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Profiting from Open Source Software
Secret Santa writes "Alex Salkever has written an inspiring and Linux-friendly piece about Martin Roesch -- how he went from writing open-source software to building a multimillion dollar company. Excerpt: 'Sourcefire is one of a growing number of small software players that have built new businesses around open-source code. Their business models contain various mixes of proprietary and open-source software components and span the software gamut, from other security companies such as Tripwire to database outfits such as MySQL and desktop-computing offerings like Xandros. Most are still small, with revenues well under $50 million.'"
I run a small, and growing, side business in addition to my full time job. I target only Linux, and refuse all other jobs.
My first product worked so much better than the alternatives, and cost so much less to implement, that I have no problem making good money this way.
I am currently employed by a Sourcefire reseller and must say that I really enjoy working with the company. The philosophies of most of those employed by SF fall squarely in line with my philosophies, so that helps. They don't seem... evil. Plus - they have a cool office, that helps, right?
Post-rock/Ambient/Drone and other noise.
...I have no problem with open source software.
Tech, life, family, faith: Give me a visit
Nearly $100 million in value in three years of commerical venture.. I'd say Roesch is doing well. There are many opensource projects that have potential for venture capital deals, Snort was just one of the first few in line. Reminds me of the 1999 O`Reilly book "Open Sources: Voices from the Open Source Revolution"
Beat the computer, program your life.
This is timely; I was just thinking about a similar thing this morning. Back in the 1980's and 90's, one could start up a software company which filled a niche, and take it to profitablility and even an IPO, without the usual VC BS. Borland comes to mind, but there are many other examples. All of this was before Software Patents really came along.
I haven't seen anyone doing this lately; at least, not outside of Open Sourced efforts. It seems like if you go the closed source, proprietary route these days, you'd better have a good deal of cash to fight the Patent Wars against the freeloading lawyers who come along. I can think of several examples. Yet no one seems to target the Open Source Companies and try to shut them down. So it seems like this is the only way the little guy can hope to win, without having to bend over for the VCs.
So, my question to the community is this: Are they any modern examples out there where an individual can successfully go it alone these days (all the way to IPO)? And if not (or if these are the exceptions), to what degree is this due to Software Patents?
My suspicion is that there aren't any, or at least many, modern examples these days of people being successful without the money to create one's own patent portfolio and defend themselves, legally. And if this is indeed the case, it's a superb example of how software patents have hurt the industry, rather than helped it.
1) The article could just as easily be titled "Failing to Profit from Open Source Software".
2) What it seems to suggest is that hybrid models combining some open-source goods and a general use of the "open-source culture" with some proprietary products is the way to go, especially for a product where you can't expect to create a lucrative consulting business.
3) I suspect 2) works a lot better when you market to businesses than if you tried to sell to individual users who are allergic to paying for software and have a sense of "You owe it to The Community!" entitlement that corporate users lack.
What I'm listening to now on Pandora...
How can a company that makes a front-end for Snort be worth $100 million!
Anyways, there you have it folks. Free engineering from a large community. Thats what the buisnesspeople want out of open source. And the profit comes from making the interface.
But... is it possible for Interface design profit to sustain code design in the long run? Once open source interfaces catch up, will this niche remain?
That depends on if you're a realist, or a moony pie-in-the-sky idealist. The fact is that having the open stuff wrapped in a proprietary interface is good for everyone. The company is motivated to fix bugs, the software gains more acceptance, and the community is motivated to make a new interface. Everyone wins.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Besides, open source keeps you honest. If developers see shitty coding practices it will out and/or be cleaned up, rather than swept under the rug.
Also good for software enhancement as it's more democratic this way. Pretty much anything I've ever come up with, on my time, I've released with the code. Though I doubt much of it has made it's way to sourceforge. I'd only care if someone slapped their name on it and claimed it as their's, particularly if they were selling the product commercially.
