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Making Money Using Open Source Software?
GamblerZG asks: "As many of us probably know, convincing people to run Free Software can sometimes be a tedious task. However, there are a lot of factors that help us in that regard, and, perhaps, the biggest of them is a simple truth: Free Software is free. It's hard to argue with such statement. I know it, because I faced it today, trying to convince my fellow co-worker that it is possible to profit by writing GNU-licensed code. 'How company can make money, if its products are available for free?' That was a valid question indeed, and I could not find any simple answers to respond with. That makes me wonder, whether there are articles on the Internet, which explain and analyze how Open Source business models work? Do you know any ways to prove that such models can be profitable?" It can be done, you can check out a recent interview with an Open Source Entrepreneur on NewsForge for some hints. What other ideas and business plans do you think would be a good match for a business with an Open Source core?
Have we finally found the Second Step?
I forecast too may underpants gnome jokes!
See www.redhat.com, see www.sendmail.com, and so on and so forth. These people sell opensource product support, and make money doing it. This doesn't require paying some "analyst" $50k+ to write you a white paper on how to make money.
If I have been able to see further than others, it is because I bought a pair of binoculars.
they mainly make their money from supporting the software and also, you don't need to write GPL software for linux. As long as you don't use GPL code, you can always sell your program without selling your code.
free doesn't need to be free beer, but free is usually referring to free speech (aka freedom).
I am harvesting funny/good quotes. Please help by putting them in your sigs
'How company can make money, if its products are available for free'
UGHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!
"How company can make money, if its products are available for free?'" 4th grade grammar anybody? :)
One of the many business models is "Support Seller" in which you sell consulting services around an open source product. See Red Hat.
Charge for support, customization, and installation. Show the customer that your value doesn't end when the code goes gold.
- Despite popular opinion, I am not perfect.
I am a big fan of making the source free but charging for support. This gives the user/customer so much more power. They can work on your application all they want, if they get stuck or need help, they call and pay you. You can offer initial setup and configuration. Many large companies charge quite a bit for support contracts. You can as well, with the advantage of having a lower TCO for your customers.
Donations? If you write code that people actually like and use it is possible to make money off donations. Not enough to support say a family and two kids, but enough to perhaps buy you lunch everyonce and a while :P
Make software that is VERY extensible. So much so that the open-sourced "guts" of the software are pretty much a framework for the extenstions.
Then, sell consulting to design, write, install, support, and maintain those extensions.
Couldn't we have summarized this as:
Okay, it's been 2 weeks guys, so we have another programmer who wants to make money programming, but has no idea how to create a solid business model, so let's all put in some work and tell this guy how to make money with FOSS instead of those of us who have figured it out running our own businesses.
Just take a quick look at IBM announce today they're making 38.8 million off Open-Source-based services on a single location in the span of four years.
If that is not money, I dare not fathom what is.
HAD
Its easy to make money off of Open Source! Slashdot just posted a story on it!
You can mod your friends, you can mod your nose, but you can't mod your friend's nose.
It's very easy to make money with OSS but people always complain later ! So much for pretending being "open"...
Check out this other article about making money and open source that was on indicthreads.
Cathedral and the Bazzar.
Open source software is the best for making money because the image editors and print drivers don't have currency detection obstacles.
just kidding for all you secret service agents out there
Contrary to many people's beliefs, the GPL does not forbid someone charge money for a product, it only specifys that the source remain free (libre).
Game! - Where the stick is mightier than the sword!
If you use this product commercially, and feel its been of monetary value to you. Please donate a fraction of the value of the software. The value of this software is different for each person and company, please be fair. Thank you.
God spoke to me.
As everyone seems to be suggesting, free doesn't have to mean you donate a lot of time and effort into supporting a product when you could legitimately charge for your time and give away the product. Often i think it more important to find a niche and fill it well than to expect instant returns on your work. Licencing your code under a slightly less restrictive licence, something like the BSD licence, will also aid in adoption by those who don't want to be so limited by it's terms of use.
I think the figure is about 80% or so, but most software is not written for mass distribution. It's used only internally. Even Microsoft probably has a lot of software that isn't distributed and never will be.
This software can cost less to develop if open source, because the chances are someone has already written part of it.
This book addresses that issue, to some degree anyway. One of the things I recall (it's been a while since I read it) is about support. Let's say you develop some Open Source software that becomes popular. As I recall, Eric Raymond argues that you can essentially make money from support related to that software. For example, assume you had developed Apache. You could advertise that no one else is as capable as you at implementing somethng which uses Apache, since you (presumably) know it better than anyone else.
A modern day witchhunt.
If you sell the code along with your product then your project is still open source and you make money.
Open doesn't always mean free.
Technology, the cause of and solution to all of life's problems.
One thing threatening Open Source today--piracy.
As we have already seen today, the GPL is under attack from evil forces known as "pirates." These shadowy folk silently steal source code and violate the GPL, infringing on the rights of GPL authors. They are nothing more than thieves getting a free ride off the work of others, and I for one am disgusted at the idea of it. As you can see in the previous article, clearly Slashdot is also sickened by the idea of copyright infringement and piracy.
Some have even called for a lawsuit against these pirate thieves. Suing individual infringers has always been a position that Slashdot and its readership has supported, so it's only fair that the original GPL authors protect their rights and safeguard their material from being stolen in the future. I think we should all support any lawsuits against these infringers to protect the rights of GPL authors everywhere.
I appluad Slashdot and its readers for always taking a proactive stance against piracy and copyright infringement in general, and I would like to join the cause against this "source code theft." Piracy is a major threat facing OSS today.
In the world of educational CMSes, Moodle is pretty much king of the roost. Not only has Martin Dougiamas helped build and direct a quality system that has a presence in over 100 countries (nearly 3000 registered sites), but he is successfully parlaying his expertise in service and support, providing the opportunity for others to become support "partners."
I have never been one to believe that's it's criminal to make a living off F/OSS. I think you can have it both ways, and Martin does a great job at proving this to be the case.
Ugh, Underpants. Profit...kill me.
This is easy: Charge for the things you do. Making software isn't easy--it takes time and effort--so you should be paid to make software. Supporting software isn't easy, either, and so you should also be paid to do it. (Making copies of software is easy, so it's not fair for you to be paid to do it.) Neither of these sources of income are incompatible with free software. It's simply a matter of compensating people more directly for the services they provide.
An ISP using Linux/FreeBSD/OpenBSD for almost everything.
This is my sig. There are thousands more, but this one is mine.
'How company can make money, if its products are available for free?'
In Soviet Russia it's a valid question, my friend, but not in English.
Invoicing, Time Tracking, Reporting
Look at Linksys and TiVo. Well Linksys anyway makes good money off of Linux products.
It really depends on the market. Odds are pretty good that you will not make money on a spreadsheet, database, or game You may make good money on a vertical or embedded system. How many people make good money using GCC?
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Open Source is only free if your time is free.
There's alot of truth in that statement. It also means you can make money by setting up opensource systems for other people (and perhaps you'll have to add a feature or provide support to make the sell)
You could also get paid for simply adding a feature. You could only sell this feature once, which is a big difference with the proprietary model. You can respond to this by simply asking more money off course.
Overall, it's true that Open Source forces you to be more service-oriented as opposed to being product-centered.
Successful companies do not produce "products" so much as we produce "customer satisfaction". Products are necessary props in producing satisfaction, but they're not the only necessary props. Software is used to produce that satisfaction. The programmer's dream is to work only with our computer, producing that "killer app", and publishing it for the hungry masses to consumer. The reality is that customers must be sold tom if they are to pay, and that software is part of the sales process. So keeping the source closed is really sleight-of-hand, a way to protect inferior code from competition. Binary-only software is no less piratable than source code, especially with so many architectural layers that can be replaced with rebranded wrappers. Profit measures the surplus value in the *relationship* between vendor and purchaser. So open source is no different from closed source software in its role in making money. If anything, open source is advantaged in improving the relationship, and in offering more opportunities for satisfaction, as well as reducing the costs of delivering that satisfaction - hence more profit.
--
make install -not war
This is an industry where you can make money off OSS. Not just supporting OSS, but if you can develop a package of useful OSS apps and offer the to businesses too busy (or focused elsewhere) to implement & maintain themseleves, you can make a tidy living.
For example, if you developed an easy-to-use & maintain (think GUI for the receptionist) Asterisk PBX, you could probably sell that into a lot of small businesses. Sell some maintenance on top of it and after a while you have a nice recurring revenue stream.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
It isn't open source, but its free...and they are making beaucoup bucks giving it away!
I'm sorry, but if you need to pay someone to install/maintain/use the software, it is NOT free.
You can use "cheaper" or "cost-efficient", or whatever other synonym for "it doesn't cost much" that you want, but "free" borders on deceptive.
"Ask not what your country can do for you." --John F. Kennedy
I'm a CS major, but a professor in the Business college here wanted my help designing syllabi for an advanced website development course.
I recommended we endorse the AMP (Apache/MySQL/PHP) platform over ASP.NET (which is what he had in mind), and his main reason for not taking that route was that "Apache is open source, and you can't make money with free products. Here in the business college, we're only interested in products that can make money."
I promptly never spoke to the dumbfuck ever again.
OMG! Wau!
-- Thou hast strayed far from the path of the Avatar.
I remain unconvinced that that a software company making its crown jewels Free Software is a good idea.
On the other hand the huge preponderance of software out there falls into the "necessary evil" category. I don't see any reason not to make that Free, and every financial incentive to distribute the burden of writing and maintaining it.
-Peter
Apple has been using Open Source and making money from it for a few years now. Their model is to have open source and freely available core components (Darwin, Webkit, etc) then build value on top of it and charge for that.
I think we'll start to see this model adopted more and more.
A client who doesn't have a group of developers would be less inclined to be wowed by the wonders of Open Source when one of the main selling points is that "you can extend it." In this case, I suppose that you could extend the base application for them for a fee, and provide support on that.
That aside, I imagine that selling this idea to a larger corporation would be a hard sell--those types, if I'm gauging the vibe correctly, prefer to work with "established companies" because they feel "safer." Given this case, how would one convince a larger corporation that FOSS is as safe, if not safer, than the stuff peddled by "established companies"?
Vladimir Putin, is that you?
Some companies need software, but don't make money by selling or supporting software. A company might need some tools that don't exist. If those tools are useful to other companies, and don't necessarily provide a competitive advantage, Open Sourcing it might be wise. For instance, if as a part of my business, I have to, for some reason, rip and tag a lot of CDs through a Web App, I will need some kind of plugin or applet that will allow my App to ask the user "Please Insert a CD". This might be a project I can offer to the Open Source community in return for the possibility that it will be improved. In fact, a large amount of the initial development might come from the community. My company may then put more focus into it's actual business while providing a useful tool for free.
Not that difficult, really. All you'd really need is The GIMP to modify serial numbers. Plus a good scanner, nice dye-sublimation printer, and the right paper.
Simple answer: it's extremely dificult to do so.
The question you should be asking is 'How can a company make money, if it gives away software for free?', and the answer should be more obvious - it can do so if its product is not the software it's giving away.
For instance, IBM's "product" is the tailor-made services and consultancy it provides. The software is merely a tool they use to provide it.
