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How Do You Make a Profit While Using Open Source?
rjst01 asks: "I work for a small company that sells an advanced engineering product targeted at a small niche. We have about 600 customers worldwide and our software is available in 3 languages, soon to be 4. My boss loves the idea of Open Source, and would very much like to release our software under an open source license. But, we're unable to find a working business model appropriate to such a small customer base, that won't result in us achieving anything other than destroying our revenue stream. The fact that our software is in an obscure language (think embedded programming) doesn't help. Can anyone suggest a business model that allows us to open source our software while continuing to make a profit?"
1. Don't spend money on software.
2. Collect revenue for your services.
3. ????
4. Profit!
http://alternatives.rzero.com/
They would seem to know.
Please, for the good of Humanity, vote Obama.
Sell support. If you want to sell your product per see, then you can't go Open Source. Why all the ideological bullshit about Open Source ? What kind of idea behind Open Source does your boss like ? The fact that he can get free programmers ? I doesn't work that way. Maybe you want a shared source license with your customers.
Er, you want us to come up with a business model for your business, when you can't do it yourself, and you expect us to do this without even knowing what it is you make?
2. Sell support contract for the price you were charging for the software, plus some.
3. Profit?
I'm serious, support is something you definetely can sell. Its a renewable resource!
-kcbanner
Obligatory blog plug: http://www.caseybanner.ca/
Liked when RH dropped it's personal edition and went strictly for business?
The problem of finding a business model which utilizes open source is presently confounding many companies, many of them very large ones. Open source is very, very useful at reducing the costs of doing business - it's not so clear-cut as to how it makes one money directly.
This question is somewhat incomplete. Why do you 'like' Open Source, and what motivates you to release your software? Unless we know that, there's no way to determine what sort of business model might be appropriate. What are you trying to get out of releasing it? Warm fuzzies? If so, then sorry, you're just going to be committing business suicide. If there are specific gains you're looking to make, then perhaps.
A hero is someone who knows when to run away. I am a hero. -Trent the Uncatchable
1)You say embedded programming. Are you selling the hardware as well? If so, the software is a vehicle to sell your hardware. You can easily make it open source and make money via hardware improvements. You may even make more this way, as you'll need less software development time (if people contribute back)
2)Sell feature prioritization. If you're really a small niche selling engineering equipment, chances are your users have very advanced needs. Offer to add features for a price. These features could either be exclusive (the user pays for you to develop it only for them) or inclusive (the user pays for it to be released globally) with sliding scales for each. This is on top of support and the usual open source models.
I still have more fans than freaks. WTF is wrong with you people?
Get bought out by google
Similes are like metaphors
If you're making money at the moment without selling support then congratulations, you're one of the few companies that do, don't rock the boat and keep doing exactly what you're doing now. Chances are you're fucked anyway, but at least the gravy train will last for a while. If, however, you're like 99% of companies out there and make your money from selling support, opening your source code will not change the bottom line one bit.
How we know is more important than what we know.
It just says you can't put restrictions on how they use it or the code.
Could someone make a Vorbcast of this?
Open source can work if customers are interested in financing features and 3rd party coders are interested in adding to the product. The idea being that you can usually make more money with a software product than from a software product and there are more parties interested in the development of the product. This advantage gets smaller if the market's smaller. Preventing vendor lock-in and ensuring the fate of your product isn't tied in with the fate of your company may be selling points.
So when the market's too small, the only business model I can think of is having a co-operation with your customers. Like your customers also having shares in your employer. The product isn't a core business and can be released as Free Software (speech, perhaps beer).
"I'm not much interested in interoperability. I want substitutability. I want to be able to throw your software out."
I work for a pizza company.
We have a company that handles all of our tech stuff for us. By tech stuff I mean the national call center that sends the orders to the store over the internet via VPN, and all of that good stuff. It's all running on Red Hat, and we pay them to help us train new people, set up new systems, and fix things when they break.
I don't know if that works for you, but it's one way that Open Source software is being used.
