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Why is OSS Commercial Software So Expensive?

An anonymous reader asks: "Our startup honestly wanted to use OSS products. We do not want to spend time for any OSS bug fixing so our main requirement was -official support for all OSS products-. We thought were prepared to pay the price for OSS products, but then we got a price sticker shock. Now behold: QT is $3300 per seat. We have dropped the development and rewrote everything to C# (MSVS 2005 is ~$700). Embedded Linux from a reputable RT vendor is $25,000 per 5 seats per year. We needed only 3 seats. We had to buy 5 nevertheless. The support was bad. We will go for VxWorks or WinCE in our next product. Red Hat Linux WS is $299. An OEM version of Windows XP Pro is ~$140. A Cygwin commercial license will cost tens of thousands of dollars and is only available for large shops. We need 5 seats. Windows Unix services are free. After all, we have decided that the survival of our business is more important for us then 'do-good' ideas. Except for that embedded Linux (slated for WinCE or VxWorks substitution), we are not OSS shop anymore." Why are commercial ports of OSS software so expensive, and what would need to happen before they could be competitive in the future?

15 of 718 comments (clear)

  1. Not a Good Business Model for Enterprise by eldavojohn · · Score: 4, Insightful
    Why is OSS Commercial Software So Expensive?
    Possibly because it's not a good business model for enterprise consumers--and therefore must up its charges.

    I mean, you want to sell a product that a community developed. Which means its quality could be variable. On top of that, you want to support it. The depends on excellent documentation which isn't enforced in the open source community. There's probably a lot of dead OSS projects for every one successful OSS project. You'll notice that the software itself is very very free ... what the summary is complaining about is 'seats' (training or support).

    This particular user seems to be looking for portable technologies. The commercial versions of these technologies are still in their infancy which does not bode well for the OSS alternatives. I would suggest that you're paying the early adopter fees on a few of these things. Afterall, Google uses a stripped down version of Red Hat. My company of tens of thousands employees uses Red Hat company wide. They find the free cost to be quite lucrative--just buying support whenever it's needed.

    The OSS business model works well for the individual user who isn't looking for support because the free end product is out there for them and they use it if it works. The enterprise consumers looking for support year after year must pay quite a bit.

    The software itself is not expensive, nor is it necessarily harder to support--it's just very difficult to create this support out of nothing.

    In my opinion, you're going about OSS all wrong. You should stick with what is working and slowly move to a new OSS tool one at a time. You will encounter learning curves. But there is a lot of information online and, worse comes to worse, you can look at the source/documentation yourself.

    I imagine there's something about the product you aren't telling us about that is quite constraining ....
    --
    My work here is dung.
    1. Re:Not a Good Business Model for Enterprise by Anonymous Coward · · Score: 5, Insightful

      I mean, you want to sell a product that a community developed. Which means its quality could be variable. On top of that, you want to support it. The depends on excellent documentation which isn't enforced in the open source community. There's probably a lot of dead OSS projects for every one successful OSS project. You'll notice that the software itself is very very free ... what the summary is complaining about is 'seats' (training or support).

      How is anything you just said unique to F/OSS? The quality of proprietary software is variable, and so is the support. The quality of documentation for proprietary software is likewise spotty. Proprietary software projects die on the vine all the time; at least F/OSS projects can be easily picked up again, if there is any interest.

      As for the article's premise, that commercially supported F/OSS software is expensive - how is that any different than proprietary software? There's a reason that Paul Allen and Larry Ellison are in a boat building competition. I really with the Slashdot editors would spend a least an iota of energy attempting to filter out the trolls; but maybe they just enjoy the flamefests.

    2. Re:Not a Good Business Model for Enterprise by nine-times · · Score: 5, Insightful

      What I find surprising is that, in the few responses I've skimmed (including yours), I haven't seen anyone mention that these companies need to pay programmers. There's this tremendous myth that OSS is all written by good Samaritans in their spare time, and companies that sell it commercially simply rebrand it, box it, and ship it.

      It's like people think that Linux is free, so why can't Redhat distribute it for almost nothing? Redhat and Novel employ programmers, too. In fact, the paid programmers make a tremendous contribution to all of this FOSS we benefit from. That's right, sometimes it's the big companies' work that makes the FOSS version so good, so the commercial companies aren't getting all that work for free.

      I don't mean to insult anyone here, and I don't want to quibble about the ratio of good Samaritan contributions vs. paid contributions. Still, you can't discount that there are Redhat-employed programmers working on Redhat, and sometimes Redhat's work ends up in the free stuff.

      So what I'm saying is, businesses selling commercial OSS have the same costs as a closed shop, even though they receive some free help. And for all the free help they get, these savings are offset by the fact that people don't have to buy their software. So let's say they cut their programming costs in 50% (just a number I'm plucking out of the air), their revenue is also cut by 75% (another made up number) by people who would buy it, but decided instead to download for free.