You might argue that keeping such tools to yourself is a commercial advantage over your competitors. That's true to an extent, but there are also downsides - e.g. if you provide your own proprietary operating system instead, you don't get benefits contributed by the community, and your competitors are more attractive because there is no lock-in.
You get what you pay for? Gosh. That wasn't so hard. :-)
Recent examples include things like displaytag library, Hibernate and HTML Area.
Of course, this means I must take a wide berth around GPL'd code, but there is enough stuff under BSD/Apache/whatever to get the job done.
Yeah, right.
open source doesn't always mean free. it happens that way alot, because the majority of the open source community provides its products for little or no cost in order spread its ideals. Look at redhat, or open office. these are open source programs that have a cost. Support and well written manuals create extra value for the consumer. The traditional model that closed source software uses is based on intellectual property. since open source doesn't really have that issue, you have to provide servies in addition to the product to create revenue.
forty-two
writing GNU-licensed code
GNU isn't a license, the GPL is.Enjoy an e-piphany
If your project lends itself to this method, you can distribute the source code for your software but charge for the media, like some games do... you're welcome to download the code and compile it, but you don't get all the maps, images, audio, etc.
A more evil solution might be to GPL your program but distribute the code in such a way that it's difficult to compile, or needs proprietary tools, etc., thus discouraging homegrown solutions. Don't do this though.
perl -e 'foreach(values %SIG){$_="IGNORE";}while(){}'
The traditional approach is to sell a service instead of a product. Typically, the service is packaging or integration. This is what Redhat does. Customization work is also an option. JBoss tried to go this route.
Another approach is to code a proprietary app that runs on Linux and sell the whole thing as a turn key network appliance. This is what Sun tried to do with their Cobolt server appliance.
Another approach is to give away the "basic" version of the program and sell the "advanced" version. This third model happens a lot in the closed source world but there are examples of it in the open source world too. The Exchange connector for Evolution used to cost money. Borland and Sun are two companies that take this approach (e.g. JBuilder, Together, StarOffice).
ONE TRILLION DOLLARS!
http://www.sakaiproject.org/support.html
In brief, the Sakai project was started by a few large institutions who were tired of buying into the licensing fees of other learning management system products like WebCT and Blackboard. They decided to create their own and make it open source - both free as in beer and speech. However, the support for Sakai comes at a price, albeit a much lower price than the aforementioned commercial products were offering.
In the end, you recieve a completely open learning managment system created and maintained by developers at these institutions and supported by commercial interests.
From The Longtail Blog
"What's changed is the presumption that the primary rights-holder is the best at extracting the commercial potential of creative material. Instead, anyone can do it: the advertising company that remixes an old movie to sell a car; the Linux t-shirt done Warhol-style, or just plain old DJ magic. "
"Let them eat cake" Well now that cake is actually free and we all want to sell it. Now if you can put a custom birthday signature on that cake you might have a business. This is one of the reasons film school is starting to see a new wave of interest. Communication and creativity, not business processes, are going to be the only things left after the so called Web2.0 is done modernizing commerce.
What if Digg added local news and a Slashdot inspired comment karma system? ---
http://houndwire.com
I think the submitter may need to think-out his beliefs a little better.
Let's see...you were arguing for something. Then, after the most obvious challenge to your belief, you came up blank.
So you go and ask a bunch of people how you can be right??
make hardware.
...
software is on the same path as music, kiddies. soon, the only way to make money on software is going to be the shipping of atoms, not just electrons
; -- the corruption of government starts with its secrets. a truly free people keep no secrets. --
It seems to me that a lot of people are getting confused about the nature of free software. As I've always understood it, free software refers to it's open nature and the ability of anyone to get in there and use and modify it as they see fit and not the price that is paid for it...
I'll sig you upside the head!
1. Take open source software
2. Add trademarks
3. Sell binary
4. Profit
I work at a Civil Engineering firm. We do Civil engineering projects of various sizes. To do all our drafting, we use AutoCAD. We currently run AutoCAD 2005, which runs like $2-3000 a copy.
I work in a small company, so we don't do any real training for new versions. For example, we were using version 2000 of AutoCAD until about November of last year. We we upgraded, the new changes in software were left up to us (mostly me) to discover and incorporate into making the job easier. Now this wasn't so hard, since I know AutoCAD farily well, or at least for the stuff that we do here.
However AutoDesk, the makers of AutoCAD also have other software like Land Desktop, Civil Design, and Civil 3D that might make doing some of the stuff I do now easier and quicker. But those packages too, cost a lot (perhaps more, they don't readily post prices of these programs on their website). And when you need like 6 copies, including some for people that might be doing only a small amount of editing it adds up.
PLUS, if we got these new software packages, the drafting people, including myself, would need to learn how to use them. Unfortanatley, this is not as easy as it would seem, as these tools are quite complex. But guess what? AutoDesk, and their resellers, offer training! Well let's see... we've spent $20000 on new software, and we have to spend another several thousand on training (due to training costs, transportation and lodging at the training site since it is not near by, and then there are the 2-3 days of productive work lost)
So in the case of our small company, the more powerful fancier software gets neglected. The software costs, and training costs are too much. However, imagine if the software was cheaper (or free) Well then I could easily see my boss paying for training, to use the software.
Well this was long winded, but basically my whole point was in the subject. Charge for the services, not the product.
As an additonal example, we produce drawings that look a particular way, the standard that we have set. Now these more powerful tools have built in default standards, and they can be somewhat more difficult to setup for your individiual company. Consulting on how to setup our standards.. something else they could charge for and we might pay for.
[I'm sure however, that AutoDesk wont' change their ways, because large companies will continue to fork out the money for their products, and I'll have to slowly try to learn how to use their fancy software with the demo products and the tutorial files which are of limited use)
Martin Fink, general manager for H-P's Linux Systems Divison, has written a book titled "The Business and Economics of Linux and Open Source." ($29.99 U.S., Prentice Hall ISBN 0-13-047677-3) The prose doesn't exactly sparkle, but it covers all the bases quite well. Fink, interestingly, touched off quite a discussion by using LinuxWorld as a platform to urge FOSS developers to patent their work.
Comment removed based on user account deletion
I worked with a person that wrote open source software for serveral projects including some of his own stuff. He left the company as his business writing open source had grown sufficiently to justify him not needing to work for anyone else.. How did he do that?.. He sold support contracts for people that wanted enterprise level support for open source software projects. It worked well. He charged very little and the support time was low but all the contracts added up.
Got a question about UNIX ask it here : Unix/xBSD Forum
Using Google search terms "make money using open source", I came up with the following:
-101 Ways to Make Money off Open Source
-How to make money with Open Source Software
-Making an open source living
-eWeek:How to Make Money Off Open Source
I am not intending to be snitty in suggesting that you search Google; there were tons of other seemingly-good resources contained within it, and it might just be a case of different search terms. You might be able to team the information gained there with the advice of people here.
Also, if you can gain access to the class papers from the Boston Embedded Systems conference, particularly those from Bill Gatliff in 2003, there were tons of developers there who lectured on this very thing, citing examples and explaining the ins and outs of open-source licensing. I thought Bill Gatliff did an excellent job, and you may be able to contact him through his website for some resources.
*-*-*-*-*-*-*-*
"We are Linux. Resistance is measured in Ohms."
http://steltenpower.com/OS4entrepreneurs.pdf
It's very simple, and the solution is in this phrase:
'How company can make money, if its products are available for free?'
You can't.
Therefore forget about selling products.
Give them away, sell the services.
It's a major change in viewpoint, but it is essential if you want to join the software revolution.
.sig available on 'Need To Know' basis only!
One thing to keep in mind is that many, if not all, Open Source projects are started by individuals within the community. From the start, the focus is not on making a profit, but instead creating a tool that someone else may find useful. With a bit of luck, the tool can become popular and well used. Even in this case, earning a financially sufficient income is extremely rare (not that it isn't impossible).
The 'real' money lies in the various sorts of companies and governments that come to support the OSS movement. Instead of spending money on software, they can hire more software developers who can then in turn, contribute back to the community. Supporters of OSS such as IBM, Plextor, NVidia (although they can't release some code due to IP restrictions), and Sun, all have major branches into hardware. Hardware is the real cash-cow, software just makes it go 'moo'.
This slashdot-related signature is a stub. You can help kihjin by expanding it.
'How company can make money, if its products are available for free?'
Is your co-worker named Oog? If he is, tell him Frylock wants his computer back, ok?
You run a professional moving company, and you need to get a new truck.
So, you go to a truck dealer, and see that he has two trucks that look like they'll fit your requirements nicely. One is free, but has no warranty whatsoever. The other costs $150,000, and comes with a warranty and is supported nationwide by a chain of repair shops.
Which one do you buy?
The MySQL web site has a press release that briefly explains the dual-license business model.
You have to charge for something. Nobody charges you for the ocean, but they might rent you a canoe. They might sell you a car to get there or the gas to fuel the car.
Free software simply shifts the revenue stream from development to hardware and support. If you want extra value attached to the support you provide for free software, it makes sense to keep it free. Just like the canoe rental shop doesn't want to add a charge to visit the ocean (unless they get to keep it).
The answer to the question how OpenSource business models work is that they don't. If you today are making money by selling boxes with your software going OpenSource will sooner or later make you go bankrupt.
The reason why OpenSource works for Redhat and SuSE is because they don't write much OpenSource, the community does, they just pick the whole work of other, package it nicly, write some installer programms, fix some remaining bugs and then sell it. If there wouldn't be a large community to actually write the software they wouldn't have much of a chance, since there wouldn't be much that they could package. Supporting their products is another source for there income, for which their OpenSource activity is of course a great way to advertise it.
So if you expect to write original OpenSource software and expect to get a large return from it, you can basically forget it. If everybody can download your software for free you won't stand much of a chance to sell it. If you however sell a service and not a piece of software there is a good chance that OpenSource won't hurt you, since people will still buy your service. There are also models which work by releasing older versions as OpenSource and selling the current version as close source.
Overall making money by writing OpenSource doesn't work, what works however is using OpenSource as advertisment to services you sell. However selling services doesn't work for all kinds of software, so if your software doesn't require much service around it, you are out of luck. If you want to make money with your software there are probally better ways then OpenSource, you should see OpenSource as a way to ensure the users freedom, not to ensure yourself a larger income.
But I think there's projects that don't earn money like netfilter, or there's a business that call they to configure a firewall? In another way there's OSTG that have big enterprises behind to help the developers, and that one that can't count with it?
http://www.michel.eti.br
(1) Some software that comes with a fixed price, or a fixed recurring licence fee, with support included?
... they ship crap code in the first place and charge you for fixing it later.
(2) Some software that's free, but, uh, you can probably find someone to support it if you pay them, but, uh, they haven't quite sussed out their business model yet, so they don't really know how much to charge, or whether they'll still be in business towards the end of your planned eight year life for this system?
Now, let's see. Fixed price means software quality is as high as they can get it, because fixing problems costs the supplier.
Free software with pay as you go maintenance makes more money for the supplier if
Hmm. Tricky purchasing decision that!
