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How Can Companies Profit While Giving Code Away?
An anonymous reader writes "In an almost philosophical essay replete with references to everyone from Larry Lessig and Tim Bray to to Professor Yochai Benkler, Sun Micrososystems evangelist Simon Phipps explores the metaphor of subscription (well, of course it's not just a metaphor any more from Sun's point of view) as the way that companies will make money off of deploying open source solutions. His distinction between OS developer and OS deployer is useful, but the crux is his contention that, with a "system" such as Sun has put together like the JDS, 'You don't buy the software from Sun - instead you subscribe to the editorial outlook.' It's an alluring analogy - Sun as the editor-in-chief of a 'publication' (JDS) with readers who may or may not choose to subscribe. Worth reading."
There is so much good open source software out there (my most recent find was a sweet little bookkeeping package called Lazy8 ledger) that gets very little promotion. I'd guess that there are many, many useful packages and programs that if I knew about I'd use. So I can see significant value in "editing" open source into useful groups. Also, I've long thought that it would be nice to see a "starter's" edition of Linux that reduced the choices of packages available to the "best" pieces of software. Nothing against vi and EMACS ed and the others, but does a first time user really need to choose between 12 or more text editors (or two desktop environments or three office suites, etc). I realize there are tremendous advantages to having diverse software offerings, but it's not as useful for the first time user.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Advertising has to be seen/heard to be effective. Comments in the code will not be sufficient. The ads will have to be inherent in the GUI or something... like your background has to be like one of those billboards that changes every few minutes. Maybe some add has to pop up first before any application you activate runs...
Sounds fun and wonderful...
IBM has realized this, and is building up their services business around this model, and it would be great if companies like Sun join the fray, to keep the competition there.
I also liked the portion of the essay where he talks about being able to pull together all of the components yourself, and support it yourself, or to pay someone else to support it for you. The first part of that is why I used OSS, and the 2nd part is what is currently lacking to make OSS more generally accepted. While there are people that will need support, there are some of us that just want the choice, freedom and flexibility, and OSS seems to be the best way to provide both right now.
It's more about newspapers: yesterday's news is not news. The assumtion is that old news is worthless; therefore, old newspapers are worthless.
Old newspapers are nearly worthless. It is worth having an archive, but only a few of them, so old newspapers are worth very much less than their cover price.
So... by anology, old software must be worthless. Hmm. 'Old' webservers are useless ('cos they will get r00ted in no time). But old, offline typesetting software? Pfft. 'Old' here really means 'unmaintained'. I think that an analogy with rusty machinery is a better one for unmaintained open source software:
at any point you can take it to a mechanic to get an estimate on repairs;
old models continue to be useful, in certain applications, as long as they are adequately maintained.
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I've always wondered about this. If you write good enough software, with simple install, concise manuals, etc., people shouldn't have to call you for tech support; essentially ruining any chances of you giving away the software for free and surviving off support calls. Or are you meaning charge for adding new features that specific customers want?
The emphasis here is on incentive.
Just something to ponder. Stephan
http://stephan.sugarmotor.org
The support model has its applications, but it should be plainly evident that it's not enough for everything. You know you're hitting the corners of a flawed philosophical system when doing something like writing intentionally mediocre documentation can be a (admittedly short-term) profit incentive.
People use BSD-style lincensing to allow people to see and use their code. People use the GPL to allow other people to see and use their code and not let commercial packages make use of them.
"If someone uses my code in a commercial product, then they're making money off my work!"
Well, if you really think about it, since they have access to your unmodified free code, they're only really paying for the extra features offered by the commercial code. What's so bad about that?
Our company, profits selling hardware, while most of our engineering effort goes towards our open source software, SlimServer. The open source part of our business has helped us build an great community of users. Some of our users don't buy the hardware but contribute nonetheless, making our hardware, Squeezebox, more useful and valuable to the folks who do buy. It's a business model that's working for us right now.
Wtf?
Well, I believe you meant to say the code is free, so you always get the releases that way if you want, but without the subscription you don't get the binary releases.
Anyway, without the subscription, apart from the binary relases, you also don't get stuff that aren't open-sourced, like the safe-disc circunvention, and some DirectX/3D stuff, I believe (not sure about that one though).
I wrote something similar yesterday...
Sometime in the 1940's Nestle approached Mrs. Ruth Wakefield, the inventor of the chocolate chip cookie, and purchased her recipe. After purchasing it, they gave it away by printing it on every bag of chocolate chips.
Why would they do this? They PAID for that recipe! Why would they turn it around and GIVE it away?
Nestle was not in the business of selling cookbooks, and they were not a restraunt. They are (among other things) in the business of selling chocolate.
By giving away that recipe, they gave everyone a reason to buy chocolate chips. They couldn't patent the recipe (recipes aren't patentable), but they DID trademark the name "Nestle Tollhouse Cookies". Today, that is a brand that makes a considerable amount of money selling chocolate chips, selling prefab cookie dough, and selling cookies in shopping malls.
Why would someone pay a dollar for a cookie at a store in the mall whenthey could make that same cookie for 20 cents? Convenience.
So, people make money off of open source by providing the goods necessary to USE the open source, by providing services around the open source product, AND by turning it into a recognizable BRAND (ala Red Hat).
This is not a new business model - it is actually very old. People just think of it as new because of the huge impact it has had in recent history in a new market.
To make a profit you have to make an income greater than your expenses. Your total gross earnings must exceed your costs.
There are many ways to make money as a GPL using company. You can:
a) Sell the software in a box on a store shelf.
b) Sell the software on CD from an online order form.
c) Sell the software or ask for donations online via PayPal, Visa/MC, etc.
d) Offer commercial customization options online so anyone who uses your software can purchase enhancements.
e) Offer support services so anyone who uses your software can get support.
f) Sell documentation.
g) Sell certification.
h) Sell training.
i) Sell merchandise using the software and your accomplishments as advertisement. A simple contribute/donation option and a url link are much more pleasant than a full screen flashing advertisement from the perspective of the customer.
j) Sell systems designed to run your software.
k) Sell yourselves, offer money in exchange for your time on interviews, presentations, implementation/contracting, analysis/design, review/benchmarking with news and mass media, etc.
l) Ask for donation (politely) from other F/OSS organizations if they are using your software.
m) Be evil and try to make your customers pay by only offering the software for sale on your website, for very high prices, with marketting fluff and very little internal information so your customers can't tell what you do (if anything) to your software behind the scenes, then only give your source code modifications to the people who ask for it and only if it is required because you borrowed your source code from someone else because you were too [slow|stupid|lazy|greedy|cheap] to do it yourself, but unfortunately (for you) they were smart enough to release it with a GPL style license. So now you claim they don't exist and threaten to sue everyone who uses any copies of this software that you didn't authorize, build up your army of lawyers and plan to take over the world.