Most open source business models that I have seen to date focus on support contracts and maintenance contracts for profit. That is if a user of you open source product needs support or wants a specific enhancement that is not part of the current project then a support and maintenance contract is negotiated in order to place effort on those enhancement requests. There are benefits to going open source such as lowering the cost of development since an open community of developers can place effort into the project. However, there are side effects that you need to look out for. Such as there is no guarantee that the open community of developers will work on enhancements requested by paying customers. These enhancements require that a paid development staff focus on those profit based enhancements to ensure delivery. In addition, project management of an open source project can be difficult since most poject managers are not typically trained to handle the management of open source projects. I suppose the point I am trying to make is that like any business model, your revenue streams needs to be identified and allocated appropriately to ensure the success of your business. Open source is always an option but the ramifications of making your source code public should be considered carefully to ensure that it supports your current business model and/or can help refine or mature your business model into a more profitable one.
kha0z
Master of ImportChaos.com
I'm not sure it's such a good idea to endanger your business's only revenue stream. How about you keep the source closed, but make sure the support you offer is excellent (i.e. implementation of new features on request, being responsive to bug reports and actually fix bugs for customers who have already paid, porting to new architectures when there's demand)? Also, have your customers actually asked for the source code?
You have to consider whether switching to a free-code/pay-for-support business model would actually be a good idea. Is the business as it is now growing or declining? Is your product a cash cow or is it becoming obsolete, unable to bring in the big bucks in the near future?
If you catch and sell fish, it's good for business to give away some fish now and then, but a bad idea to give away your fishery (except in 2048, when it'll just be a liability).
(Boy, I wonder how this will get modded. Disclaimer: I am actually pro-open source, and use Linux almost exclusively, and I've hardly ever touched atrocities like MSIE and XP.)
I suffer from attention surplus disorder.
The open source model was developed primarily as a way to write good software. I think in most cases it does that well, but you have to remember that there isn't always a business case for it.
I am not a CEO/MBA/any other business-oriented TLA, but I see three areas where the Open Source model can be a viable business case:
You have a lot of customers who pay for support - this seems to be the most touted business model. Give the software away for free, then sell support for it. This generally requires a pretty large user base to profit from though, because you have to make enough from support to cover the cost of developing the software.
You have customers with very specialized needs - this is basically the consulting model. You can use an open platform as a springboard for building custom solutions for your clients. This generally works well when you have large clients who can afford consulting fees, and it works best for things with a very large scope.
You Open Source the Product to buy Goodwill - basically if you have some software that isn't a huge source of income, you can make a business case for open sourcing it as a way to get good will from the community. Good will counts for a lot, but it can't replace your primary revenue stream.
From what you describe, your product doesn't really fit into any of these main categories. This doesn't mean that you can't make money by open sourcing your project, but the odds are probably stacked against you. If your company is interested in open source, you may consider looking at building porting your application to sit on top of a completely open stack of software.
I know a lot of people on slashdot tout open source as a magic bullet to solve business problems, but in the long run it's only going to give open source a bad name if people aren't honest about when it is a good solution, and when it isn't.
Famous Last Words: "hmm...wikipedia says it's edible"
Pretend in every way that the software is not open source and people will start see no difference, except perhaps that the open source quality is higher... which is debatable...
Don't obfuscate the product with geeky crap like, "this program is a java program that is thread safe." No one cares unless they're a developer and even still you'd be lucky if they cared. Keep it simple. Say what the product does and why it's good at it (as in design, not ideology!) and let it speak for itself.
Just because it's open source doesn't mean you should be given a medal and a paycheck...
Reality is nothing but a collective hunch.
The benefit of open source is having a community of developers who will improve on the product. If you have a small user base then you may not have that community of developers. The result is that you have given your product away for free, you can't afford to improve it and nobody else steps up to the plate. It's a lose-lose situation.
Even ESR admits that there are situations where open source makes no sense. Yours sounds like one of them.
Much like Mandrake (almost went bankrupt) or RH (who dropped it's personal edition and went strictly business.) Yeah! They know. Or Linuxcare (levanta), or Wal-mart Linux PCs.
Focus on your bussiness and not the software you use to achieve your results. If your bussiness is developing software then focus on what your customers want and where the market is with demand.