First, go read "In the Beginning was the Command Line". It's got some great insights about the software business.
Now, about making money.
1. Do like the Sveasoft guy: package some open source stuff together into a value-add. He ges paid for doing the integration work.
2. Offer services around open source. Get pai for helping people install and run their software.
668: Neighbour of the Beast
If i have a project that has multiple source files, and is organized into modules, and one of my modules uses an open source project, do i need to release all of my code with the program that I am planing on selling? Or do I just need to release the file that has the code used from the open source project? My project has over 600,000 lines in about 34 files, i am wondering if I need to release them all or just one, or how this situation would work.
thanks.
I think that's difficult to make money
from OSS, I think a better question is "how can I make money with OSS".
In other words, if your goal is to make money, then perhaps the best question to make is, how can you use OSS as a way to supplement your business model.
Think of how OSS can be used to make a business operate more efficiently and at a lower cost.
If your main business isn't IT related, then just appy this to your own business.
If your job is IT, then think about how you can appy this to your clients. How can you use OSS as a base to help your clients in thier business. This could mean selling support, or writing custom applications based on open source code.
Famous Last Words: "hmm...wikipedia says it's edible"
There are other businesses where some parts of the theory behind OSS make them money.
I pay plenty of bar tenders to make me "Open-source" drinks that I know damn well how to make on my own because I'm just no good at it or I don't want to take the time to go to the store or I'm too tired to make it etc. etc..
People pay for hamburgers at restaurants all the time, even though even little kids know what goes in them, because they don't want to go to the store and buy all the stuff and they don't have the tools to prepare it or the skill to do it well. They just want to eat. It's a matter of convenience and skill and action.
You just have to choose the right market. When a bar tender is behind the bar she doesn't pay another bar tender to make her a drink that they both know how to make, but after her shift is over and she's dead tired, relaxing on the other side of the bar she will. Likewise, you probably won't be able to sell your OSS products to people who make their own OSS products. You sell them to people who need solutions to problems that you can provide using tried and true OSS code. To sound really cliche, if you're selling OSS stuff you're a "solutions provider" and your solution just happens to involve free software, but businesses will still pay you to solve their problems because you are doing work, your tools are just free.
This has been bothering me for a while. I found out about "the movement"(tm) a year ago and love F/OSS. I am in college right now, and me and some friends are beginning to work on our first video game. I want to release the game online and sell it with the shareware business model that made Doom so popular. The problem is... that we want to make it open source, and give our customers the freedoms they deserve with it, but we also want to get paid for our work. You can't exactly make money off doing tech support for video games (excluding MMORPGs). The current solution is to release all of our game engines under the GPL and release the actual meat of the game, it's graphics, sounds, levels, under a proprietary licence. Our end users will get the full source, and patch submissions will be welcome of course. I'm no lawyer, but I wish there was a license that would allow your users to have the maximum amount of freedoms yet restrict it's distribution... Anything over at Creative Commons or the FSF I might have missed?
"A truly wise man realizes he knows nothing."
The motivation of open software isn't profit, that's not to say it isnt possible to make good money packaging and supporting open source - let alone deploying it (google, amazon). Open source development simply is the name of how development was done at universities and large research institutions since the 50s and 60s.
The idea to profit purely from software and not from service, hardware or application is relatively novel and pretty much started with the introduction of the home computer around which time AT&T started to think they could actually sell UNIX.
Of those to whom much is given, much is required.
Only if Yoda were the one asking the question.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
I find it kind of odd that people who are thinking about trying Open Source care whether the vendor is making money. If you could buy a car below dealer cost, would you ask questions, or just buy the car? As long as you can get support for the product, it doesn't matter whether the vendor is making money or not. I don't know if it's just out of curiosity that they ask the question, or if they're trying to make sure that they're not buying into a dead-end product. But we should really be asking why Microsoft and other proprietary vendors are making so much money. Especially when the cost of producing 1 additional copy of the software is virtually zero.
Software sucks. Open Source sucks less.
All other operating systems would require binary version to be purchased, and it would be against the license to compile the software for those operating systems. Yeah it's not totally open, and sets conditions, but in some ways I think not only could it help fund the developers, it could help create the "Killer App" that open source software needs. I love OpenOffice, Mozilla, and Thunderbird. I use all 3 on Windows, OS X and Linux, but because of that there's no incentive for me to use them on Linux exclusively.
Introducing Microsoft Vacuum 1.0 The first Microsoft product that doesn't suck.
Ohwait...
IBM, among others like Google, Apple, etc., are showing us some great open source business models, and as far as I can see, these models almost always involve some way to package open source software as a comprehensive service or solution. It's not enough to just burn the software to disk and stuff it in a cardboard box (or at least, not anymore).
Is this not why guilds were formed, to prevent desperate starving workers from undercutting each other ?
If the developers had a union, and you had to charge for software, what would happen ?
The history of public tv/radio suggests that free software is not going to survive (ducks) - after all, NPR gave up (or failed) to support itself from listeners (ducks again)(the super odious macneill leherer snooze hours use of att was a big step here) (ducks again)
(I do not think that firefox or open office, to take two well known examples, are really "open source" as both derive a large amount of code from closed sources, going back to netscape and sun)
Seriously, How about well designed web pages, written by someone with a good grasp of english grammer, well laid out according to a std plan (no white text/black background, no stupid cutsey blinking lights, etc)
How about patented common gui; people really hate learning new guis, so if there was a std model, I mean a real std model, that was patented, and you enforced money for software with it..
ad supported software ? surely, there has to be a better solution to doc exchange then acrobat
There are two ways to make money. You can sell goods or sell services. The problem is that people have treated software as a good. But this way of thinking is old and broken. The idea of free software is that software is a service.
In a world where all software is free I still see room for coders. It works like so. If there is a piece of software, say a driver, that is desired by a great many people. Then those people will work together to create it for the greater good. However, there are certain pieces of software which either are only in demand from a small number of people, only possible to be created by a small number of people and in demand only by people without software creating skills.
These three groups will pay software companies for the service of creating the software that they need, but would otherwise go unwritten. If you make a new USB peripheral or such you still need someone to write a driver. And it isn't going to happen magically. You need to hire some coders to write it so you can put it on your site for download and include it on disc in the retail box. This is how free software can make moneys.
The GeekNights podcast is going strong. Listen!
Volume, Volume, Volume!!!
Who need money when you can have some gifts like a Mac for free by programming OSS??? (see, if Linus can have it, you can, too!)
What if the developer's speciality is coding, not it-support? Of course, the developer could team with someone good at support, but it still leaves the coder in a weak position.
I see the point, but doesn't the free truck include access to a horde of people (many with good service track records) who are willing to work on the free truck for a (nominal) support contract?
To follow the analogy further, doesn't the $150k truck also require you to extend the warranty for x dollars per year?
This question has come up a lot of times, and it's getting old. There are a slew of very viable open-source models. Examples of business models and companies:
(1) Give away product; sell support (Redhat, etc)
(2) Give away product; sell specialized tools or enhancements (Zend)
(3) Give away OSS product, sell service using it (Livejournal)
(4) Give away product, sell customization and integration consulting (you name the product, this is probably going on; BitTorrent is a great example)
(5) Give away product; put ads in default distribution
And this list is far from complete.
A lot of these models are FAR from unique to open source. Think of the lack of up front licensing fees as a marketing expenditure. The last big company I was at spent *millions* of dollars on consulting to try to customize and integrate a piece of CRM software - and it had a large license fee as well. I doubt the license was near as much as all the aftercosts, though.
Personally, I've been working for years now under (4); I distributed an ecommerce package for a while. I had to close that down as a project due to lack of time to maintain/respond to issues, because I've been swamped with other work as a result of having it out there. OSS can work commercially if you WANT it to. It may take some creativity and some work, but I bet most products that are quality software and are useful and used can be monetized in some way, if not MANY ways.
I left 10 years of developing on Windows for the financial industry and switched to a web development company that relies completely on open source. While we're developing custom solutions for clients we can contribute back to the projects on which we rely. For example, while I'm using a new feature of PHP I'm figuring out enhancements and bug fixes which I can contribute back to the project. We also have some generic software we've built to help multiple clients. When it's polished we can later publish it as open source.
Developers: We can use your help.
Yes, with F/OSS you can make a profit (e.g. Red Hat). But if one gets their head out of the "please the stockholders"-space, then hopefully you can appreciate the concept of "earning a comfortable living".
Small firms of talented individuals could easily make enough money to live comfortably and using F/OSS software would help them be much more competitive and MUCH more flexible than outfits that insist on using software with built-in "profit margins".
The main model behind these kinds of companies is to build custom solutions. This is where the majority of software is anyways (not shrinkwrap wares), so there is lots of opportunity. The fact that you don't necessarily end up with a generalized product likely doesn't matter if you aren't out to make a bunch of VCs millions upon their millions.
Here's all the example you need.
You might have to tread on a fews toes, but it's all in the name of furthering OSS.
And I've convinced some of my clients that the code I write for them for hire belongs in the CPAN, and that the magazine articles I write for them for hire belongs on the web for free.
It's all a matter of what you negotiate, and finding out what's needed and wanted and doing it. You don't need to charge for the software itself if you can figure out what else they'll need to make the best use of the software.
Would the people giving (in my opinion, somewhat hypothetical) advice be willing to tell us how much they are earning from open source development or support? Thought not.
In this article you'll find a pretty good answer to your question : seven economic models are detailed here, either based on selling services, advantages (think "club premium" or mandrakesque things like this), or novelty (one recent version of the software isn't for free-as-a-beer, but the older one is free-as-in-speech), etc..
have a good read!
Do plumbers make money? Do electricians? How about building contractors of any kind?
Sure they do. Yet, their materials, specifications and "code" are completely open source.
It's not glamorous, it's not chic, but supplying the service of building what works to meet the customers needs works fine as a business model regardless of the product we're talking about.
Bob-
The Ludwig von Mises Institute. The reasoning individuals economics
Breasts! Oh, sorry, this isn't the poll...
One of the most misunderstood parts of Open Licensing is the idea of "free" (as in beer) versus "free" (as in open licensing to customers) versus "free" (as in, anyone can see it.)
It is not necessarily true that an Open source product is free of charge.
It is not necessarily true that an Open source product must be shared with anyone and everyone.
In fact, open sourcing does not necessarily mean that you have to make the source open to everyone, and may only be shared with paying customers, despite that being against what one would naturally think.
Many open source licenses maintain the open source nature to customers only. Depending on the license, you don't necessarily have to send the source to anyone and everyone, nor do you have to post it on a website. When a person becomes a customer, they can then gain the right to your source for their own development needs (as per your license), with whatever additional licensing wrapping you want to provide (be it that they cannot openly distribute code to anyone but their customers, or that they can only openly distribute their code, yours omitted, to their customers, or that they have to give you a % of earning for money made using part of your code) being up to you.
What aspirations you have for your software will determine which open source license you use (or create.) A lot of what you will read is (with good intentions) incorrect because so many people assume that open source means both or either free (as in beer) and free (to everyone.) Many licenses take advantage of the fact that until you become a customer, they are not bound through licensing to you (and likewise, outside of applicable laws and copyright issues, you are not bound to their licenses either. Makes sense.) Using the software consents to licensing, which may require paying for that service. That is one way to both open source (making the customers happy and making your product extensible) and make money.
