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Open Source Software Licenses Versus Business Models
dp619 writes "Network World is running a guest article by Outercurve Foundation's technical director Stephen Walli discussing how FOSS license choice can affect a company's business model. Walli disagrees that a FOSS license dictates the business model or that the business model dictates the license."
If you look at the businesses that have succeeded using FOSS every. single. one. has used one of the "blessed three" business models, selling support, selling hardware, holding out a tin cup.
This is why for example no matter how many game engines are given to the FOSS community you will NEVER see a great single player masterpiece like Bioshock come from the FOSS community, because games do not fall under the blessed three and therefor they simply can't get enough funding to keep the doors open. This is also why we'll see Canonical close their doors in 3 years or less, they have already moved to the tin cup model after trying both support (Ubuntu One, Ubuntu Server) and selling hardware (Ubuntu TV, Ubuntu Tablet) but desktop OSes don't fit under the blessed three so they simply don't have a chance.
This isn't saying that FOSS can't be successful, look at Red Hat, but your business needs to fall under the blessed three to succeed. The reason why is obvious, if anybody can make infinite copies and give them away you simply have to have some other way of making money. Personally I think there needs to be a subset of GPL with no redistribution clause so we can get things like games and software for home users that don't fit under the blessed three as without the redistribution clause the "printer story" that gave birth to the GPL would still be solved, but its so ingrained now I doubt you could ever get it to take off. So in the end stick to the blessed three if you are going FOSS or you'll end up like Xandros, Linspire, Mandriva, Loki, and soon Canonical.
ACs don't waste your time replying, your posts are never seen by me.
If you look at the businesses that have succeeded using FOSS every. single. one. has used one of the "blessed three" business models, selling support, selling hardware, holding out a tin cup.
Google.
So is there a 4th model - selling targeted advertising? Or is this just selling support where the customer is an advertiser rather than a user?
The "blessed three" also applies to movies, music, and somewhat to books.
"Open Source Software Licenses Virus Business Models"
Table-ized A.I.
But seriously, I always think "didn't open source cause software engineers and developers" to live a poor or at least not so good life?
I have developed software for 28 years (freelance, my small company, as an employee of another company) . I have created hundreds of small and sometimes large software, been team member of huge projects (core banking), created websites with millions of members ...
After 4x years of life, with a recent PhD I am living a miserable life (compared to my friends which work in construction and civil engineering, medical fields etc.).
I have always been abused by clients who compared my prices with free software, those who threatened to use open source free alternatives, those who thought software should not be expensive if not free, and those who thought a 100MB software can be stored on a single $0.1 CD and is nothing and last but not least relatives who thought installing windows and other software on their PC is a small favor (as if my time is free like free open source).
We software people did it to ourselves. Professionals in other fields never did that. No civil engineer or architect would design building for you for free.
When I do "favors" like install windows etc, my rule of thumb is they are there next to me... using as much of their time as mine.
Michael J. Ryan - tracker1.info
Guess what? If you go to an architect, he designs a new house for you. He doesn't just give you another copy of the house plan he designed five years ago. That's what you pay him for.
The Tao of math: The numbers you can count are not the real numbers.
Perhaps you should try selling service or support on top of free software, instead of re-inventing the wheel each time?
"Open Source" is often called "Open Sores" for a reason.
-I only code in BASIC.-
It scares me that we even need to have this discussion.
Help stamp out iliturcy.
Business CEO's are Gay, 99.9%.
For some reason I get the feeling that this AC is talking out of first-hand experience here!
After 4x years of life, with a recent PhD I am living a miserable life
You're doing it wrong.
Linux IT pros in US saw a giant salary leap in 2012
IT professionals enjoyed their biggest salary jump in more than a decade last year, but for those using Linux, it was even better.
Following up on its January 2012 study that found tech salaries had finally started to climb again, IT careers site Dice today published an annual update showing not just a continuing trend in that respect, but also a huge boost for those in the Linux field.
http://www.computerworlduk.com/news/careers/3422018/us-linux-it-pros-saw-giant-salary-leap-in-2012/
"I've got more toys than Teruhisa Kitahara."
Does your research show why the general public supports all this "gayness" over whatever "otherness" you feel they should be supporting?
Time is what keeps everything from happening all at once.
You are both correct and incorrect. I have a couple of friends who are architects. The reuse major structural elements, design elements etc.. They also come up with new stuff, so yes and no.
Hey KID! Yeah you, get the fuck off my lawn!
Actually that depnds on how much you pay, most residential "architects" take an off the shelf plan and tweak the bits and pieces you dont' like or change it around a bit to fit the shape of the lot.
No. This is the IBM model. The IBM model is that they give you the software, but charge to customize it for you. They sell hourly service. Software becomes like driving a taxi or doing corporate taxes.