Software should not be on your mind as much as other expenses and equipment needed to do your job. No magical software will create your bussiness model.
http://saveie6.com/
Thats literally just it. How do you make money from a web site? I mean, the client has all the source, and can do whatever with them, no? (well, copyrights and all, but its still open source, and you sold it to them, so...). Its a bit like that.
Best case is probably an ERP system. Often with those, especialy for smaller companies, there isn't a very easy way to install them or configure them (which is where small ERP ISVs get their money). So even if its open source, who cares, they don't do anything with it. But the benifit is still there (if you go under, your customer isn't screwed).
Its pretty much the best of both worlds. Any business based mostly on services can do fine with open source. When the software -itself- is the product, you start having issues.
There is a company in Sweden that does Open Source haptics, sensegraphics they occupy a niche but open source their API. This has allowed them to become a base for others to develop software on around the world. They make their money from creating products on top of the API for others.
It can be done, but if you guys make more from selling your product it may not be worthwhile.
Open Source is great, but it isn't the answer to every problem.
hehe, well done guys.
How we know is more important than what we know.
You don't. ;)
1) Develop awesome code (this can be hard so I recommend you buy some other companies awesome code).
2) Patent awesome code
3) Cross-license awesome code with IBM and allow IBM to include the code in Linux
4) Sue IBM and the Linux Pirates for infringing your copyright and patents.
Now what may happen here is that IBM might tell you that it's not really your code in Linux, this is obviously akin to the Chewbacca Defense. You must immediately then subpoena IBM for every line of code they ever wrote. IBM will likely attempt the same from you as a stalling tactic, well you can show them who's boss. Don't front up with any of your code! Eventually IBM will capitulate and you will become incredibly wealthy.
Hugs and Kisses,
D McB.
I am government man, come from the government. The government has sent me. -- G.I.R.
``How Do You Make a Profit While Using Open Source?''
Simple. I run my company on open source software. The software costs me no money. The services I sell bring in money. Profit!
As for making a profit from _writing_ open source software; that's a little harder. I could see the software being a loss leader for selling other things, like manuals or support contracts.
If you want to make a profit purely on writing the software itself, you will have to find one or more parties who are willing to pay for development and accept that the code they paid for may be used by others. Given that the others might contribute improvements, this may actually be an advantage, so you may be able to find such parties.
Please correct me if I got my facts wrong.
Presumably you have identified benefits to going open-source - like perhaps more widespread access by people likely to pay once they get a professional job.
Regardless, of the reasons you want to go open-source the key thing to remember is that once you release it, you do not control it. So, you gotta paid before you release it while you can still control it.
This AC's opinion is that a subscription model is a very good approach. It also has the side benefit of being something you can start moving the customers to before you go open.
Start off selling a support subscription that includes all updates, all of them, not just point-releases, but everything new that you release the customers with a subscription will get 'free.' If you are able to transition your revenue base to this model, you can then take the next step of opening up your development costs - solicit your customers for the features they want in the next version and then put a price-tag on them.
Tell them that for feature A you will have to take in $X in subscription revenues -- feature B will cost $Y in subscription revenues, etc. Obviously you will have to figure out those numbers and give yourself lots of margin because if you underestimate you are on the hook for the money and going back for more is hard, not impossible if you have slick salesguys, but not easy.
It is at this point that you can sweeten the pot and tell the customers that after you've done some number of the subscription-paid feature enhancements and are comfortable with the financial model, you will release full source (use the GPL, it will keep anyone else from taking your work as a base adding their own proprietary stuff and then 'closing' it).
In theory, at this point you will have transitioned to a fully Free business model with a previously tested revenue plan.
Of course the devil is in the details, but this is slashdot, you only get so much for free as in beer.
I saw Ethan Galstad talk about his experiences with quitting his day job to run Nagios development. He was an incredible speaker, very motivational. I tried to convince him to write a book about it, actually. He seemed very approachable, so I would just email him your specific questions.
Education is the silver bullet.
If you catch and sell fish, it's good for business to give away some fish now and then, but a bad idea to give away your fishery (except in 2048, when it'll just be a liability).
It's better to reduce your catch now so you will have fish to catch in 2048. A few months ago I read an article on how some chefs are experiementing with jellyfish and others to create new dishes.