To me, that's a great business model. Customers pay you for your hard work and they get to see the code so that they can tailor their own applications to it. It makes your product more extensible and marketable, offers your customer more options, and has the benefit of being profitable as well. You can then also sell support for your products and make money off of that as well.
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"We are Linux. Resistance is measured in Ohms."
I attended a chat last night with someone who works for a very large medical device company. They talked about how important intellectual property was to them and that it is their life blood. So they patent as much as possible and lock up everything as tight they can to get a competetive advantage on the competition.
/. crowd and the fsf folks have to say as this is a lot of what I hear coming out of this company and even other tech companies. So its a huge obsticle to overcome for the open source/fs movement.
However, he also stressed "living the mission" where there mission is to essentially alievate pain, help people live longer better lives." And in his next breath he said that his company would sue anyone who copies their ideas to do remote patient check ups on pacemakers etc.
So I asked, doesn't this contradict the mission, how can you on one hand be for helping people but writing proprietary software that maximizes your revenue? Why don't you open source it all, wouldn't that be a better fulfillment of the mission? He responded by saying that it is essential that the company do this to ensure that it can be financially healthy to continue to provide these services and develop new ones.
It seemed pretty logical to me, but I want to hear what the
When your collegue asks "how can company make money writing free software?"
Ask him back, "how can company make money writing software?".
Then look at companies that are making money writing software. Like say, Oracle. They make a lot of money above and beyond charging people for an installation CD.
Or like say, Redhat. They too, make a lot of money above and beyond *not* charging people for an installation CD.
This is common business sense, which is lost today in our world of "intellectual property theft" and hungry lawyers on every corner:
Charge for things based on their COST TO YOU + FAIR PROFIT.
With my clients, I make an offer: I'll write that code, set up that site, whatever it takes, for $X per hour. However if you let me send the patches to the author or create an open source project out of the *non-business-logic-parts* of the code, I'll charge you $X/2 per hour. (I also do "work for hire" for 2*$X).
Why $X/2? Because it's a lot less work to just get your changes in the next download of the package, rather than having to merge them over and over again. So it costs less for everybody.
When you focus on the *distribution* of software using the old "software as a product" model, and you ask how to make money with open source, you're asking the wrong question, because open source eliminates these pointless distribution costs to begin with!
OSS isn't a bad initiative. Bundling your source code with the product you sell is a win/win situtation for both you and the customer. Giving away your product, just takes you out the equation and the money trail. It allows other people to profit off your work with no guarantees of payment. Execs at redhat make a fortune off the labors of other people.
Have you ever been to a turkish prison?
IMNSHO, it wouldn't be easy in the least to make money using FOSS. Sure, you can look at IBM's Global Services Division and use them as your role model, but how did they get to their position of dominance? They did so by having the money already in the bank to be able to attract the top talent to come to them so that they can strengthen their consulting capabilities.
Small-sized businesses will not find it so easily done, however. Competition from larger companies, especially due to their ability to offer services at a lower rate because of economies of scale, will either drive the smaller companies' profit margins to nothing or drive them out of business completely.
I am not against FOSS by any means, but I wouldn't be one to attempt to start a company based on the services-oriented business model.
Then again, depending on your definition of "successful," I could be all wet.
RPM was garbage 5 years ago too. ;)
I'm new to this whole thing, but once my company pays for my Windows XP, it's free to use forever after that, right?
Plus, I get free updates from their Interweb site.
Yeah, I know there isn't a lot of money out there in web development. But if you can evolve a web development company to be a CMS integration vendor, there's a demand. Using PLONE, Postnuke, or a few other open sourced CMS packages, a good salesman can sell CMS services to area businesses.
CMS offerings are what can seperate your company in a pitch meeting from the competition if you can offer a proposal that includes empowering the customer to update the content themselves without editing files by hand.
$5 / month hosted VPS on linux = awesome!
I use vBulletin forum software for many of my sites. No, it's not free, but close to it at $160. Many developers make hacks for it and it's great software. I also install Mambo CMS for web site clients. It's free, but I bundle it with training and a years worth of support and make a profit. I would easily pay for it as well, even though it is open source. I have also purchased a variety of open-source applications for various web projects. Quite frankly, I don't mind paying so long as I get the source code because I then know I can modify it to be exactly how I want it - if desired.
Here are my comments on this topic, FWIW.
// TODO: Insert Cool Sig
Shoot, HP GAVE AWAY one of the most widely installed database programs (called IMAGE) for years.
My point is, people have made a lot of money off of associated products (such as hardware, in these cases) by giving away the software. In those days, software costs were miniscule relative to the hardware costs. Today (some) software is free, hardware is cheap, and services cost money. Give away the first two, and charge a lot for the third. End of thread.
I, like most programmers, am paid for the time I spend developing the code, not for the code itself. The code is free, my time isn't. And if you don't pay for time, the code will not be developed.
This work fine when there is a limited number of users, which is the case for far the most software.
It actually also works for some software with more users. GCC developemnt is largely funded by people who hire one of the GCC development companies (there are several) to improve some aspact of GCC that is important to that customer.
A hint, you won't make the money by giving it away. The free software will be a marketing ploy to gain publicity. You need to sell a product or service that the OSS is somehow tied to.
For example, Red Hat has Fedora as a free Linux OS. If someone wants tech support for Fedroa, they can pay Red Hat for it. If they want a more advanced server version, they can pay for it.
Some projects are based on OSS, but sold commercially, like Linspire, WineX, Crossover Office, etc. The OSS license can be released into a commercial license, in that the OSS developers make their money in selling licenses to release their OSS code into commercial products.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
I often wonder how many proponents of Open Source software ARE actually small business owners, or indeed programmers or programming consultants who are actually in the industry right now, and NOT just some bored college kid who really doesn't have to do real work to eat for a living. I have real bills to pay, and a business to keep running, and competitors. It's all well and good to talk about the idyllic benefits of free software, share it all, publish my code, but for a small company, the service model isn't really an option, if you want to stay viable.
Your guide in a nutshell:
1) Consulting: with the tools and software to use for a conversion as well as hardware.
2) Support: the applications
3 Customization: of Software
4) Installation and Maintance: of software
5) Profit
Repeat after me: open-source software is not a business model, it is a softare development model.
The blunt fact is that in IT, there are really 2 classes of people: users, and developers. This is fully analogous to any other industry, where you have a consumer (users) and a producer (developers).
The users -- everybody from sysadmins and netadmins, on down to the secretary using her Office apps -- do not write code. They do not contribute anything beyond bug reports to OSS. Hence, their personal stake in the price of software is simply to get the cheapest software that will do the job. Given that OSS is free as in beer, users will naturally gravitate towards it and promote it. Just as in college, where there is free beer, there are students lined up around the block to get a drink.
Then there are developers -- the software engineers and programmers. They *do* write code; that is their job. They contribute more than bug reports to OSS; they contribute the very code that is required to build the apps that the users use. The trouble for developers is that OSS, by not charging a fee for the time spent developing, makes the value of developers' time equal $0. Time = money, and if money = $, then time = $0 as well.
When applied as a business model, that is how OSS works; there is no escaping this fundamental economic analysis. You cannot very long sell a product at a non-zero monetary sum that which one can get at zero monetary cost to themselves.
Thus, the only way OSS can survive in the business environment is if the developers are working for a company which has some other revenue stream then -- be it support services for the code they write if they are a software company, be it some other service if it is a non-software service business (e.g. a marketing firm, law firm, etc.), or be it some tangible, physical good (e.g. in any hardware company, car manufacturer, grocer, etc.).
It's an opportunity for creativity in business models to try and incorporate OSS into their business functionality, but from the developer's perspective, it's important to recognize this fact: because you are writing software which is being given away for free, your work is not directly making money for the company. Because your work is not directly making money for the company, you will be seen as "dead weight" in the company. Because you are seen as dead weight, you will have a hard time justifying your employment with management unless you can determine, clearly, how your work saved time somebody else in the company, or how your work drew in more customers for the company, or how your work generated more service contracts, and so forth. If you cannot do that -- and this will be difficult (though not impossible), given that you don't work in those departments -- you face job loss.
Hence, it is generally in the best interest of developers not to write OSS. OSS coders are literally coding their way out of their own jobs.
But all of the above largely assumes software is normally otherwise a product sold to people on store shelves, when in fact, most people already write code for internal use only anyway. What about those people?
OSS is still a negative to developers in most companies, because, after all, if you are writing code that would normally be for use within your company, that is potentially a competitive advantage for your company. But if you're giving away that code, you're giving away that advantage for other companies - other competitors - to use. This is good neither for the developer, nor the company paying the developer who released the code as OSS. After all, if you employ developers who just spent 6 months writing control software for, say, a large manufacturing company, why should the company release that software to the public? So that their competitors can go out and buy the same hardware, leverage this software they did not develop (and have no intention of contributing back to), and produce the same or very simi
Is Capitalism Good for the Poor?
If you're selling hardware, open-source drivers, OS, etc is a no-brainer.
e.g. Linksys
bottled water - (ie. pretty packaging or assurances that your version is best)
This is what most Linux distributions that retail do. It requires branding, good pricing, and quality/features(good reviews by non tech community).
razorblades - (we give you part of the solution - software, but you WILL need 'something' from us - customization/documentation/training)
JBoss and most high level business apps do this, but it tends to be like a form of FOSS crippleware.
Services/support can be placed here for some FOSS companies, but it tends to be the model below instead.
freedom/guilt/vendor lock-in - (Donation FOSS ware, some of the bigger support contract Linuxes, and actually most non FOSS commercial software companies)
Making customers feel it necessary to pay a specified or unspecified price for continued 'something'(new features, security fixes, support, etc.) that will hopefully be assured by the software maker still being around next year. These pay outs do not have to be specific to actual software buying as many commercial software makers charge per user or by subscription(Microsoft, Sun, most real CADs, etc.). Non-FOSS makers just have more ways to force customers to pay upfront for licenses and agree to harsher licenses.
appliance - (done by many small companies)
It is a risky game as you need branding like Cobalt (somehow) had more than specific pricing or quality.
The problem with FOSS as a business model is that anyone can become your competitor selling your own software. This is more of a PR based issue assuming the company has a solid grasp on one and only one of the above models.
For quality based value adding you obviously can't rest on your laurels like proprietary software - you have to work on the software. You have to convince your customers you are working on it (and benefitting them). For service and support, you have to remain the supreme expert on the software (then you can charge more than your competitor for the same work). Since the software is open source, the above have to be backed up with some honest work. For branding, you need to understand the market you want and invest in getting your name in people's minds(same as any market). The amount of effort to make a FOSS product can be minimal, many companies out there are working hard to actually just rebrand other distributions. But at the same time, slight variations evolve to meet customers needs(most commercial Linux distributions started out as Debian or Redhat),
The Apache guys were people administrating web sites for various reasons associated with their jobs. They could have used the CERN HTTPd, or they could have used NCSA HTTPd and been happy with what they got.
