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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?
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.
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.
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.
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.
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.
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.
'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
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.
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make install -not war
-- Thou hast strayed far from the path of the Avatar.
Yeah, but can anybody spot the other problem?
"How can a company make money if its products were available for free?"
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.
Lots more details in Wikipedia, of course.
(No, I'm not a card-carrying pedant. It's made out of plastic.)
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.
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.
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.
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.
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"We are Linux. Resistance is measured in Ohms."
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.
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
The question about making money is referring to the present - the same point at which the products are hypothetically available for free. English isn't a language where every 'if' clause takes a subjunctive. This sentence isn't expressing doubt or disbelief; it's a condition posed as a question.
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.
"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!)
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.
Volume.
They say the first thing to go is your penis. Well, it's either that or your brain. I forget which...