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"FOSS Business Model Broken" — Former OSDL CEO
liraz writes "Stuart Cohen, former CEO of Open Source Development Labs, has written an op-ed on BusinessWeek claiming that the traditional open source business model, which relies solely on support and service revenue streams, is failing to meet the expectations of investors. He discusses the 'great paradox' of the FOSS business model, saying: 'For anyone who hasn't been paying attention to the software industry lately, I have some bad news. The open source business model is broken. Open source code is generally great code, not requiring much support. So open source companies that rely on support and service alone are not long for this world.' Cohen goes on to outline the beginnings of a business model that can work for FOSS going forward."
Do IBM sell software? No, they sell you a solution. They'll sell you Linux, AIX, Solaris (IBM is Sun's second-biggest seller after Sun themselves) or Windows.
Don't sell "software", sell "a solution to the customer's problem." This sounds cliched, but it's amazing how many people and companies work around actually doing so.
http://rocknerd.co.uk
how supposed "experts" can be so dumb.
support != hand holding.
All software has bugs. If your customer finds a bug in the software they can report it upstream and wait around for the bug to get fixed or they can report it to you and pay you to fix it now. That's support. Same goes for features. Maybe they want to use the software for something that upstream thinks is worthless. They could beg upstream to add the feature. Or they could hire developers to add the feature. Or they could outsource that to you. That's support.
How we know is more important than what we know.
Open Source development is an absolutely amazing and powerful tool... ...for everyone in the world whose livelihood comes from something *other* than selling software.
Bankers need to run their banks more efficiently so they get together to cooperatively develop some banking application software that makes them all work more effectively and efficiently. This is the magic of co-op software development. There are other people who have the same problems you do, and if you get together you can produce really useful software for vanishingly small cost, and the result can be replicated without limit or expense.
Bankers don't, on the other hand, create free, zero-income banks.
Commerceial software companies making free software is, and always has been, a really dumb idea.
If you find yourself in this position, my suggestion is to move up the food chain towards applications of the software you've developed. Eventually you'll find a level where people have problems they're willing to pay to have solved because they're not common enough to make an open source / co-op solution viable.
If your business plan reads:
1) Invent really cool new product.
2) Give it away for free.
3) Enable the community to do all their own support and enhancements.
4) ????
5) Profit!
let me save you some time and point out that there is nothing you can put in step 4 that leads to step 5.
Open source development is not a segment of the software indusrty, it's a segment of the every-other-industry.
G.
The model of investor expecting to make a quick buck off FOSS is broken. Not FOSS.
It isn't a broken business model. It isn't a business model.
Saying the open source business model is broken is like saying open source doesn't work as a cheese sauce. It also isn't a very effective screw driver. On the other hand, I have yet to hear a business model you can dance to.
--MarkusQ
As far as FOSS being something that has serious business problems in regarding to sustaining the developers who work on it, this is indeed a serious problem. It generally can be very hard to raise revenue with FOSS, projects can ask for donations and sell packaged versions, but you often end up with just a trickle with these sorts of things. Programmers should obviously be able to work full time developing software. With FOSS directly competing with commercial software an eroding those markets, could it be that programmers will end up waiting tables during the day just to support the time they spend writing code? fOSS does indeed wipe out commercial software markets and it can actuall
I am supportive of the freedom aspect of FOSS. For far too long commercial software has shut down innovation and stifled the development of improvements through cooperative development with its closed model. FOSS is on the other extreme, its an open model but it leaves programmers in a situation where they cant afford to live. Perhaps a solution for some projects lies in the middle, with a commercial source tiered licence system, where the source code is provided with all licences, the developers are receptive to improvements from customers, and the cost of software is set according to the ability of the customer to pay, a hobbyist who is using the software for fun would pay far less than someone using it in a high revenue business. This assures that the software does have a high degree of openness and accessibility to all, but also assures revenue can be raised to develop the software.
Stuart Cohen today is chief executive officer of the Open Source Development Labs. With more than 22 years of international sales and marketing experience, he is a seasoned technology industry executive and has served in a variety of executive roles. Most recently, Cohen was vice president and corporate officer at RadiSys Corporation where his responsibilities included strategic partnership development with other industry leaders including IBM, HP and Dell. Prior to RadiSys, Stuart was vice president of worldwide marketing and a corporate officer at InFocus Corporation. Stuart spent 17 years with IBM, where he held senior positions in the US sales & marketing division, and the IBM Personal Computer Company and Networking Division, with international business development responsibilities in Europe, Southeast Asia and China. Stuart holds a B.S. in Quantitative Business Analysis from Arizona State University.
LinuxWorld
So... a corporate marketdroid that never invented anything, never built a business, who coattailed himself into executive positions with minor players based on prior employment relationships with major players who has a B.S. in Quantitative Business Analysis. Who, coincidentally is trying to bridge free software and services in a for-pay model that's starving for attention?
I'm gonna go with... um... so they couldn't get an Enderle quote? Was Maureen O'Gara busy that day? How did this guy talk his way into OSDL? It's interesting that their Wikipedia page mentions him not at all.
Help stamp out iliturcy.
Don't sell "software", sell "a solution to the customer's problem." This sounds cliched, but it's amazing how many people and companies work around actually doing so.
Yeah, this guy seems to think the the 'support' model equates with the kind of technical support he might get on the phone at an 800-number.
In my business, anyway, the open source support I sell is really business support. Companies want to know how improve their business with software, and I can help them figure that out, and open source is most often the best answer. I usually save them a bunch of money, deliver a robust solution, and pay some bills by doing so.
Granted, that's not what most 'investors' are looking to do - they want to mass-produce support scripts for that 800 number and charge $40/call. But in my case, what people are really buying is my ~20 years of IT experience and knowledge and its application to cutting-edge technology, which can't get mass produced by the end of next quarter.
The broken business model is applying factory thinking to knowledge work.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)