It turns out that cooperating on improving NCSA HTTPd, into what became Apache, was a better way of running their web sites than the alternatives:
- Muddle through with an existing HTTPd
- Hack an existing HTTPd without sharing the source
- Buy a commercial HTTPd
Running a website was the aim. Apache just fell out of that activity.Another example might be TiVo: they sell boxes. It is cheaper for them to customise a free OS for those boxes, and participate in the community, than the alternatives -- write their own OS from scratch, or buy commercial licenses. TiVo isn't a great example because I don't see any Free software that's come from TiVo that's particularly useful to the community at large.
So the answer is: follow a business model which is not related to selling software, yet produces Free Software as a side effect.
someone PLEASE mod this up!
it's only the most intelligent thing i've read on slashdot all week...
Sorry for the dumb question, but can someone please explain to me what you can or can't do under the GPL ?
I know that if you modify open source software you HAVE to redistribute it to the open source community. But what if your product were to say interact with an open-source DB ? (All of you IP is in that other module that interacts with the DB). Can you still sell your product w/ the open-source DB packaged in ??
And what about hardware manufacturers, that rely on open-source bootloaders or the linux kernel ? What obligations do they have towards the open-source community and how does that affect their ability to sell their product ?
A million monkeys and this is the best sig they could come up with...
I'm not sure there's that much difference. My parents had to hire Geek Squad to keep their OS and internet connection running right, and that's a Windows machine.
MSFT didn't offer mom and dad any viable support option, but they had to pay for the operating system anyway. So if you're going to pay someone for support, what difference does it make to anything but your bank account whether you're paying to support proprietary software or OSS? Hardly anyone is giving away service and support anymore, so remind me again what the big selling point of proprietary is again.
BTW, Geek Squad did a really good job. Their laptop and inet connection was really nicely done. And they can get there to fix something before any of us could.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
....by Bruce Perens: http://www.perens.com/Articles/Economic.html. Very thorough, good piece demystifying the economics of open soruce.
On a small scale, I adopted the model of Comersus, http://www.comersus.com/index.html, give the basic product away for free and sell add-ons (like gui admin tools) inexpensively. People can use the free product and can choose to write their own add-ons.
If you offer a good product freely, people will download it, test it out, and maybe end up using it. Of the percentage that choos to use it, some will desire better tools, interfaces, etc. If you price the add-ons low enough, some of those people will realize that is is cheaper for them to buy your stuff than to build it themselves.
I don't have a problem. I can quit any time I want. I just don't want to right now.
Counterfitting
;P
Spam
Both of these can make money using OSS.
You have no chance to survive make your time. ....
Ha Ha Ha Ha
I pulled a jack move to cop this sig
you have a license for all of your software then?
This has probably been mentioned already...but I just want to throw this out there...not like I use mod points or anything anyway: In my software engineering class, we are just starting to study classical vs open source software models...and when I approached the professor with the question of freedom in OSS, he said: "Open Source is not free as in "free beer", but free as in "freedom of speech"." I found this very profound, and it has opened my mind and hopefully in the future inspire me to develop open source software.
How company can make money, if its products are available for free?
Easy. Don't sell products.
"How will programmers get paid?"
"Do you have a programming job?"
"Yes. I work for a closed-source software vendor."
"How are you paid?"
"By the hour/salary."
"Not by the project? So you're providing a service?"
"Yes."
"Would a customer buy a piece of software if it didn't do anything?"
"No."
"So the closed source model turns your service into a product, so that it can be turned back into a service when the user installs it. If customers are interested in services through software, why bother with products?"
Product-ification is an inefficiency in the marketplace. Competition is discovering this.
Ask Bruce Perens. Only about 30% of software is shrink wrapped, and the percentage is shrinking.
I believe much of the power of open source development is that it allows organizations to develop custom in-house applications. Instead of being stuck with a proprietary system that may, or may not, work exactly for their purposes they have the option of hiring developers to produce exactly what they need. While there obviously is little area for profit for software vendors (short of aforementioned selling of set-up, support), it allows a lot of organizations (e.g. research labs, many college institutions) function more efficently, etc. In short, the money (in most cases) can be found in gained efficency. Also, as refernce, note how much documentation on tldp.org there is that was written by people encouraged by their companies to do so, allowing for a win-win situation -- for the people who got to spend company time writting up public documentation, and that next time issues come along in the company (or others) their will be documentation to help them through.
We've had this problem, so I'm not speaking theoretically. Most of our users bought support with the purchase of our commercial product, but after one year many of them didn't want to renew because they hadn't had any problems and didn't know what they were paying for.
A business plan that is based on support is at direct cross purposes with creating high-quality, easy-to-use software.
For a business, getting revenue from the support side costs more than from the product side. You have to staff up human beings and call centers for support. You have neither cost for product.
Widget foo once developed (with a large R&D cost up front) can be sold many times over without incurring any cost, except for maybe cost of media, which is dirt cheap.
... which is almost always a tool to do something that is distinctly unique to the customer's operation.
Take the simple case of a financial model, implemented mostly (or even entirely) via a spreadsheet. This may involve integrating charts and printed reports, and maybe is kicked off on a regular basis as a cron table entry or some such thing. There may be security considerations requiring encryption of data files and/or transmissions of encrypted data.
All of these things can be accomplished using either purchased proprietary programs (which the customer may or may not have already installed) or open source programs.
Typically, the customer has some expectation of the time frame they expect this tool to function over. If it is more than about 18 months, then you are looking at the possibility of seeing new hardware or software come into play that may necessitate an upgrade of the programs used to facilitate the user's "toolware".
A prudent salesperson would point this out to the client/prospect, and note that while they cannot predict the cost of a future proprietary software upgrade, they will commit to a specific (perhaps zero) cost for any required open source upgrades with the purchase of a service & support contract.
At this point, we see some clear advantages to using open source software to earn a living in the contracting business:
1) it permits a potentially lower implementation cost.
2) it allows the contractor to offer a fixed price support agreement at a reasonable rate.
3) it clears the water regarding what is being purchased -- which is the effort involved in orchestrating the various software components toward producing a "tool" that is what the customer wants.
If the customer wanted to do what they are paying the contractor to do for them, they would, as it's not rocket science. However, most customers see this kind of effort as a nonproductive use of their time, and recognize the benefits of having an experienced professional do the job for them, especially if it is an infrequently performed task.
Using proprietary software when equivalent open source alternatives exist is usually just a means of jacking up the price the customer pays. Remember that the thing you create is what the customer is paying for, and that unless you're coding the tools you use (and if you are, you'd better have a damn good reason for doing so), it is to your and your customers' best interests to use the programs that offer the best results for the least money.
And typically, those would be open source.
"GMZ: Was this always meant to be free software ? Did you ever try to "get rich" with it? Do you regret that you didn't?
LL: At the time, it never really occurred to me that people would pay money for software. I certainly didn't think that people would pay money for a book about software. Fortunately, Peter Gordon at Addison-Wesley convinced me to turn the LaTeX manual into a book. In retrospect, I think I made more money by giving the software away and selling the book than I would have by trying to sell the software. I don't think TeX and LaTeX would have become popular had they not been free. Indeed, I think most users would have been happier with Scribe. Had Scribe been free and had it continued to be supported, I suspect it would have won out over TeX. On the other hand, I think it would have been supplanted more quickly by Word than TeX has been." (From TUGboat 22 (2001)
Just a very succesful case of money made out of free/open source software that is often overlooked (and maybe one of the oldest cases as well!)
Imho for a small software house it could be downright to impossible to make out money out of THEIR OWN free software, if their value is in the software they develop.
:
Look at most OSS based business : most of them are really hardware or support vendors.
So
1) Your business should not be in the software itself, but in hardware, support, data files or something else. Sun supports OpenOffice.org because every user migrating from MS to OOo is a potential user for their platform, and MS Office is a major obstacle for Win->*nix migration. In this way you effectively lose money in sw development, money that will come back through a different way.
2) Your business could be in custom-made software, but it should be a very consolidated business. You can offer your customers free software and this could be an interesting offer for a customer. However your price will probably be higher than competitors. Infact competitors selling proprietary s/w could offer a lower price, because they know their customer *have* to rely on them for support. If you give away your source you free your customer (and this *is* good) but you have to price the sw higher to compensate. And you cannot avoid that customer to resell the software they bought to other companies and this has an impact to your own market. You sell a program to a small custommade car vendor, and suddenly you discover he sold the s/w to a software house which changed two details and resold it to general motors.
3) Your customer should agree to this choice. This is less obvious than you can think : most customers will require you to sign tons of NDA and thus an OSS license will not be seen with the right eye.
4) Your platform should support this. For example you cannot officially develop OSS for gaming consoles for NDA reasons.
Apparently I'm confounded by button placement...
I have been making about 80% of my revenue consulting (and writing) and about 20% selling niche market commercial products. Recently, I started releasing all of my projects as GPLed code. This is an experiment, but I *think* that increased consulting revenue will make up for the loss of product revenue. Ask me in a year how this turned out :-)
:-)
It seems right to donate Free Software because my consulting business is leveraged strongly on using lots of open source projects (e.g., Tomcat, JoramJMS, Apache, etc.). Most of my customers are very cost conscious, and money that they don't have to spend on infrastructure tools can pay consulting fees
How could a restaurant make profit if the service isn't included in the prize?
How could a restaurant make profit if the refills are free?
Have we finally found the Second Step?
But I don't have a problem. I can quit any time I want to. I just don't want to right now.
Richard Stallman may protest that "free software" is about "free speech" rather than "free beer", but that's not true. It's about both, "free speech" and "free beer". But RMS cleverly hides the "free beer" part by pretending it's a necessary consequence of "free speech", rather than admitting that he really wants both. (After all, that smacks of Communism, which is a societal taboo...)
I've personally heard Stallman speak in public, addressing the reasons why he started his crusade. One of the points he made was that he felt it was immoral for him to refuse to oblige when a friend asks for a copy of any software in his possession. Since proprietary software makes it illegal for him to follow his moral code, he refuses to use proprietary software at all.
Stallman always makes a point of distinguishing "free software" from "open source" software, even though the latter is basically a marketing term for the former. Stallman emphasizes freedom very loudly, but he's really about the "free beer" just as much. The justifications for "open source" are more pragmatic and driven by quality issues, even though the definition is basically the same.
"Free beer" was not a necessary part of the Open Source Definition!
Granted, if the "free beer" requirement is dropped, "open source" really would differ from "free software", but that's not really a problem. It would even give Stallman a better justification for advocating the "free software" term besides just tilting at windmills. (Doesn't he get enough of that with his "GNU/Linux" tirades?)
On a practical basis, the only really useful goal is to ensure users can freely share patches when they want to. With the "free beer" requirement, obviously they can, but that's not the only way to achieve that goal. All the license really needs is to require that authorized users may freely modify and share (or sell) their modifications to other authorized users.
If this were the requirements of the OSD, we could have practical proprietary commercial software with open source code. Suppose you buy Quicken for Windows under such a license, and therefore the CD comes with the source code. You still can't legally give it to all your buddies and undercut Intuit's market -- that would still be a copyright violation. (And if you're going to violate the copyright, you'll probably do that with the current binary-only version anyhow.)