FalconShould there be a Law?
yes, I did. I clicked the "parent" link to my replies and I got an invalid URL leading to post 2^24-1. Silly Slashdot, using 24-bit data! And yes, I know you'll be the only one to read this.
Please, for the good of Humanity, vote Obama.
No, it's not still open-source. Open source doesn't just mean access to the source code..
Bogtha Bogtha Bogtha
how to make money with open source tools
follow analogy
tool=hammer
business choices (2 total)
1)sell hammers at flea market next to lebenty leben other tool tables/alternate, offer to give away hammer and come in and polish it up for customers once in awhile
or
2)use hammer to build houses
your choice
if it was me, I would go for option 2
wait..it was me, that is why I am answering the question this way. I invented a tool once, well, designed it, a radical improvement of an existing sort-of almost worked tool, with a twist. I took the idea to a machine shop, had a few dozen built (all I could afford). I then sold most of them,quickly, because it filled a niche in a niche market. I *also* used the tool, along with my other tools, in the business I was in at the time, because that is how I got the idea in the first place, I needed something that did what that tool did.
I never patented it, no design patent, nothing, and I know for a fact there are a lot of variants out that out there in the world now, I have seen them. I made a LOT of money with that tool, *using* that tool, for years. I only made a very, very small amount of money relatively speaking on the first and only run I had built, because I just wanted my costs back and to own a few free and clear, I liked doing the real work with the tools much better, and I could care less how many other people use that tool, I was happy to do it. I know a lot of my fellow niche industry workers appreciated it, too. Payment enough for building the tool methinks, got costs back, then some, then made a lot more using it, plus a lot of good vibes and cred. Enough, good enough?
PyMOL has an Open Source tool, but the manual is not really free for use, although it's browseable online. Where I work, they wanted to use the software, and I realized that we really couldn't quite do it legally without buying a subscription, which I told the money people, and they ante'd up. This is a pretty good model--you want the stuff to be free for the people who can't pay, and there to be just enough legal nip to cause those who can pay to decide that it's more reasonable to do so. http://pymol.sourceforge.net/
"Not an actor, but he plays one on TV."
one thing that you can pin this on is WHY YOUR COMPANY?
If you offer a solution that somebody can take a pair of pliers/screw driver and pull your competiters module and just drop yours in
it doesn't matter that you have the source out there.
Downtime costs money what your customer doesn't spend/lose can be spent on your products
Any person using FTFY or editing my postings agrees to a US$50.00 charge
Free Software is orthogonal. It is the idea that every customer should receive a set of basic freedoms (such as the ability to modify the code, and to distribute derived works). This is good for customers, since if you go bust, they can hire someone to keep developing your code.
The real difference between the two is that the source code and rights for an Open Source application are generally distributed (to encourage more people to contribute) while a Free Software application only has these rights distributed to your customers (who may then distribute them to the world at large, but then they do it, not you).
From your perspective, making your product Open Source has the benefit of (potentially) giving you a bigger development community. The cost is that it makes it easier for your competitors to fork your code and make a competing product. The way to avoid this is to ensure that your developers know the code inside out and so your product will be better than a fork (and, thus, your support contracts will be more valuable). It would probably be a good idea to make your developers sign a non-compete clause so they can't go and keep developing the software for someone else.
Free Software is different. You give your customers more freedoms, but don't (as) actively encourage them to contribute changes back. This is almost certainly good for customers of an embedded software supplier, since it makes it easier for your customers to customise your software. The benefits would be that you could advertise easier-to-comply-with software licensing and ease of customisation. You would make money as you always did, as well as by selling your services for customisation ('support'). Customers would continue to use your services for customisation since you could have more experience with the code-base than anyone else, but you could sell a freedom from vendor lock-in as an advantage.
I am TheRaven on Soylent News
Correct. I wasn't talking about Open source, I meant open source. Basicaly, even though its not an "Open Source approved license", your customer has the source, and they can do what the hell they want with it.
So from a business point of view, it has very similar drawbacks: unless you restricted things in the contract, your client can turn around, tell you to f*** off, and hire someone else to work with the code, resell it, whatever. So the business model will have to account for similar potential issues.
