Making a Living Building Open Source Software?

asimbaig asks: "When I started my IT Staffing and Placement firm last year, I couldn't find a decent Applicant Tracking System (ATS) or an Open Source alternative. I then found SugarCRM, and was blown away by its power and ease of use. Partly frustrated with the existing vendors and partly inspired by SugarCRM, I decided to write that ATS using LAMP. 6 months and 45k lines of code later, I have just released the preview of industry's first Open Source ATS/HR Management system, called CATS. Now, it will be an interesting experiment to see if I can actually make a living out of it and move away from my IT staffing business. SugarCRM seems to be doing well, so why not?. Is anyone out there making a living from writing Open Source code?"

Comments

Yes, sort of.

[agent dero]

You're trying to do two very difficult things at the same time
a) start a successful business b) make money off open source

I know a few people that work for WindRiver, Apple, Adaptec, etc that make money off open source; I also know a few people that have actually started their own businesses and are making money.

Can't say I know anybody in both groups....

Good luck, hope you have good credit.

remember where your money comes from

[davek]

you must remember that since you're trying to profit from an open source project, the software itself is essentially public domain and you won't be able to sell licenses for it. If you try to jump through licensing hoops to try and prevent that, you won't get as much support from the OSS community in support and integration for your product. Remember you can't make money selling electrons.

So where's the money come from? That's what everyone's trying to figure out. The subscription model is one, selling support licenses is another. I'm trying to find a way to sell complete systems, so the value isn't so much in the software but in the labor put into building a complete open source system. There are as many ways to try and hack this as there are open source programmers.

Re:remember where your money comes from

[Eric Smith]

Your local electric company doesn't sell you any electrons. They only trade electrons with you.

For the Love of God, why....

[psykocrime]

create yet *another* OSS license???? Surely one of the existing
ones would have been sufficient... it's not like there aren't 900000 gazillion
to pick from.

Business Plan?

[99BottlesOfBeerInMyF]

Are you telling me you just spent a lot of time building a piece of software, which you've already licensed, and you've decided now is the time to come up with a business plan? That is pretty backwards, in my opinion.

There are a number of business plans for selling software and even a number of them for making money from Open Source Software:

Plan number one, sell licenses to closed source software. I think you've already missed this one and it has the disadvantage that it can't compete against an open source product in the long run.

Plan number two, get a company or conglomerate of companies to agree to pay you to develop and support a cheaper, better, more customizable alternative to their existing software. I think you missed this one two, if you already made the code public.

Plan number three, release code for free and try to get companies to adopt it and pay you for support and customization. This is probably your best bet at this point. You need to find out what current companies charge for support and what they charge for their software and meet or beat their prices; or, you need to provide significantly more functionality. You need to get some good sales guys and give them the advantages of your product over other products. Main advantages you hold include the fact that it is open and thus they can migrate to other systems and that you or they can customize it to meet their needs. Find out what their current software doesn't do that they would like and make yours do it, just for them. Emphasize the personal service as part of a support contract that is semi-annually renewed or whatever. This is your revenue. Drawbacks to this include that the better your software gets, the less likely they are to need support and they can always go with their own IT dept. or with a competitor for support. You have the edge in that you know it better than anyone and are someone external to blame/call.

Plan number four, release the product for free and promote it. Beg for donations from big companies that adopt it and other benefactors. If it becomes popular your reputation will be worth a lot to you for speaking engagements and other contract work.

Best of luck.

Dual licensing model

[larry_larry]

Perhaps a dual licensing model would allow you to make some money. Have source code open and available for free. Educational institutions, non-profit orgs and evaluators can use this... commercial user must buy a license. Non-commercial licensers must provide you with any modifications / improvements they make. Commercial users could get a more stable and better supported version. Also you could charge for services, training, ... Not sure how profitable this would be, but it might be better than a pure open source model. Anyone heard of people being successful under this model?

About making money:

[Futurepower(R)]

Adding to my previous comment: I meant that there is no g in join.

About making money: If you can convince businessmen that you are 100% trustworthy, you can make money by providing your software as a service and charging a small amount each month. Business people do not like running their own servers.

Fourth option: Ghostscript model

[Fencepost]

Ghostscript is actually available under two licenses:
* The current release is available under the AFPL which allows pretty much any personal use but limits commercial use (particularly as part of a product) to licensees who've dealt with Artifex. I looked into this at a past job; the cost wasn't worth it for what we were doing but could be worthwhile for larger-distribution products.
* The previous major release is available under the GPL, with its attendant permissions and restrictions.

So, you might be able to sell the current/maintained version while open-sourcing older versions.

In addition, you might be able to use the razor-blade model - give away the software, but charge for updates to data that's useful to the end-users such as tax information, etc.