However, if you and a bunch of other Quicken customers want that version of Quicken to run well under Wine on Linux, you might want to share patches that help it to run better. The license would allow you to share your source code patches (and resulting binaries), but only with others who had already paid Intuit for their copy of Quicken for Windows. Intuit's market is still intact; people who want to use the software still have to pay for it -- but those who need to tweak the software aren't prohibited from doing so.
Now, let's suppose a company wants to port Quicken to Linux. They need to spend significant amounts of money to pay developers to port the source code, so they can't afford to give it away. The license could allow this company to produce a "Quicken for Linux" (probably not using the Quicken trademark however) and sell licenses to people who have already paid for a Quicken for Windows license, or even to sell the product directly to anyone, where Intuit's license fee will be sent to them as part of the sale. End users could still share patches for the Linux port, but only with other users who had paid for both the Quicken for Windows license and the license for the Linux port as well.
In this way, almost all of the practical real-world benefits of open source software could be available even in the realm of proprietary software, rather than forcing this "us vs. them" mentality. (Which exists because Stallman's goal is to exterminate proprietary software development!)
If the Open Source Definiti
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay
I wonder how this is working out for them; it may be a good example.
We apologize for the inconvenience.
All open source business models boil down to about the same thing, selling "support" of one kind or another.
But this model has some major drawbacks, the worst of which is that it actually encourages the authors to write bad software, ignore documentation, etc. The better the software becomes, the more clear the documentation, the less support is actually needed. The open source "business model" actually penalizes good work...and the better the work, the higher the penalties.
Very large consulting forms (IBM, etc) can still make this model work as most of their "support" comes not from supporting the original software but rather from "integration" work; writing kludge software to get app A to talk to B and C and move data between D, E, and F. IOW they are supporting the infrastructure at large...not just their "own software". This business model however does not scale down; it only really works at the high end.
There is one other open source business model that can sometimes work, but typically only for a single developer. This is the model of "honor" or "donation" software such as BitTorrent, where the author is the high tech version of a street musician playing for tips. But I'd hardly call such a "business model".
Don't get me wrong, I'm a huge advocate of the open source movement...I just believe the people who really think you can create a practical business theory around it are confused. Almost without exception every "successful" open source business is either writing trash (eg RedHat), doing integration work (eg IBM), or begging for spare change (eg BitTorrent).
My
The first thing one must recognize is that open source commodotizes a product. So it's intellectual property has no value, and a company must provide some other value-add in order to make money. That turns most software companies' licensing models upside-down, where the license to the IP is the primary sale and the support, documentation, etc are secondary.
Business Models
Business Strategies
- Clayton Christensen's Conservation of Modularity - You make money at the borders to modular (open source) layers. Example: Sell proprietary software that runs on Linux.
- Dual License - Fee for commercial distribution rights and more features
- Consulting - Use OSS to provide higher margins at lower prices
- Subscription - Provide support for long-term "maintenance" revenue. Example: RedHat (for the most part).
- Patronage - Drive standards, enter entrenched markets, commoditize competitors. Example: IBM + Apache vs. MS IIS, IBM + Eclipse vs. Sun & MS.
- Hosted - Use OSS to provide a service.
- Embedded - Use OSS in an embedded system to save on license costs.
Good sourceIf you use their framework to develop opensource projects, you qualify for their OpenSource Edition License. However, if you want to keep the sources all to yourself you can, but it will cost.
This allows Trolltech to make money and stay in business while still supporting the FOSS community.
Why does this entire news item smell like a troll?
"I think it would be a good idea" Gandhi, on Western Civilisation
it costs money to analyze, design, develop, distribute, evangelize. Someone will pay for those different but essential areas. If you are lucky, then you are a government employee (like many Euros) and no one really pays, or work in the university world (nearly the same as previous), or are a student at a highspeed internet enabled playground (god knows who ends up paying) or are a basement coder who works at a fast food joint for ISP money and do it for the joy of knowing your code will be on the list of 3000 application ported to FreeBSD but never used. Otherwise, you probably can't make much as a normal commercial software inventor, which is increasingly seen as an anachronism from the last century.
The if...were is a hypothetical subjunctive; the writer is making a statement contrary to fact. The company's products are not available for free; the case is being postulated where they are.
Maybe, but I think there's something else going on here. In the clause, How can a company make money, the semantic entity denoted by company is nonspecific. That is, there is no actual, individuated company the speaker is thinking of. Rather, I think the OP meant to say, How can any old company whose products really are available for free, make money?.
Thus the if in the original sentence is not used to encode irrealis semantics (that is, in this case, to denote hypotheticality); rather, it is used to do restrict what kind of companies are allowed to be instantiated for the nonspecific a company.
(Linguists call this phenomenon "delimitation of the domain". It's something normally done with adjectives. For example, in the sentence Mary kicked a ball, any ball may be instantiated. OTOH, in Mary kicked a red ball, only an element of the subset of the set of all balls will do.)
So the way I would say the sentence is, How can a company make money if its products are available for free?. That is, I would not use the subjunctive -- the subjunctive is used to encode irrealis modality, which (according to my own native-speaker intuition) is not warranted here.
Of course, I'm a descriptive type (not prescriptive), so no matter how a speaker chooses to say it, I probably won't be offended. :)
People who are more interested in this stuff should check out Linguistic Semantics by William Frawley. No, I am not William Frawley.
Hi all, i am doing my business based on e-learning and i am doing good stuff with my business. I starte writing GPL code and selling services based on it because in this way i don't have tought regarding "my customer have copied this" this is a mess", and then i also think that customer is more free and more happy! (My customers are generally BIG companies). Regards Claudio www.docebolms.org
I couldn't resist, after reading your sig...
Is that why you SHAVE?
Anonymous Coward
I just read
Eclipse.
IBM gives it away for free as open source software.
It also sells it for a tidy profit--as it's the basis of WebSphere Studio Application Developer.
It's not just a library, and IBM created it from scratch, so there's no "appropriating" or relying on people contributing their labor for free.
Happy now?
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
38.8 million, on 96.5 billion
.000402 of sales..
(with a b) in sales in 2004
what percent is that?
%.0402
or
less than 1 half of 1 tenth of one percent
oh, I'm sorry, that's over four years?
about 1 tenth of 1 tenth of one percent of sales
Is that fathomable? I laud IBM for it's participation in FOSS, but- it's not even a drop in IBM's revenues...
every day http://en.wikipedia.org/wiki/Special:Random
I operate four sites based on an open-source CMS application using PHP and MySQL (more open-source of course!). I've made various tweaks to the sites over the years but have always been extremely thankful to the application's developer community, even having gone so far as financially supporting their continued devlopment. I figure it's the least I can do to help them with their efforts since these sites are generating a large portion of my bread and butter.
:-)
Is it possible for developers to make money off of their efforts even if they "give" their software away? Most definitely. Because, while they may have many whom don't offer financial support, they will have many whom will and, at the same time, further expand their effort's presence.
Just my two cents.
Regards,
Kory
Paths to make money of OSS
1) Support. Provide support for the software. Fixing or adapting it to the customers requirements for money.
2) Installation. Really a subset of support. Will install and train in the usage of OSS for money.
3) Add/Create OSS for money. They customer wants something. You will code it.
You want a red hat baseball cap? You pay money for that. You want a red hat t-shirt? You pay money for that. You want a CD with the red hat logo on it? You pay money for that. They are not selling open source software, they are selling BRANDED open source software. They are selling the idea that their open source software is somehow better than, more secure than, sexier than the other guy's open source software. Branding sells. There's nothing in the licenses that says you can brand it. Gentoo Rulez! ;-)
Almost sparks up again the whole debate on SVEASOFT and their actions... who is right in that situation.
http://www.linksysonline.com/
Also, for those who view open source as a development model, rather than as a loose synonym for Free Software, what you're describing isn't really open source. If the public-at-large doesn't have access to the software, then obviously, the public-at-large isn't going to be contributing to it (or auditing, etc) either. "Many eyes" just turned into your development team plus your customers.
What you describe, though, is a possibly attractive alternative to open source. As long as a customer has access to the source and is free to maintain it (or hire anyone they wish to maintain it), then that's a great feature and it takes some of the wind out of Free Software's sails.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Again, disclosing such relationships is considered to be the professional thing to do. Even if 99% of your readers know. Thanks.
PHP is 'free' by the developers and they sell the ZEND optimizer.
That doesn't mean it's unviable as a money-maker, but it does mean you'll never get rich. You'll be working as a professional all your life, with your income being proportional to your labor. Stop working, and you stop making money, because you're selling your time. You're working for money instead of having it work for you.
Now look at the people on the Golf course. Most of them probably aren't professionals. They're smarter: they own money-making assets. It can be real estate, or stocks, or it can be "IP" which they put on a CD inside a box, which costs them a dollar a unit and they sell for a few hundred per unit.
That is something you can't do with Free Software. Even Red Hat can't do it (nobody would buy their boxes for more than a couple dollars, if it weren't for the support service that they bundle with the software).
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Just because software is open-source, doesn't always make it free. Free software and open-source software, though a lot alike, are also different. Open-source means that the source code to the program is open to the public to access... and even though many hackers can take that code and just recompile the program to run it, others cannot (or not everything you see in the code is what was included by the developer.) Therefore, just giving away software is something different... because a lot of the time the source code does not come with it. It really just depends on how you want to market your product.
"Instant gratification takes too long." - Carrie Fisher
Ummm... That's make it uncommon, wouldn't it?
Ignorance killed the cat. Curiosity was framed.
ANyone can go out and buy the pipes, tools, glue, etc for running water pipes. Plumbers still make money because there is a lot of skill in putting things together, and many people do not want to spend the time to learn those skills, preferring instead to pay someone who already knows them.
Not one plumber has ever said jack about what I do with the collection of pipes he's put in my house - I can sell them, take pictures of them, take them apart, anything. Yet plumbers are a viable career.
Volume.
They say the first thing to go is your penis. Well, it's either that or your brain. I forget which...
Also, the mySQL company has commerical products based on their open source product. I think they also sell support.
I think that any complex and widely used software product can make lots of money just selling support. The funny thing is that the open source product developers aren't the only ones who can sell support, they just have the most credibility for selling support.
With all due respect, but you have no idea what you are talking about.
First of all Red Hat, or any other company for that matter, are not appropriated the work of others. That is a vulgar lie.
The people that have produced the software (Red Hat payed employees amongst them) have released it under licensing terms that allows companies like Red Hat to make bussiness. All the GPLed parts are freely available, and they not only make them available but are contributing to a completely free project like Fedora.
Red Hat, under the terms of the GPL, is nopt obliged to produce anything if they do not wish to do so. They could just package the software and charge for those services, but what they are selling is support training and advice.
Software is a commodity, the GPL helps to comodize it.
You are a vulgar liar and should be ashamed of yourslef or are a completely ignorant person that can't even take the time to understand the GPL but then ejaculates an opinion like if you knew what you are talking about.
What a prick.
IANAL but write like a drunk one.
well... we don't want to do that for you... and we don't have the time to do it...
But I'll pay you $5,000,000 if you fill Grand Canyon with water for me...