Thats what I meant.
Q: Is open source unprofitable?
A: It is if you're doing it right.
Open Source does not mean Free or free. You can release the source to your customers without giving your customers the right to redistribute it or their changes.
Your customers could benefit from this because they could make any customizations they want to the program -- which may not be possible with your competitor's product -- and because if there is a bug in your program which they must have fixed right away and they have the ability they might be able to fix it themselves faster than you would fix it.
You benefit because your customers might give you that bug fix so you'll incorporate it in new releases, and you'll have a competitive advantage over other vendors who don't release the source code.
If your customers redistribute the code, it is piracy, just like if they redistributed the compiled program.
OK, so your boss has heard the phase "Open Source" and wants to get in on the new movement. This sounds like a really bad way to run a business - on the latest fad.
Actually, what you are describing, as others have pointed out, doesn't sound like a very good fit. Probably the best way to make a profit from Open Source is to have the software be so incredibly arcane and poorly written that it is utterly unreadable to anyone that hasn't spent months tracing through it. Then it will be obvious to even an experienced programmer that they do not have the time to understand the code and have to pay someone else to fix even minor bugs. If the software is something that is critical to a business and is missing features or has obvious bugs this is even better, because the need for outside support will be obvious to anyone.
If you are instead starting with a well-written, well-documented software package that requires very little in the way of support you aren't going to make any money at all selling support to your customers - they already know the software works and doesn't have the kind of problems they would need to spend lots of money on support to have someone on tap to resolve.
I've thought a lot about this topic and I have not been able to find a working business model compatible with open source where there has been a significant loss lead. If you have already spent a lot of money (i.e. more than say $20,000) it might be difficult to recoup that expense. Most free software business models have you getting paid for the work that you do, so once you get significantly in the hole it's tough to dig yourself out. Your profit margin on the new work (whatever it is you do) will be too small.
Indeed, I've come to believe that picking a project and then thinking "how can I make money off this" is pretty much a bad way to start a paying free software project. Instead find out what people will pay for and do that. Keep expanding as you find more things that people will pay for. Eventually you might be making enough profit (in absolute sense, not margin) to do some loss leads to find new business. But I definitely wouldn't start out that way.
Strangely, I once worked on a project where my boss liked the idea of open sourcing the code. But he couldn't find a way to make money on it. It was even stranger that customers of the product kept asking to pay him to customize the software, but he wouldn't do it. "We aren't in the custom software development business", he would say.
The moral of the story is, with free software you are at the will of your customer. You do whatever it is they are willing to pay for. You don't do what you want to do and then try to find a way to sell it.
I don't know if this is possible to do both things at the same time.
But you can use Open Source Software during the days, and prostitute yourself at nights.
There is another way of making big profit by selling pirated copies of Windows XP while using an Open Source Operating System at home.
I wish to address some implicit issues based on my inference that your boss went to school for his MBMA (management by magazine article).
The recognized expert for businesses run with philosophies similar to your boss's is a brilliant business writer named Scott Adams. He has compiled thousands of case studies from the highly successful engagements of Dogbert Consulting. I think that these case studies would be highly instructive for your boss. If you're worried that perhaps your boss would be uncomfortable using case studies from a book of cartoons, you could simply cut and paste the cartoons from one of Mr. Adams's books and place a cover from Harvard Business Review on them. Trust me; it will sell.
Although some conservative businesses would actually prefer the painstaking approach of building true relationships with their customers (as well as prospects) and
No, no; nothing to do with politics or current events. No; this important third issue is for you personally. You should have ample time to see the train wreck coming, and this is simply my personal advice to you, before the trains actually collide.
42
It worked for AMD. When the Opterons came out, which were the true "bread and butter" that finally put them into the black, Microsoft (in deference to Intel) delayed their 64-bit version of Windows for a loooooong time. When the chips were introduced, the only OS that provided 64-bit support and the high-quality NUMA support that really let them shine was Linux, and Linux carried the Opteron for a year or two.
steve
Oh, you're not stuck, you're just unable to let go of the onion rings.
Talk to these these guys.