The Microsoft / Apple model is that you charge for the software, and charge for the device. The service is a mix of free and pay depending on how you handle it. There is no reason you can't charge for the software instead of giving it away.
You are absolutely correct that Software Engineering is the only discipline where the engineers are constantly trying to devalue their ability to sell product, and instead hand it away for free hoping for a short-term service contract to follow it. I would much do what Notch did with Mincecraft and sell 5M units in the first year, than give away Mincecraft and hope someone wants to hire me to customize it.
Let's look at Valve on Steam - how many of their offerings are open source? Zero. That is because Valve is about making money, not making free software. Sure you can charge for copies of FOSS, but it only takes one party to either make it easy to get.
It all comes down to this: do you want to design and sell Widgets to the market, and make money on units sold, OR do you want to use your individual hours working as a service-oriented wage slave?
There is only ONE of you, but there are millions waiting for Widgets. You do the math.
Architects make a lot of money on selling their pre-made plans. Each copy must be licensed to build, they get a fee every time. Architects also do custom hourly work. In that respect, they both sell product and are service slaves.
There is only ONE of you to provide service, but millions of copies of your product to sell.
Hourly wage service is for waiters and taxi drivers.
Selling units works well in the short term, and you can make huge profits on something that costs nothing per additional unit to produce.
On the other hand, once purchased they have no further need for you, and unlike physical goods, software does not wear out or become damaged over time, you can always install a new pristine copy from your original media. You can try selling upgrades which offer new functionality, but sooner or later the users will have all the functionality they need and won't want your upgrades.
Software will gradually become commoditised, market by market until its impossible to sell anything. On the other hand, companies and end users will always want customisations and support, be willing to pay for them but unable to perform those functions themselves.
If anything, the model of off-the-shelf software is very bad for business, i have seen countless businesses which adapt their business practices to revolve around how the software they bought does thing. It should be the other way round, software should compliment the way *your* business runs, not force it to conform with what a developer half way round the world thinks a business should do.
Steam doesn't really come into it because all of their software is for entertainment, an entirely luxury service that noone depends on and which inherently does become "worn" as you complete the game and become bored of it.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Others have mentioned google. There is yet another model. Having customers pay for features to be developed and implemented is one that for instance PowerDNS uses. The sixth model is using a "free" version that is essentially the same as the paid version, minus a few features. Wine is the free version of a commercial product, Atlassian sells most if not all of their products this way, or as a hybrid where you pay almost nothing for a small number of users but only start paying once you outgrow the limited user license. MySQL used to work this way, I'm sure there are plenty of others as well.
Evidently, there are still creative ways to make money out of FOSS if it's your business to be making it. They may not be used by the (vast) majority of companies in this business, but they do exist and have proven to be successful.
I was promised a flying car. Where is my flying car?
I am a bigger supporter to open specification over open source.
Open specs solves many of the problems open source does, while it allows more business models to operate.
Source code isn't that big of a deal compared to good specifications
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
This is why Apple have placed themselves as the gatekeeper to installing software in iOS and Microsoft is heading that way with Windows 8. Want to install software? We get a cut. We also get to tell you what you can and can't install.
It depends what you want to do. If you have an existing program and you want to extend it or fix a bug but the original developer isn't interested, open specifications are useless compared to the source code.
You said open specifications "allows more business models to operate" (as though you can have open source but closed specifications). Imagine if the Linux kernel was closed source. What more business models can operate exactly in comparison to it being open source?
The examples in the article are pieces of software that are distributed in the hundreds of millions of copies. Things might look different if you produce software that is even slightly specialized. It's no cheaper to make special-purpose software, but your customer base shrinks exponentially with the degree of specialization.
Google was selling ads way before they got involved in any FOSS. Ads on the internet is their business. Gmail, maps, and Android are interchangeable methods. The business model is to put ads on internet SaS.
What Google shows is that FOSS can be effectively used, and even developed, by companies that have business models unrelated to FOSS. Similarly, a grocery store might increase sales by 1% by oferring delivery. They'd still be in the grocery business, not the transportation business.
..and contractors.
Won't somebody think of those poor, poor contractors? Some of them can't even afford a third BMW!
Perhaps you should try selling service or support on top of free software
How should a developer of, say, non-MMO video games "try selling service or support on top of" the game?
No true Scotsman...
If you just spout the name of a fallacy without showing how the fallacy makes the argument invalid, that's the "fallacy fallacy".
But back to the topic: "selling support, selling hardware, holding out a tin cup." In this case, "support" is the operation of Google Play and the other services that the Gapps depend on, so that manufacturers and carriers don't have to spend money on their own such services.
Friends don't let friends use Windows.