If you wrtie a software that needs to be supported you will make money.
If you just support already existing sofware the deal is even better for you.
So what the heck your damn point is?
IANAL but write like a drunk one.
Do you keep towels on hand to wipe off the saliva that flies onto your screen?
It's important to understand that commerce was never the goal of open source development and it still isn't. Most people who write open source software do so because they like to, and can, by virtue of having the time outside of their day jobs (yes, there are people like Ingo Molnar who get paid to hack on the kernel but there are very few of them). If you try to sell an OSS software, you're competing with 100s of people who will clone your effort and give it away for free - because it's the activity of 'hacking' and writing software that drives them, not the commerce behind the product. This is why it's hardly a surprise that many people who've tried making a living of selling OSS have failed. IMO, the only way to make money off OSS is by exploiting it - by putting it on devices and selling the devices - since nobody's ever going to clone a device and give it away for free, by packaging up different libraries and software and turning them into a web service, since again, nobody's ever going to buy server space and give away your niche web services for free.
I'll keep it in my evangelization arsenal....
IANAL but write like a drunk one.
Second, nobody cares about "personal service" with respect to technology products.
You are incorrect. Plenty of companies will pay for such a service. I have worked for many of them. Even the most recent company for which i worked liked the deal - and they were cheap bastards.
When I saw the headline, I thought for a moment it was about making counterfeit bills using Open Source Software...
But... it's really simple.
If you write software and you give away the code, nobody's gonna pay you for a copy.
So, you'll have to come up with something else.
Shipping and handling seems to keep most infomercials afloat, so why not just stop making the programs downloadable, but rather give the CD away for free and charge $49.95 for shipping and handling?
People are gonna share it amongst themselves after they get it anyway, like they do with all software, so you won't be losing anything...
And you're not selling the product, you're just charging for shipping and handling...
Oh, definitely agreed, although it has always been presented to me as in line with "open source" in the manner in which I have described, when I have described it, and I have seen licenses (perhaps I exaggerated the amount in the parent post, although I am not sure since the influence of the GPL in "open" software development polarizes the community such that it's hard to really tell if there is more GPL or LGPL derivatives compared to those similar to the model I desribe) which lean toward my description. I am unsure if this is really a misnomer, or if it's just that we have all come to accept the (very unrestrictive, IMO) GPL as the de facto standard for open sourcing. Regardless, it is the direction I would like to see most software companies go. Where they are unable to provide a feature, they can gain the financial benefit of someone else's hard work in making their product usable, and certainly make life easier for those who have to develop around third-party software. I find that it combines the progressive nature of the open source community and yet maintains the cut-throat corporate money-drone side as well.
I really appreciate the GPL, but I also think it important to stress that the GPL (and BSD-licensing as well) is not the only open source license available for software, unless you use already-GPL code. (Although I was under the impression that you can add to the GPL by wrapping around it your own license, so long as it does not conflict with the GPL.
My mindset comes from a more restrictive open license (which indeed sounds and probably is conflicting and now that you mention it, might be a misnomer), especially in the case of situations like voting machines, etc. Now, while I don't want to necessarily spur a flamewar about voting machines, one of the issues has been where companies like Diebold (if I am confusing company names, please forgive me) have been unwilling to open the source for auditing purposes and many people do not want to completely open the source to anyone and everyone for one reason or another. However, there has been a (legitimate, I think) call for regulating this process and assuring that the software is reliable outside of in-company code reviews. Contrast this with forensics software which must, on some level, be open sourced for peer review for it to fall under the Federal Rules of Evidence. However, most forensics suites (I am not talking about live Linux CDs and such which, btw, are super-useful forensics tools) are not open source as in go-to-the-website-and-download-it. I suppose that was what I was thinking. The solution I suggest may be a viable alternative or compromise, falling in line with the forensics direction of doing things, only a little more protective of the voting machine companies' rights if you limit the "customer" to include the U.S. government or an "independent" auditing company, although there is a lot to be said about that.
However, and I may be incorrect in thinking so, I was fairly sure that I heard in a conference years ago, concerning the GPL, by someone involved in that community, that alterations had to be made available on-request, but that your own licensing wrap could limit this to your customers, and I though TiVo was offered as an example, but I could be mistaken. My point wasn't intended to necessarily be about the GPL as much as open source licensing in general, although I believe that the GPL has made for a very successful and wonderful model. If I am wrong about it's restrict-ability, and I suppose that I should open up the newest version of the GPL and really poor over it, then I thank you for correcting me. Honestly, I am less familiar with the GPL specifically than I ought to be.
In the end, though, I believe you are right, Sloppy. I am sure this will gain me no favors with the GPL-promoting community, but if I wrote something from-scratch, the model I described would probably be the direction I would go as far as licensing goes, especially if my software was boutique and industry-specific, since it would afford me the most profit with the most "free development" within the community it was intended, while offering the attribute of being open to those who need it (and pay for it.)
*-*-*-*-*-*-*-*
"We are Linux. Resistance is measured in Ohms."
(see subject)
You might be interested in Eric Raymond's discussion of the subject, "The Magic Cauldron", which can be read online here
I have never made but one prayer to God, a very short one: "O Lord, make my enemies ridiculous." And God granted it.
Re: the GPL:
I'm well-aware of the consequences of the GPL. The GPL, in summary, allows the end-user the right to use the GPL'd software in whatever way they want internal to their person/business. No source code release is required in this case, but the license doesn't forbid it either.
You're also free to redistribute unmodified binaries and/or unmodified source as you so choose, so long as either the license is GPL-compatible, is the original GPL license included with the software, or the new license does not impose further restrictions on recipients.
Where the GPL's sticking point comes into play is with modified code. If the modifications are used internally to one's person/business, one is free to use them as they please, and they don't have to be released to anybody.
But if the binaries are to be redistributed outside of one's person/business, then the source code for those modifications must be made available for a minimum of 3 years at no greater charge than the cost of distribution (bandwidth, CDs + shipping, etc.).
It is for this reason, as you note, that the GPL helps "comodize" (sp; try "commoditize") the product of software. I don't think I ever disputed that, nor did I ever say the GPL was a bad license...
Re: Redhat:
I never said Redhat has produced nothing at all; indeed, I listed some (Bluecurve, RPM, and kernel tweaks. They've also contributed to Cygwin, IIRC, at least in funding it, which is significant).
My point was that relative to the software made available to the community by the community of developers, Redhat's contributions back to it are pretty minor. That shouldn't come as too much of a shock, given that Redhat cannot employ anywhere nearly as many developers themselves as contribute to OSS from around the world of their own volition; Redhat simply *cannot* contribute a relatively-large amount by virtue of the cost of developer labor.
I also don't believe I ever said they were under obligation to provide anything back to the community, nor should they be (except as bound by the terms of whatever licenses of whatever software they choose to include with their distro).
I admit I mis-spoke when I said they "appropriated" peoples' work (I had a slightly-off definition of the word "appropriated" in mind when I wrote that) -- I'll grant you that much, and for that, I do apologize. That wasn't quite an accurate term -- "copied" is certainly safer. Regardless though, you can't deny the fact that most of the software they sell was not written by Redhat, it was written by other members of the community.
Then again, more power to them for it. If they can make money off the good nature of some people voluntarily giving away their own work, so be it; I'm not arguing for their demise. My whole point in all this, to be relevant to the original question, is that OSS developers are, in a way, committing suicide, or at least are working for free at the profit of somebody else, which seems backasswards to me.
It's obviously a very arguable point, and I don't hold it as a tautology (I think there are plenty of cases in which writing OSS is a very good thing for people -- basically any library you can think of seems like a good example to me, as it allows people to build off of fundamental software components), but I think maybe the trend here is for OSS developers to go running off a cliff, like lemmings, rather than stopping at the edge and asking, "OK, should I jump, or should I find an easier way down that doesn't kill me?"
Take it for what you will; I have a feeling your knee has jerked too hard to understand my point...
Is Capitalism Good for the Poor?
The obvious answer to the question posted is the well known essay "The Magic Cauldron"
n /
http://www.catb.org/~esr/writings/magic-cauldro
I can't believe nobody mentioned it before. (Yes! I actually checked it, so if someone did mention it, then Slashdot search sucks!)
Quick summary: an enormous chunk of programmers write code that no one outside of their respective companies sets eyes on. These people routinely integrate open source code into their projects and also contribute back to it in code, feedback, financing, hiring consultants, etc. It's an integral part of, to use Microsoft's terms, the software ecosystem.
Open source already dominates the software service market. Conquering the software product market would be swell, but getting Joe Sixpack to run some form of Linux sure isn't my perogative right now.
It seems to me that all of the answers say "Writing great software has no value, but answer a question about it or writing a book is worth money". Doesn't this strike anyone else as strange? Why doesn't the prrogramming community put value on its labor, but then hapily spends $50 a book with O'Reilly. Why should someone answering a call be worth more money than the ori
Why should O'Reilly make money on the programmer's labor and not the programmer? A very strange ethos.
Free Software is free. It's hard to argue with such statement.
Oh, but some people argue vehemently against it. I once was put in contact with a woman who ran a nonprofit helping inner city children. I offered to give her as many pallet loads of perfectly working Pentium 1 class computers (complete with monitors, kb, mouse, and all) to give out to said needy children. First, she complained that I wasn't going to send my truck to deliver them for free as well. So I agreed to send them. Then she complained that I wasn't going to give her licenses for Windows and Office. I offered to put RedHat and OpenOffice on them for free. She told me there was no such thing as free Office software and hung up on me.
So yes, one *can* argue with free.
How company can make money, if its products are available for free?
Bottled water companies are making money selling a product that everyone already has in abundant quantities right in their own home!
Bottled water is a $4 billion/year market and is still growing.
It's rather simple. If you have a product that you own, then you get most of the money. If it is a free product, then servicing the product is how you make money. That would require many people to service the product. You have to pay people: it's called wealth distribution. And anyone can become an independ service provider. So the few wealthy people at the top can't control the revenues. They can't just fire someone who has an opinion. They have to treat people decent or the people leave and start their own service company. Which is easy to do if the product is free!
BTW, that is the original intention of Richard Stallman (Mr. GNU himself).
Wealth should not be concentrated to a few people at the top. I believe in capitalism. It should be heavily regulated, otherwise only unethical people gain wealth. Which is the current state of affairs in the world today. Look at Microsoft. They may have produced the more millionaire employees than any company in history, but the wealth is still to concentrated into a small group.
I believe it is quite easy to come up with ideas for OS business models targeted towards business software... Charge for support, charge for add-ons, etc...
But what about business models for software targeted towards home users? I have thought how much fun it would be to write an open source game or other consumer product. Something that businesses couldn't really use.... How can you make money off of home users of software when you don't charge for it? Why would they want to pay for support when you can search the internet?
'How company can make money, if its products are available for free?'
SALES VOLUME! You obviously know nothing about business.
The time is up for companies that make money purely from software, open source or proprietary.
Software as a product is too tenuous a base for a organisation - one day you may have the market-leading product - the next someone has wiped you out with a competing free open source product. Platforms and technologies change so radidly - longevity is always going to be difficult. Many people never invest in a software companies for precisely this reason.