They lost $12,000,000 2006 3Q. They lost $10,000,000 same time last year. They're bleeding money very fast now. The only reason they can survive is because they sold stock. Trolltech is doing very badly, financially speaking.
- Apple has been very successful at combining open source and proprietary software: they use the community to build the commodity support. For instance WebKit is largely KHTML, but people who use Safari don't know and don't care. Apple concentrates on making the software easy to use for the end user.
- Trolltech, MySQL, Artifex etc have been very successful at building a base of customers (programmers) with their open sourced products. They realize that end user software cannot easily be sold as open source, so their business model charges money for a non GPL license. They also get free bug fixes
- Xara have (kinda) open sourced Xara Xtreme (minus their rendering libraries). They are hoping to attract a community of programmers to port their tools to Linux and Mac, something they could not afford to do themselves
- Cygnus and Code Sourcery are funded by contracts to extend the gnu compiler suite for a particular processor.
- Hardware vendors (IBM, Intel, etc) donate programmers to open source projects because it sells hardware
- Google funds projects such as Mozilla: a Microsoft monopoly is dangerous to its business model
Notice that in all these cases, Open Source / Free Software benefits the company's business model. I don't see much benefit for companies making end-user products. A well designed program will not need much documentation, training, consulting or support. I do however see value in releasing the software as open-source when it has to be discontinued.So why not try the scam that Travis Oliphant at the numpy project has tried to pawn off...write free sotware, but sell the documentation. No man page = $$$!
beg for donations
Look at their stock chart. Ticker symbol LNUX, no less.
But then it would not be open source.
Sigh. The term "free software" was a bit problematic, because people confused it with "gratis" software. So a bunch of well-intending players who *sold* free software, centered around Cygnus, sat together and invented a new term, with a precise definition: "open source".
It worked well the first couple of years, and the new term became very popular. So popular that people started hearing the term in the popular media, and started inventing their own definition. Such as "source is available". So now it is as imprecise as "free software".
Open Source was defined to mean that you have the right to inspect, modify and redistribute the source code. Basically the same as the FSF definition of free software, the difference was mostly philosophical.
PS: Some people even claim that "open source" has been been used to describe software before the Cygnus meeting. However, no record of such a prior use can be found on the Usenet archives, and nobody have been able to point to other earlier evidence of such a use.
Open Source does not merely mean that you give the customer access to the source code.
Open Source has a clear technical definition that includes the right to re-distribute.
Check out www.opensource.org.
The way to survive as a free software developer on a vertical market is to only write the code people pay you to write. Don't write the code, publish it as free software, and expect to be paid for it later.
It is a mindset question, you aren't getting paid for your code anymore, you are getting paid for your work. So don't work unless you get paid.
Lots of companies are garnering interest in their software by having an open source tier and then a tier with more features in it that costs money. This increases interest and customer base size at the low end, possible eating into some low-end sales, but appears to be creating more high end customers to offset that loss for the vendors who are doing it.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
http://www.linuxjournal.com/node/1000119
Volume.
We bought machines from a vendor along with the OS and we were doing pretty low-level stuff on them. We needed the source to understand some of the functionality since the vendor's documentation/people were not quite adequate. They told us that they could sell us the source code for extra money. We could have bought it if our product would make enough money to justify it but we didn't.
So, there you go. A business plan with both "open source" and "money" in it! :) Honestly, opening up the source will not let you find more developers. If your product needs expertise in a narrow field (read: worth money), then there won't be many developers interested in it. How many community developers are working on OpenOffice? Mozilla? (These products need 'expertise' due to the huge codebase.)
I don't agree with the "sell support" crowd at all. Why sell only support when you can sell both support AND the software? Open source is great for basics like kernel, tools, document handlers but money-makers can just as well stay closed source. No sense in making a, say, free banking system.
First of all, I don't see how a person could want a good example (meaning advise) as long as that person is ruled by a boss. A person should not have a boss. Instead a person should, if possible, allow somebody to pay you to 'do want you want to do' because he or she wants to see what you do: take 'donations' (meaning payment for your work really).