When friends ask me for help with Windows, I install Linux.
I don't read your sig. Why are you reading mine?
This is why Apple have placed themselves as the gatekeeper to installing software in iOS and Microsoft is heading that way with Windows 8. Want to install software? We get a cut. We also get to tell you what you can and can't install.
Kind of. What they are doing is giving you a platform for up-selling. It's the model Apple has been using since iTunes, and continued with iPhone, iPad, and is also used by Google, Amazon, and Barnes and Noble. Some of them even sell the platform at a loss expecting future revenues from their integrated "store". They can sell their own apps, or get a cut from other developers' apps. They can create free apps that are missing some specific functionality that is only included in another paid app.
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
Yeah a 4% raise followed by a 6% increase in medical extortion er I mean insurance.
Oh how I love right-wing lies... Thanks to Obamacare, United Healthcare gave out refunds to members last year and dropped premiums.
But you certainly wouldn't want to use facts to support your propaganda party, right?
Dude, this isn't twitter. There is no need for a shortened URL and there's no way I'm surfing to your goatse page. Yes, when a slashdotter sees a shortened URL he's smart enough not to click it. Aopparently you're not.
> Let's look at Valve on Steam - how many of their offerings are open source? Zero.
Actually, they have all the open source games from the humble indie bundles there.
If you think that CentOS is bad, Oracle is even more predatory. Even while they ended OpenSolaris and are now said to be in the process of either closing or dropping MySQL (which is why we had that story about Debian or Red Hat looking @ MariaDB), they had no qualms about taking RHEL and rebranding it. What's worse - they are guilty of exactly what the DoJ accused Microsoft of in their anti-trust case - Oracle uses its clout in databases and application software to make customers who use those on RHEL to switch to OEL. How many times have you seen people here comment that they use OEL so that there is only 'one throat to choke' if things don't work, and that Oracle wouldn't be able to do any fingerpointing exercises? This one is Red Hat being raped from both ends - front & back.
Honestly, I think at some point, RedHat should do a product w/ FBSD or one of the others, and slowly start de-emphasizing their Linux. Then they should include it in a license similar to the one you described - BSD but banning re-distribution, and also, providing the source only to paying customers. That way, they won't have to jump through hoops to stay far ahead of their competition, and what's more, Oracle and CentOS would be forced to invest their own engineering in this (let's see whether Oracle is willing to put some of their Solaris resources into an OS that they leech off their competitor). Like Apple, Red Hat too could then work w/ the BSD people in incorporating some of their changes back into the trunk, while seeing to it that the only people who get their OS are their customers, and not those of their competitors. Same suggestion goes for Canonical - assuming that Mark Shuttleworth isn't already sick of the whole OS biz that he got into. Google is on the right track - taking only the Linux kernel (GPL 2) but putting a totally non GNU userland on top of it, so that they get to determine the redistribution rights of the whole thing. Let's see how far the FSF can counter w/ Replicant.
This is not totally correct. Over time, more bugs are discovered in software, so if one tried doing a fresh install, one would do well to do an instant online update as well.
But more than that, there is also the question of the total cost of producing the software - the person-hours needed to create, test and ultimately release it to market. Whenever marketing or business development do their ROI analysis on that, they have to justify doing it to management. If the software costs, say, $100M to produce, then the company has to recoup a certain multiple of that in order to justify creating it in the first place. If it can't, it's really stupid if it chose to go ahead and do it.
So, when calculating the returns, they have to look at what the estimated market size is - will they be selling it to just one guy for $100M, or 1000 guys for $100k or 1M guys for $10k or 1B guys for $10? Yeah, the cost of reproducing it may be $0.10, but that's not the point here. Does the company/organization/person recoup the cost of having developed it after it is sold? If not, then doing it was a mistake in the first place.
So it's not that it costs a company $0.10 to replicate the software. It's that the company won't recoup its overall costs if it 'liberated' the software, as per the whims of RMS and the FSF leeches, whose goals are specifically not to produce good software, just 'free' software (producing good software is a goal of OSI, which is why it's more willing to listen to software developers and endorse licenses that the FSF would normally frown on). Those who use the software may think that any company that charges them for the software is looting them, but when the companies ability to recover its costs are crippled, chances are that they won't be getting that software in the first place, if at the end of the day, the company in question goes tits up.
I'm a student and have a temp job but occasionally help people out with their gear. I have a fixed price for just showing up because a) there's planning beforehand and b) you don't know how long you're stuck there (.5-8 hrs).
The fixed price is not the rate, I add that when the job's done. Usually, I under price the hours. This has two effects: a) they're more likely to call me again, and b) they usually pay more than I ask.
But the fixed price takes away all the people I am better off without.
Defining Statistics and Social Research