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How Can We Fix The Broken Economics of Open Source? (medium.com)
"The economics of Open Source software are fundamentally broken," argues Matt Klein, a senior software engineer at Lyft (who created Envoy). Here's a heavily-condensed version of his essay on Medium:
If we take consulting, services, and support off the table as an option for high-growth revenue generation (the only thing VCs care about), we are left with open core [with some subset of features behind a paywall], software as a service, or some blurring of the two... Everyone wants infrastructure software to be free and continuously developed by highly skilled professional developers (who in turn expect to make substantial salaries), but no one wants to pay for it. The economics of this situation are unsustainable and broken...
[W]e now come to what I have recently called "loose" open core and SaaS. In the future, I believe the most successful OSS projects will be primarily monetized via this method. What is it? The idea behind "loose" open core and SaaS is that a popular OSS project can be developed as a completely community driven project (this avoids the conflicts of interest inherent in "pure" open core), while value added proprietary services and software can be sold in an ecosystem that forms around the OSS...
Unfortunately, there is an inflection point at which in some sense an OSS project becomes too popular for its own good, and outgrows its ability to generate enough revenue via either "pure" open core or services and support... [B]uilding a vibrant community and then enabling an ecosystem of "loose" open core and SaaS businesses on top appears to me to be the only viable path forward for modern VC-backed OSS startups.
Klein also suggests OSS foundations start providing fellowships to key maintainers, who currently "operate under an almost feudal system of patronage, hopping from company to company, trying to earn a living, keep the community vibrant, and all the while stay impartial..."
"[A]s an industry, we are going to have to come to terms with the economic reality: nothing is free, including OSS. If we want vibrant OSS projects maintained by engineers that are well compensated and not conflicted, we are going to have to decide that this is something worth paying for. In my opinion, fellowships provided by OSS foundations and funded by companies generating revenue off of the OSS is a great way to start down this path."
[W]e now come to what I have recently called "loose" open core and SaaS. In the future, I believe the most successful OSS projects will be primarily monetized via this method. What is it? The idea behind "loose" open core and SaaS is that a popular OSS project can be developed as a completely community driven project (this avoids the conflicts of interest inherent in "pure" open core), while value added proprietary services and software can be sold in an ecosystem that forms around the OSS...
Unfortunately, there is an inflection point at which in some sense an OSS project becomes too popular for its own good, and outgrows its ability to generate enough revenue via either "pure" open core or services and support... [B]uilding a vibrant community and then enabling an ecosystem of "loose" open core and SaaS businesses on top appears to me to be the only viable path forward for modern VC-backed OSS startups.
Klein also suggests OSS foundations start providing fellowships to key maintainers, who currently "operate under an almost feudal system of patronage, hopping from company to company, trying to earn a living, keep the community vibrant, and all the while stay impartial..."
"[A]s an industry, we are going to have to come to terms with the economic reality: nothing is free, including OSS. If we want vibrant OSS projects maintained by engineers that are well compensated and not conflicted, we are going to have to decide that this is something worth paying for. In my opinion, fellowships provided by OSS foundations and funded by companies generating revenue off of the OSS is a great way to start down this path."
... requires developers to develop software people are actually already paying for. I've thought long and hard if I could find investors to change the AAA videogame industry from the bullshit payment models and shit service to "buy to own" and "game development as a service model".
AKA there should be enough nerds for us to basically revive 8-bit and 16-bit type AAA games as a service model (aka we build games together that we ultimately all own and the code is open) for those of us above average incomes and who are true enthusiasts, basically take advantage of enthusiast interest in technology and turn it into a "sams warehouse club" for nerds. I was thinking about this with how costco has membership. If you want to do OSS then you're going to have to do so with a product that there is a known demand for. People don't want the boring shit, they want entertainment and shit that actually is valuable enough to pay for, aka you do the shit people want and use the funds from the shit people want to do more serious stuff.
For instance game development requires tools programmers that could make dents in the CAD and Image processing industries - aka take potshots at the crappy tools made by Autodesk and Adobe. Now this is not to say that many private sector products are bad, but Open source software versions developers have no discipline because they are free, when your job or your company is on the line with the quality of your work it forces you to stand up and take notice.
Now while windows had huge problems as we all remember from an engineering standpoint, you have to acknowledge the savvy of making computers user friendly enough for people to actually want to use them. That was microsofts genius. People used DOS and windows back in the day because the market was big enough for games and other apps.
About a year ago I started a new business providing voice services to small businesses in my area (VOIP).
I specifically opted to use FusionPBX because it's completely free, so getting started is no cost other than some time figuring out how it all works.
After I got more familiar with it, I came to find the author actually provides training courses for more advanced features.
He charges a fair price for classes, and who better to learn more advanced features than the person who writes the software.
I really like this model because its free for those who just want to fiddle, and in depth education is available for those who plan to make a living from it. The author makes some money to keep the project going.
He also maintains an online resource available for those who take the in person training to keep up on the changes on the platform called "Continuing Education" for a monthly fee.
I've worked full time getting paid quite well to work on open source.
Open source doesn't mean developers work for free. They get paid by the same people who normally pay them. It's just that cooperation makes them more efficient, so they can potentially be paid more. I'll give you one example that I have allot of experience with.
Universities (and others) are offering a lot of courses online these days. Suppose 40 institutions want to offer online courses. They each need an online system to manage those courses, an online campus. Suppose having such a system is worth $60,000 to each school. A programmer can build it in 500 hours at a cost of $30,000, so each school does it. (It'll cost them $30K and be worth $60k of value). Forty schools each spending $30k is a total of $1,200,000 spent. Later when they want other features they'll spend more.
Alternatively they can cooperate, building a modular online campus system that works well for all of them. Maybe that costs four times as much as building a system for one school - 2,000 hours, or $120,000. That's 90% less than it costs for them to each build their own. Later, when a school wants a new feature, it was already built for a different school. They just install it.
In the first scenario, the programmers each took 500 hours to provide something worth $60k. In the second scenario, 40 programmers at 40 schools spent a total of 2,000 hours. That's 50 hours per programmer to provide the same $60,000 of value to their school.
Who do you think can be paid more per hour: a programmer who takes 500 hours to get the job done, or one who gets the same job done in 50 hours?
Far from "working for free", by cooperating on an open source project we were able to provide the same value with 90% less work from each of us, so we were much more valuable and highly paid than a programmer who doesn't cooperate and use open source effectively.