O.k. if a person can attempt that first, the person should also 'be able' to and 'optionally offer' (person's choice) his or her own resource (meaning a creation made by that person) to another, who will use (note* the person accepting the resource should not modify it unless personally wanted and it is designed to be optionally modified; the person accepting the resource should mandatorily modify it if it is designed to be modified) it to do something wanted personally, because the person able to offer wants to see what another will do.
Note* I am not saying "you should" (instead saying "a person should" because I'm only attempting to set an ideal example. A person has to make his or her own decisions.
Too many people (especially on /.) seem to think that Open Source means that your source code is available for all the world to share. Those people need to go re-read the GPL, which says that you must give your source to anyone to whom you sell your binaries. I've spent years re-selling the same OSS software to clients. The OSS license that I use says that they and I can do anything we want with the source code; I resell it to my next client, they stick it in a vault in case I can't or won't assist with future patches/enhancements. If they wanted to re-sell it, they could, but they aren't software companies. If they wanted to post it somewhere, they could, but they see no economic value to that.
Nothing for 6-digit uids?
Open source is good to get new ideas into the software, and get them implemented quickly. Open source is also good for competitors to easily copy your code and turn it into something better than you already have - give it another name and offer it to your customers. Support is a great way of making money from your software, but making it open source can lead to other companies being able to offer support also. Conclusion: Open source is for very small operators who feel as though they are doing the world a service, and are humbled by offering something to the community for virtually no financial recumbrance. Or by large institutions who feel they have made far too much money, and want to give something back.
Read "Red Hat: the mother of all business models": http://weblog.infoworld.com/openresource/archives/ 2006/01/red_hat_the_mot.html
Nothing for 6-digit uids?
In one sentence: The answer depends on your market size.
Our situation is similar. We're going for open/closed-source mix now. Let me explain:
We've started as a 100% open-source company in a very small specialized market (translation agencies, ~5,000 companies worldwide), and found that it didn't work out. We didn't just earn enough money with services because few customers were willing to pay for services, and those who paid were small & cheap. So we had to develop some closed-source "extension modules" that we sell on top of the open-source stuff. This license/service mix provides us with the money that we need for the small market. I firmly believe that you can't survive with "pure" open-source in a vertial market.
However, we're now going for a more "horizontal" market, with considerably more and bigger customers. Here dynamics are different. Basicly, we see that the big guys are sponsoring the development for the smaller (cheap) guys, while the mass of the small companies provide us with the credibility (and bug reports...) to sell to the big guys. So here it pays for us to be more open-source. We'll still keep some large-corp modules closed-source in areas such as compliance, accounting etc. The small guys don't need that stuff, and it would be stupid not to take the money...
Cheers,
Frank
http://www.project-open.org/
Something to consider: Open-source your product and transition your company to be a consulting firm that specializes in working with your software.
When will such an approach be valuable? If the value of your software is incredibly low, but the value of the effort that goes into modifying it is high. You then make money by being the expert in a nitche field of modifying your software.
The risk is that your customers could hire your employees away, thus destroying your company, but providing employment for its employees.
I should state that I have very little knowledge of your product and its value.
No, I will not work for your startup
Everything is not a match for giving away free. If you cant find a buisiness model to support it, seems you fall in to the 'it doenst make sence' category.
---- Booth was a patriot ----
You don't think LAMP can handle the load of a porn site??? ;)
It could also be a big loss -- at least, if all the video card vendors are right. They seem to think that by distributing the source to their drivers they'll reveal all their proprietary secrets even though hardware secrets are best protected by patents (unless they're hiding the fact they're already stealing somebody else's patented ideas). Of course, their players in that market are all sophisticated enough to reverse engineer the cards anyway.
It's different if you sell software to support someone else's hardware. Successful open sourcing depends on your license. Under GPL or another "pure" license, your business model shifts from software+support to support only. Of course, you could release the source under tighter terms, maybe even a signed DNA, so that customers get the source and can alter it to their hearts' content, but can only share it with other licensed customers. That way you can create a community but (theoretically) lock out outsiders. That may be a tougher sell, but it's a perfectly normal, decades old business practice that has enriched customers and vendors alike. The source itself is the lure.
This is not my sandwich.
Ask Stallman the Pig (Programmer In Genius), rather than posting it here.