      And this doesn't even take into account the whole dynamic of competition in commercial OSS. In short, for whatever Redhat spends in development, Novel also gets that work for free, and vice versa. Now maybe Novel doesn't want to use that work, and maybe Redhat is benefitting from Novel in just the same ways, but it sure does complicate the business model.

    3. Re:Not a Good Business Model for Enterprise by nine-times · · Score: 4, Insightful

      Microsoft offers support and training included in the cost of a license in Windows? I've never heard of that.

    4. Re:Not a Good Business Model for Enterprise by Znork · · Score: 4, Insightful

      "you can get it directly from the company that makes the software."

      Unless they're out of business. Or have discontinued the product. Or most of the development team has quit.

      The difference between opensource and proprietary software is that with proprietary software only one company is legally allowed to fix any bugs.

    5. Re:Not a Good Business Model for Enterprise by d.3.l.t.r.3.3 · · Score: 5, Insightful

      To my experience with commercial OSS solutions, commercial OSS with a project taken from the community is practically illicit competition. A company can live up with 2 or 3 integrators and sell software made by 10-20 people, manpower-wise. Sure they still have to pay for those 2 or 3 programmers, but it is way less than hiring, sustaining and training a whole staff.

      That's why I call it a scam. Starting up a project to be commercial OSS it's a nightmare: you get almost no support by the community till you have something working, especially if you aren't endorsed by one of the well-known OSS VIP who seems to be the only one that can say "I opened a new OSS project to improve my salary and climb the industry ladder" and get people working without salary for them. You are stuck with the same expenses and problems of closed source management, with the added value that a competitor can start integrate your solution once it works and make it better with 10-20% the money you invested in the project, assuming you are able to make it even with all the expenses to win the inertia of starting a business. Sure, given the time patches will start to come in (especially from early adopters, not necessarily by the extended community) but it too much risky to make it commercial open source from the start if you plan to start from scratch. Most of the successful OSS commercial solutions started up from hobby project or are simply integrations of other people work, they are not fair when they define themselves successful commercial enterprises, since they didn't deal with the startup costs and started with something of value by itself.

      In addition, for enterprise grade software, OSS makes no difference over proprietary solutions. I now work on a small corporation based on 7 different nations and everywhere, while the platforms used vary from full OSS (my preference) to totally Closed Source, the customer gets always the sources on software developed with full control over it. The added value of OSS for them is on the infrastructure (no money spent on anything is not strictly the software), not on the project itself. Wonder why corporations are moving to SOA? That's the reason, no more clients getting the source code to turn on the less paying maintainer, since they are getting only the services.

      Aside several enterprise projects, most of the OSS software reside in the realm of user-oriented utilities. Here, aside for being free, there's still too small interest on the source for the end users. I usually say to our managers that aside to fork a project to add a sterling point on your CV, nobody cares about sources on OSS software for personal use, since the selling points of these applications are cost (the less the better) and functionalities (the more the better). Sure OSS ensures these small projects will be alive even if original devs abandon it, but here more than anywhere its almost impossible to make money: if you want to get paid a bozo can start forking a free version again. If you get commercial someone can still relieve your software and make it better with less hassle, outselling you. There are a lot of commercial implementations of OSS software that are so much polished and user-captivating that outshadow community driven ones, most of them are on dog eat dog mode, continously cannibalizing other competitors in functionalities and sparky features (take a look at the jabber clients). So, if you are the one developing the software AND you are also in need to improve it to remain competitive, you are pretty much rising your internal costs and are more likely to be outsold by competitors that only integrates waiting on the road for code to come. Improvements have less impact than new features, but they are still costly. Planning new versions of your software while improving your current one to remain commercially competitive, if you aren't backed by a license that allows you to ask money from competition, pretty much kills you, otherwise your project will start to stagnate on itself (like many OSS do, to

      --

      Matteo Anelli

      .brain - http://www.dot-brain.com

  2. Commercial versions vs. "based on" by Southpaw018 · · Score: 5, Insightful

    Let's draw an extremely fine line here: commercial parts/versions of OSS products, and products built on OSS.

    Commercial versions of OSS products aren't worth it, anywhere, almost ever. Just look at the prices above. In almost every case, go with the closed soruce version, and you'll save yourself a hell of a lot of money.

