirable as someone off the street.
By comparison with alternatives, I am not convinced that Open Source's resources are (stringently) limited. A lot of the resources of companies selling proprietary programs are for less productive purposes than would be expected.
What about an advanced version with more features available for a price? Sort of like Red Hat Advanced Server. They add stuff to it, and charge more for it.
Sort of like having a bucket, which isn't full for the Open Sourced basic package but it is free. If you want more features, you fill up the bucket more for a price. If you want ownership of the code, it can be released from GPL or whatever Open Sourced License to a Commercial License for a hefty fee and then you are free to make your own private version of it.
So you could have a Document Management system designed for a single user with basic features as Open Source Licensed. Let's call it DocMan Lite. For a $100USD Fee they can buy DocMan Pro on a CD which can used a shared network database for multiple users and workgroups with advanced filtering for Client and Matter numbers, Workgroup codes, Practice Areas, and other things as well as a full text search engine. For a $35,000USD fee they can get the code released from the Open Source License and develop their own private version of it.
Of course support can be purchased, but then what is to stop someone from making an alt.software.docman Newsgroup for free support or a web forum? Then your support fees go down the toliet as people can get it for free instead of paying for it.
Open Sourced companies need a new business model, conventional business models won't work.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
In the "mainstream", one sure reason that people will pay for "free" software is convenience.
If you take a bunch of esoteric open source software, and make it easy for them to use it, they will pay.
That is probably the main driver behind the purchase of the retail box versions of popular distros. The model could probably be applied to more specialized open source applications as well.
Oh that and personality clash...
Q.
Insert Signature Here
The open source process is inherently social and political. Group leaders spend as much time on organizational matters and conflict resolution as on technical issues. When members cannot agree, the groups sometimes split into different factions. This may result in potentially competitive projects with different approaches, and possibly redundant efforts in both groups.
I actually see this as a potentially good thing. In then end, the OS project that lives is the one that more people have agreed upon and supported. I think disagreements are a fact of life, and in a way Open Source provides its own judicial system through Freshmeat's reverse popularity search.
The only place I see it as not so good is in the incompatibilities between distros. While we all like to find the one that fits our personalities best, I think in some ways it has been both a stigma to outsiders. Still, most software included in distros can be found in source and made to work on your favorite flavor. Not something for the newbie or grandma, but at least its possible.
I'm curous how the rest of you view the potential of OS projects to fork... Positive, or negative?
Ever found yourself waiting for a commercial vendor to include a feature that you consider obvious or was available in their last version? I'm sure I could knock on Microsoft's door and ask them to add, say, official support for the ext3 filesystem but I don't think I would like the price they will quote me . . . or for a bug fix.
I am faced with this right now. An oss project has a feature that some consider a security flaw and I am having some contributors to the project price out the cost of the fix. I am not paying them to write SINGLE LINE OF CODE for me, but rather paying them to fix a feature/bug that is low priority on the PROJECT's todo list, that I and other will in turn use. Only non-commercial open source allows for this kind of proactivity. Sending suggestions to RedHat in the past sure didn't work.
For years Apple has put up and taken down suggestion pages claiming that if they use one of your ideas, you could sue them for stealing it, so they make a very concerned point of NOT listening to customer feedback unless it is part of a survey with a disclaimer. Send in the lawyers!
So, in fantasy land: What if Microsoft's software was free of charge and its users paid them the exact same amount of money to fix bugs and sponsor features of THEIR design. While MS may sell a certain feature (or disabling of another) to the highest bidder, I don't see Linus Torvalds rejecting a sane fix simply because someone paid to have it written.
Most OSS appears to be need-driven, making the developer the number one customer. What's wrong with a second, paying customer? I can "love it or leave it" with commercial software (and often have left) while OSS allows me to "love it or improve it."
MD