Base your company of services or real physical products that rely on your software, not the actual software itself.
It's the difference between how do I make money writing on top of software someone else has already written and open sourced AND how do I make money selling the software I wrote and opensourced?
If time and resource were not an issue (ie if there's another source of income and you're not struggling to pay the bills and you have alot of free time -- hey that sounds like a profile for a ./'er : ) ) then the difference is minor. But if time and resource were issues, then the person who wrote the software has already spent it vs. the person who didn't write it.
To your credit, your reply still applies to some extent. He/she has to take it up a notch and sell something complementing the software, be it service, customization, etc. He/she just has to do it, _on top_ of what they've already done.
I'm starting to wonder if it's possible to make money actually *selling* software at all. Even when you try to give things away for nothing, people still buy from Microsoft instead. Look at OpenOffice vs. MS Office, for example.
I'm thinking primarily about consumer software and also web services here, not specialised stuff. Because the 'net is paid for by advertising and most of their desktop software is bundled with the hardware they rarely if ever are faced with the possibility of paying for something, and when they are it seems too expensive.
So if you can find a way to make money through free software - whether that's addware (e.g. Opera) or support contracts (Redhat) - I reckon you've got a chance.
But is there a way that, for example, Mozilla can ever make a profit?
You earn money like all the rest of us 9-5 programmers. Instead of sitting on your rear end all day getting free money from code you wrote 5 years ago, (that means YOU you lazy internet explorer swabs!), you have to show up at work around 9, and go home at 5, and show results. The company doesn't fscking CARE how you do it, as long as you just DO it and get the results you promised!
Oh you say this open source stuff you got will do it faster and cheaper? Is it legal? Will you deliver on time? Then fine. Now do your work!
Sure you won't get quite as rich as Bill Gates, but it earns enough to buy your daily bread, and maybe a new computer every month or 2 if you really feel like it (YMMV somewhat, varies per country).
'How company can make money, if its products are available for free?'
If you create free software you don't have to make it available "for free". It's not free as in "free beer". It's free as in "free speech". Hasn't this been tought enough yet?
If you create a program and license it under GPL, you may sell it just as you would sell a proprietary program. The main difference is that you attach the source code and let the customers use it (almost) whatever way they want.
I find making money with open-source to be a pretty straight-forward process. My only trouble has been with the TWAIN drivers I needed to scan the individual bills before I printed more.
Mmmmmm... Bold, yet refreshing!
Actually, SuSe is sold in stores like Circuit City or Best Buy and, while I can't say that it's as profitable as the selling of support, people do buy that software. Red Hat has done the same. Mostly, you're buying pretty disks and the promise of support, but they're still selling their open source software and are fairly successful groups.
Agreed, though, that companies like IBM have made more money using open source in their products, but just by coupling your open source solution with a hardware platform does not completely negate the value of the open source software. I can think of tons of instances where this is true in the embedded community, where open sourcing the software is often necessary (since many embedded systems is used for development purposes), and the software is bought loaded on the hardware, but is hardware-specific. You might consider TiVo, for instance. In the case of TiVo, are you paying for the software, or just the hardware? In that case, I would say both, packaged. If you write TiVo for their code, since it uses GPL software, IIRC, they must send you the source. True, it's probably useless without their hardware, but I call that a sound business foundation, yes?
I proposed an open source business model here that you might find interesting that, although it is debatable if it's true to the spirit of open source as accepted by the community, would theoretically make a perfectly valid, profitable business model.
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"We are Linux. Resistance is measured in Ohms."
Ok..Not exactly me..but my company. We have used products from AdaCore Technologies. http://www.gnat.com/.A couple of years back, the cost for several supported seats for both a self and a cross compiler (for embedded work) with a few small add ons was something like $25k. We'd gladly pay it again. The product was great. The support was great and we had access to the source code which is a real help in an embedded environment .
--- Liberty in our Lifetime
It's funny because everybody is talking about making money using or support a Open Source software, but nobody is talking about making money WRITING Open source software.
So, who is gonna develop all the software? And invest in new releases?
We are capitalists, there is no such thing as free lunch or Free Software.
The last great new idea of giving things away was the internet boom...I don't have say where are those companies now...
That's the best reply to my rhetoric that I've ever heard.
How we know is more important than what we know.
...for what it is, a *tool* to do the real work. Use that tool with other tools to design build sell and service widgets,"stuff", things of tangible value to society that people are willing to exchange cash for. Just the software as it is is not where the ultimate money comes from in most instances, it's just used to expedite the creation and servicing of tangible *things*. Does a carpenter try to make all his money selling off his hammer and saw and nails, or does he build stuff every day with those tools, and make his money that way? You make your money off of those *things* whatever they are, a-z, check yellow pages for complete list of "stuff" humans find valuable enough to purchase or have serviced after purchase. Software and computers are a merely a partial means to that end. Don't lose sight of that reality, don't try to overly compete only in the tool business, just go use those open source tools you can get to go do actually productive work of value.
he's lying to you. They really only care about the exhorbitant prices they can charge, and unholy profits they can make.
If they cared two whits about human suffering they would make their methods available to everyone, and make their profit, an honest profit, by serving their market better than their competitors.
1. Write closed software
2. Sell software and make lots of money
3. Claim R&D tax breaks
4. Donate now obsolete software product to charity
5. Claim charitable gift tax break
6. Use community to maintain old software product
7. Return to step 1 for new features
Witness Apache, OOo, Netscape, BSD...
No, GP just can't read well. ;)
Tim O'Reilly touched on this topic in his EclipseCon 2005 keynote address. One of the things he pointed out is that a company can make money by creating a unique set of data, instead of a unique set of software. For example, the maps that power MapQuest, et. al., come from a company called Navteq. Amazon adds value by collecting user data and using to show you popular books related to the one you just bought. Companies like Digital Envoy provide mappings of IP addresses to geographic locations. There's no doubt that the open source community could create free software to drive yet another online map, bookstore, or ad engine to target specific geographic regions, but they'd be hard pressed to come up with the data required to populate them. Similarly (pointed out Tim) imagine if Google released their search engine source code tomorrow. What would you do with it? Without a way to administer the monster array of cheap servers that Google has, there's no way you could compete with them. Google's secret sauce is not their software to rank search results -- it's that they've actually gone and done it for all those zillions of web pages and made that data available for you to use.
Yeah buddy, we just found the second step!!!
Maybe I just haven't seen the light, but it still seems to me that Open Source remains the antithesis of the software development industry, at least the part that deals with the generation of wealth from the creation and sale of software. The economics of Open Source are that the act of authoring and creating software is not directly remunerated, but that there are secondary industries based on ancilliary services such as distribution, support, customization and consultancy. Perhaps it is true to say, therefore, that the Open Source system operates outside the rules of a free market economy, and is more akin to a Communist system of central planning, equal contribution from selfless, willing participants, and free consumption for all. What do you think?
/. crowd will proove me wrong!
There seem to be two main providers (authors) of Open Source software: volunteers, who contribute for kudos within their "on-line" community and possibly for altruistic purposes; and government-funded workers in universities, research centres, hospitals etc. I am not aware that mainstream commercial organizations, companies, or other "for profit" organizations represent a large proportion of the Open Source supply-side. This is perhaps because the contribution of time, effort or intellectual property to Open Source does not normally make economic sense as there is not a direct, associated pay-back.
The closest model to this is the type of company that consumes Open Source materials and submits contributions back to the community. I suspect that these contributions are those that were done as part of the course of business, and are not the result of any out-of-the-way development or sense of generosity. And perhaps the code 'feedback' is ultimately self-serving.
An interesting element in the economics of Open Source is that with the exception of government-paid workers the remaining authors are largely professional software developers who write software for a living as their main employment. Of course there will be many exceptions to this, but my suspicion is that Open Source can only exist on the back of Closed Source.
Clearly there must be a limit, or balance, to the scope and scale of Open Source or, like a snake eating its own tail, the movement will eliminate its own sustaining workforce and falter. Rather, there will be an equilibrium point. A related observation may be that contributors employed by for-profit companies will have limitations on the scope of their involvement, since most employment agreements lay claims on related intellectual property whether written at the office or at home. This, combined with a software developer's love of writing generic "super-tools", has meant that the most successful Open Source projects are software engineering tools, utilities and building blocks: Linux, Java, IDEs, configuration management tools, bug tracking tools, MySQL, PHP, PHPBB, Apache, gcc, etc. When I looked at this a year ago the four largest categories (55%, or 47,000 projects) at SourceForge.com are of this type. Indeed, these represent the majority of the 80,000 projects logged at that time.
I don't believe that the Open Source community would be moved to contribute on specific applications, such as the pacemaker example here. The available pool of kudos would be too small, as well as the available talent. No doubt the
Clearly the notion of free software is attractive to anyone with a software need. Personally, I am grateful to the authors of the software that I have downloaded for free, and will check-out SourceForge's 'Games/Entertainment' category forthwith; I am pleased to see Microsoft's strangle-hold on the desktop being seriously challenged by Linux. However, this is of course not good news for Microsoft. Although in danger of some sort of hypocracy, I would recommend that any software company watch the font of freeware available through GNU and SourceForge, and drink freely - so long as the 'copyleft' licensing terms can be accepted and managed.
Reg
"As many of us probably know, convincing people to run Free Software can sometimes be a tedious task."
That's because it's mostly rubbish. That is, compared to the pay alterntatives, its buggier, less feature rich and you're much more likely to be told to RTFM.
Good software stands on its own. You don't have to evangelise it, you just have to show people the software and lead them to quality information. Obscure man files that assume you already have a working knowledge of the system, and are a computer programmer don't count.
This is why I feel Open Source software is its own Achilles Heel. If you give away the software and documentation, and rely on selling the support (installation and technical) then you have set up a hidden incentive to make difficult software. If you live by the support, then you have no incentive to make software that is intuitive and easy to install and operate. In fact, you have a DISincentive. You're cutting your own throat to do so. So, this invariably leads to software that is difficult to install and use.
When I write commercial software, I sell the software and include free support (mostly -- advanced telephone support is non-free for some of my products, but basic e-mail support is always free). So, support is a COST to me, not a profit center. Therefore, it's my goal and incentive to make my software as easy to install and use as possible.
Somebody prove me wrong here, but I don't think it's a real stretch of logic or anything.
Only projects that are created and maintained by people who DON'T make a living from support -- projects that are funded by some other generosity/subsidy, or driven by pure altruism -- can be completely free of this yoke. Mozilla seems to be a good example. Somewhere between subsidy (originally Netscape/AOL) and altruism, they seem to have done a great job.
I'm sure there are plenty of others too, but they don't prove the "survive on support" business model any more than they disprove it.
I'm sure I'll be flamed to a crisp by zealots who find some specific project that doesn't fit my theory. Theories are not grounded on individual cases, they're built on a trend. Show me my logic is counter to the general trend, and I'll be a convert.
-- There is no truth. There is only Perception. To Percieve is to Exist.
I know that I have saved a great deal of money as a student by doing projects at home with open source programs. Right now I am working on a scrap book for my health class and it is being done in Open Office 2.0 Beta.
Posts not to be taken literally. Almost everything is sarcasm.