    Now, look at two highly successful products built on open source: Fonality PBX (Asterisk) and Barracuda Spam firewall (Spamassassin). We use 'em both. I'm our entire IT department - just me. I already have too much on my plate, and when we were in the market for a new antispam solution, the natural pick was a Linux-Exim-Spamassassin/RBL frontend to our Exchange 2003 server. Powerful, effective, free (aside from hardware).
    Problem: I'm already working tons of overtime - do we pay a contractor $120/hour to come in and try to set a system up, then rely on me to support it when I already don't have time? Or, do we pay a company like Barracuda Networks $1300 for their itty bitty model of the spam firewall and get a system that's guaranteed, backed up by all the time they've spent developing their hardware and frontends, 24/7 support, automatic updates, and license-free monitoring and filtering? I don't have the numbers with me, but the cost in staff + contractor time + hardware vs. the Barracuda system (which is overkill for our little network) was something like 3:1.

    --
    ACs are modded -6. I don't read you, I don't mod you, I don't see you. Don't like it? Don't be a coward.
  3. Much of your cost is because you are "commercial" by NotQuiteReal · · Score: 4, Insightful
    The expensive items are because you want "commercial" versions - e.g. you want to create a closed product. (e.g. you cite how expensive it is to use Cygwin and Qt - commercially).

    You might want to consider your business model - can your product be FOSS too, and then YOU charge the big bucks for support, etc.?

    --
    This issue is a bit more complicated than you think.
  4. Broken Logic by mrsbrisby · · Score: 4, Insightful
    Why are commercial ports of OSS software so expensive,
    That assumes they are, which they arent. As you say, Red Hat Linux WS is $299. An OEM version of Windows XP Pro is ~$140. The problem is that support for Windows is $35 per call, per email, or per online chat. Of course, this only includes end-user support. Developer support is 250$ per call.

    You can compare QT to GDI+ all you like, but GDI+ works on one platform, and QT works on many. Expect to pay more for an increased feature set. Law of the land, open versus closed never has and likely never will have any effect on that.

    and what would need to happen before they could be competitive in the future?
    They already are. You can tell because Microsoft shills like yourself are pretending to have questions about them not being competitive on slashdot.
  5. Apples to oranges by Todd+Knarr · · Score: 4, Insightful

    You say you want official support. Then you proceed to compare an officially-supported copy of RedHat Enterprise Linux to an OEM copy of Windows XP. Well, I hate to break it to you, but that OEM copy of XP comes with no support. If you read the agreement, it says you as the system builder are responsible for supporting that copy once installed. You don't even get the installation support that comes with the $300 retail XP box. All you get is Windows Update, and the opportunity to hear the Microsoft rep tell you to call the company you bought your computer from. The same with Visual Studio. The commercial software isn't cheaper as far as support goes, they just aren't quoting you the real price until after you're committed.

  6. Re:Not a Good Business Model for Freedom. by hazah · · Score: 4, Insightful

    I hope you're not just trolling...

    Information wants to be free.

    What the hell is that supposed to even mean?! As far as I can tell, information is a pretty damn abstract concept, and it is people, if anything, that ever want something. Someone slaving away at the keyboard to make something work cannot be described as "information". It is called "labour".

    Hey, the argument works for other IP. Why should RH be an exception?

    First, to clarify it to anyone who may actually be misinformed enough to believe this nonesense, the whole idea behind the GPL is to undermine the concept of IP. Therefore, RH is most definately an exception to IP. While companies like Microsoft rely primarily on distribution sales (sometimes almost to the point of competing with themselves), RH is relying on providing customers with services (and they probably sell things too, but I don't feel like checking). So, no, this argument doesn't work, at all, without exception.

  7. "Information wants to be free" explained by ChaosDiscord · · Score: 4, Insightful
    Information wants to be free.
    What the hell is that supposed to even mean?! As far as I can tell, information is a pretty damn abstract concept, and it is people, if anything, that ever want something.

    I trust when your physics teacher said, "Water seeks its own level," you got equally bent out of shape, pointing out that water doesn't "seek" anything.

    Now the grandparent was indeed trolling. "Information wants to be free" isn't a moral justification for copyright infringement. Like "water seeks its own level," it's description, not prescription. It's a short reminder that information tends to be distributed. It's inherent to our nature as humans, we like sharing information. We invented speech, pictograms, writing, printing, telegraphs, telephones, film, television, fax machines, email, the web, and more because we love sharing information so much. All it takes for information to escape is for a single small leak. Once it's happened, you're done. To try and stop information from being free, we set up expensive technological measures like DRM and legal measures like confidentiality agreements and top secret clearance. And yet the information escapes.

    "Information wants to be free" has gotten a bad rap because some idiots decided it mean that information should be free. No, it's just a description of human nature. Information is going to tend to be reproduce and distributed. For people who rely on suppressing the spread of information it's a reminder of what they're up against, just like someone building dams needs to keep in mind that water seeks its own level.

  8. Re:Why not GPL version? by Mr.+Jaggers · · Score: 4, Insightful

    Agreed. The vendor is not always the best support provider. For example, one of the reasons that microsoft is so successful in providing "support" is that they have so many "certified" solution providers. Commercial software houses that try to rely on microsoft for software dev support (in my experience) end up sorely disappointed. Being able to contract out the support/bug fixing in a bid process can bring better prices. There's not reason that a third party couldn't provide adequate development support for an open source product.

