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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."
It is working as designed. ALL software, in the long run, is a race to the bottom in terms of pricing. There is always cheaper labor, and with zero tangible resource cost (unlike computers, houses, or cars) that means it eventually falls to the lowest price for labor - often for free. Open source accelerates that, as the product is basically free to begin with, and you HOPE you can find someone to pay you to manage it. This often results in UIs that are not heavily worked over for user friendliness, because that kind of sabotages the entire "hire me to make it work" push. And because it cannot be realistically deployed without that help - it becomes of little interest to consider unless there is a lot of already-built-up demand and use in the market. A vicious cycle, that results in poor or zero income for everyone in it. By design.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
A better way to put this:
Even if milk, flour, eggs, and sugar could be obtained for 0$, people would still buy cakes from the store.
Why? People will pay for convenience. Specifically, the convenience to free up their time for other, more desirable or productive tasks.
So, even if all the ingredients could be obtained for a genuinely 0$ price point, mom will STILL pay to have a cake made for her, for her little girl's 6th birthday party, because mom is busy doing other things and can better use the hour of her time that would be spent making the cake and (trying to) frosting it herself. Instead, she could be arranging for the party, or checking invites.
Same is true in software installation settings. Sure, the source code and tools are freely available. Do you have the time to spend every month or so vetting the compilation chain, building the suite you use from source, then vetting all the components built right? Or-- would you rather pay a nominal fee to a trusted source--- specifically, the very same group that maintains the free software you are using?
Right.. Exactly.
Even a simpler analogy: people buy bottled water.
Think globally but act within local variable scope.
There is nothing wrong with how open source works, it works fine. The problem is what some people want from open source.
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.
Here's the conflict, people want something for nothing and that can work out sometimes but it means you are at the mercy of people you have no control over. That said, since it is open, you can hire people that you have control over to contribute to the code. The fact that few chose to do this demonstrates a failure in leadership rather than a failure in open source.
TL;DR: you dumbass MBAs are shortsighted nitwits who deserve to bear the responsibility for every security breach that happens under your blind-leading-the-sighted leadership.
Anons need not reply. Questions end with a question mark.
I generally stop reading if the opening argument starts by stacking the deck:
"but apart from better sanitation and medicine and education and irrigation and public health and roads and a freshwater system and baths and public order... what have the Romans done for us?"
"I know I will be modded down for this": where's the option '-1, Asking for it'?
>>If we take consulting, services, and support off the table as an option for high-growth revenue generation (the only thing VCs care about)
As if high growth, and the concentration of wealth to those that drive it, were worthwhile goals for all human endeavours.
So VC's are whining OSS isn't "profitable enough"? Are you.. are you kidding me? That's got to be the most hilarious unintentional joke ever to come out of the Valley. I mean it's great on so many levels!
But in software, someone has to pay.
Fix your cake analogy: The cakes are made in a batch now. Once they are made, everyone gets a cake... but whoever wants their cake first needs to pay for the entire batch, and watch everyone else enjoy the cake they just paid for.
Everyone is going to do the economically sensible thing: Wait until someone else is hungry enough to foot the bill for the entire batch, and then enjoy free cake.
The raw material in software is programmers time and creativity they should look to publishing for inspiration there.
Yes I just quoted Bill gates and defended publishing and copyright. sosumi
Your'e all thinking it, I just said it for you
Whilst all that is true, seriously why would you expect those who have infinite greed as they core motivator, to stop complaining about FOSS. They want monopolies, they want to pay bribes to government to use their proprietary software and then force end users to buy it to access government information, they want to lock down your data, they want to own the copyright on the content you create when you use their software, they want you to pay a fee again and again and again for nothing, just pay.
Closed source proprietary software is all about infinite greed, no limit to profits, total world dominance, absolute power. Come on seriously, look at the crazy way M$, Google, Apple, Facebook et al have behaved, absolutely insane psychopathic greed on full public display again and again and again. Always after they go public and the psychopaths from the major banking investors take over.
Chaos - everything, everywhere, everywhen