Profiting from Open Source Software 101:
A feeling of having made the same mistake before: Deja Foobar
I must say this stuff is just rediculous. We have been profiting on open source software for almost 5 years. Taking Linux PC's, configuring them for average people (internet, java, music, etc.) and selling it. People completely underestimate the frustration with Windows. I think to succeed in in the business of open source it depends more on a business sense and less on a demand by the market. Seems the people I know who use Linux are so afraid to let a Windows user get lost that they don't push it. Quite the contrary! Linux is coming just like Firefox has. Sell your product and stop worrying about the monopoly you're up against!
Jesse Jarzynka
Cyber Source
http://www.jessejoe.com/
As if none of us would have suspected that there is money in open source software. I don't see how the article is that relevant, seeing as most of us here have heard of Red Hat.
Unfortunately, most of "us" don't know how to read a financial statement, and wouldn't know that Red Hat still isn't very financially stable, and their "profitability" comes from accounting tricks. For me, I was impressed by the article. It seems like they have a somewhat solid footing, which is very very rare for a company producing open source software. Your assumption that there are plenty of other profitable open source companies is wrong.
I don't respond to AC's.
It's not a dream anymore for some, it's a reality. Just like Matt Mullenweg was recently hired by C|Net because of his work on WordPress.
Having done some work with SourceFire's products (I worked on a contract that accounted for a majority of their total deployed IDS boxes in existence at one point), I have mixed feelings about the company. Yeah, meeting Marty is cool, and the pink pig T-shirts are cute, and it's worth some amount of geek points to say that I've used their stuff. But the products they sell and the company itself suffer from the exact same problems that plague all other IT companies.
Even though the under-the-hood technology is k3wl and using Snort sigs is l33t, the admin and management tools are frankly not up to par compared to other offerings out there. I mean, it's not as bad as ManHunt, but it still takes waaay too many mouse clicks and unnecessary repetition by a human to get simple admin tasks done. I've seen gigs of sensor data lost to DB corruption (thankfully nothing critical) and have gone through the whole oh-crap we'll-get-that-critical-bug-fixed-next-release trip with them more than once. Support is a mixed bag, sometimes excellent, sometimes okay, sometimes really slow and annoying.
Bottom line is, companies are companies, there's nothing magical about open-source ones that make their products inherently better or more desirable for any other reason than to boost one's ego and to say that You Were There Back When. If I were recommending an IDS product line to a customer (which I probably wouldn't do anyway), I would encourage them to do some careful research before settling on SF.
"We can categorically state that we have not released man-eating badgers into the area." - Major Mike Shearer, UK
Go watch it and if you're curious, read on. If not...that's good too as I'm only going to ramble a bit;
What I take from it is that the developer should reject the impulse to build everything from scratch and build just the core tool kit for others to use. After all, you can't know what other people are thinking or what they want...even if they tell you.
Along those lines, I look for projects like Plone that build on the work that preceeded it (Python to Zope to Plone) and make it easy to design extentions (Plone Products) that interoperate with the lower levels. I avoid monolythic projects that don't seem to be flexable enough to incorporate other toolkits. This is not pre-made integration, though. Quite the opposite.
Having the lower levels available and modifiable (Python source of Zope and Plone) means that you're not locked into one and only one way of doing things if you need to make changes. The vendor or core developer(s) don't dictate what you do or how you do it. Yet, along the chain each part works well with the levels above and below it.
Additional link; Erik Von Hippel.
A firewall can not protect you from yourself. Turn off what you do not need. Do not use the firewall to do your work.
That's not always a good idea. Just look at the guy who created TOra. For those not in the know, it's one of the most advanced OSS tools for Oracle developers; it runs on Windows and on Linux, it's Qt-based. The big package for windows was always TOAD, by Quest software. So, what did Quest do? Offer Hendrik Johansson a job, claiming that he could move from Sweden to the USA, and be paid to work at TOra. Guess what? When he accepted and had moved, they had him work on TOAD (the windows product) and not his own opensource TOra... That's how you can slow development on OSS software: buy lead developer with pretty lies and then claim all his time.