    The OP also seemed to be rolling all of support in the enterprise into the same support goal; like why waste money at all on vendor support for the dev workstations? That's ludicrous. You know they'll eventually need an IT person to maintain their windows workstations, even if microsoft is providing security patches. That person can do desktop support, and if they are competent, likely get better results faster than a commercial support vendor.

    It sounds to me that the problem for this startup was more an issue of lack of leadership at the executive level with strong personal experience in open source embedded development. From the pricing, I'm pretty sure I know which RT linux vendor they went with, and if so, "reputable" was likely not evaluated from a developer standpoint. I would probably say that the "not want to spend time for any OSS bug fixing" attitude is the problem. I'd rather a platform with *all* the code PLUS noncommercial support any day over code+commercial support, or (worse) just the support. It's making a big assumption that somehow the commercial product is going to come bug free and that support is going to snap a patch out to you by the end of the week (or sooner).

    I would say a shop running less than 10 devs is probably not going to get that level of attention from a commercial vendor, but who knows? Maybe they will. I'm sure that the OP will come back in six months and tell us all about how csharp, visual studio, and windows ce saved the day. ROI! TCO! Rah rah rah!

    --

    When I grow up, I want to have Christopher Walken hair.
  9. The Questions Raises More Questions by crucini · · Score: 4, Insightful
    You haven't told us much about your startup. Are you tiny and poor? Do you have any employees?

    If you're tiny and poor, eating ramen and paying no salaries for now, then you don't need professional support for anything. You're better off saving that money and learning the skills needed to do it yourself.

    If you have at least one programmer on salary, the cost of tools, licenses, etc. is tiny compared to payroll. Are you seriously making a decision that affects your chance of success based on a few percent of your annual budget?

    Now behold: QT is $3300 per seat.

    Are you saying that you wrote the app to QT before checking the price? Seems to be implied by this "rewrote":
    We have dropped the development and rewrote everything to C# (MSVS 2005 is ~$700).

    (3300-700) * 5 = $13k. You completely ported your app to save $13k? This certainly tilts the balance towards "tiny and poor" and away from buying pricy "support". But how do you justify the choice of C#? Surely your 'behold' moment with QT taught you some caution?

    There are many factors in choosing a GUI toolkit. Price per development seat is a fairly minor one. The first question is, on what platforms must the GUI run? You haven't told us. You mentioned embedded Linux - is the GUI going to be part of the embedded product? Or running on PC's talking to the embedded product?
    If it's the former, do you realize that C#/Linux is a fairly risky path? Who will support you there? And how will you later hop to VxWorks, if needed?
    If it's the latter, have you asked an experienced Windows programmer about the tradeoffs between .NET and Win32 for client GUIs?

    I think a startup needs experienced team members to succeed. There is not much time for learning new skills, and not much money for buying support. When you talk about randomly hopping from embedded Linux to VxWorks to WinCE, I do not get the sense of a seasoned embedded developer. Each of these OS's brings its own set of tradeoffs, its own nightmarish traps, and its own steep learning curve. I'm far from an embedded expert, but I've looked over the shoulders of experts enough to make that observation.

    I think you need to work as a professional programmer for about 10 more years before you're ready for a startup.
  10. Re:He required support by Tim+C · · Score: 4, Insightful
    Does that 700 dollars include support? No it does not.

    Actually, yes it does:

    Depending on product and how it is purchased, you may be eligible for two support incidents at no-charge. These incidents apply to Full Packaged Products only and broadly speaking the following groups of products are covered - consumer products, desktop applications, desktop operating systems and developer tools.

    Also, while at $700 he wasn't talking about an MSDN subscription, were he to go with that instead the following would apply:

    No-charge Support Incidents as a Program Benefit or Microsoft License Type
    Click on the appropriate link to find out whether you are entitled to no-charge telephone or online support incidents if:

            * You have a Multi Year Open license or an Open Subscription licence
            * You are a member of the MSDN Programme
            * You are a member of TechNet Programme
            * You are a Microsoft Registered Partner
            * You are a member of the Microsoft Certified Partner Programme

    (Note that I can't be bothered to reconstruct the links)

    So no, you don't get as much support (I assume - I actually don't know what TrollTech's support is like), but it's incorrect to say that you don't get any, even if you just buy VS.NET. (And any company serious about developing with/for MS products ought to buy at least one MSDN subscription, if only for the support...)

    On top of that, community support resources for MS are at least as plentiful as those of the OSS community. Programmers working with MS tech are not fundamentally any different from those of us working with Java, or with OSS tools; we're all human, and most of us are more than happy to help out a fellow programmer in need from time to time.