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How to make money with open source software
steve_brody writes "IBM has published this new article in its Linux developerWorks Zone on how to turn your open source expertise into cash. Also includes a summary of different licenses, if you are considering copyrighting (or copylefting) your software. "
If you want can show me how to get it cheaper here in Sweden, by all means do. I'd love to get it for less money.
The problem for small software companies is more Microsoft than it is free software. Companies like WinGate have no problem selling their product, even though ipmasq and ipchains offer the same functionality (and more) for free. However, when Microsoft integrates NAT with win2000, that'll pretty much kill off their business.
Until either more people switch to Linux (it's currently at less than 1% marketshare for home users), or more free software is written for Windows, it's not going to have that much of an effect.
As for your Netscape example, it actually counters your point. Netscape makes almost no money from it's open-sourced browser. The bulk of Netscape's revenues come from its server software, which is completely proprietary, closed-source, software.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I'm a contractor with IBM and everyone here loves Linux. I've discussed it briefly with some management people and there was NEVER a snicker or even a hint that they thought Linux was a toy.
My last stint was at (unnamed travel and charge card company), and if I mentioned Linux the first thing out of the managers' pieholes was "how can we make money using Linux?" All of them thought that if Microsoft couldn't make money off Linux, then neither could they. Silly little me thought that (company) was in the traveller check business, not the operating system sales business. Heh heh!
The difference between those two jobs is night and day. IBM really gets it, and it's truly a pleasure working for a company that is on the right track.
If tits were wings it'd be flying around.
If lumber is cheap, then the people who profit are skilled carpenters and people who can transport the lumber cheaply. That's the metaphor I'd use to describe Open Source. The code is cheap. The people who would be expected to make money are consultants who can customize software, and outfits like Cheapbytes. Of course, I'm not a developer. I'm posting this for a reality check.
The content of this article can be summarized as getting a day job and make coding a hobby. The best way to make money on it is to apply it in conjunction with a degree in CS with good grades and do something else for income like consulting. Either way you must have a technical, quantitative oriented degree and good grades. No-one is paid to code. Bare software is just that: bare.
We should all realize that OpenSource is creating problems. In fact many people cannot adapt to this new world. But one thing that OpenSource detractors should realize is that OpenSource is working. Or else we wouldn't be here discussing IBM's thinkings and Linux success.
Several years ago I created a product under the typical frame of proprietary code. The only thing I wanna remember from it is that all that was a bad dream. Yes I managed to make some good money at start. However the what came after was a Hell for many reasons. I realized my error and quit that world. One of the main reasons was that I couldn't afford to spend more money and other resources on developing the product.
Today I barely code the way I did. I don't make programs anymore. The most I do is patching exisiting ones. And it is quite frequent to just hang around a few hacks to make things work. Call me parasite, sucker whatever you want. I could recognize these labels on me if I worked on the principle "mine, mine and only mine!". But I also share what I do. And I don't have seen a cent vanishing from my pocket for this. Quite the contrary.
Yesterday I could barely pay my bills. Today, I can afford a life for me and my family. And most of the stuff I work with runs stable and performing.
Yesterday I could afford to help 3-4 people at one time. Today I have more than 3000 users dependent on what I do. I work 99% on OpenSource software. Last time I touched 100% commercial software was more than a month ago.
The problem many developers suffer today is by seeing their ideas as gold mines. Most like those patent-fan inventors that try to grable every idea under a piece of paper and calmly waiting that someone brings them a suitcase full of dollars for it. Unfortunately software is a hybrid mutant constantly changing its faces. So while you're waiting your gold you may suddenly realize that your idea got some rust...
Well, it's not.
When you're in school, or when you're writing software in your copious spare time, then there's really no cost to develop the software, and so just about any money you can make off of it is a profit, and life's good. But if you're out in the real world, needing to make a real living, things are much, much harder. When I look at the options available to me -- and I produce several free software packages with a respectable user base -- it's crystal clear that making a living requires me to be doing fully commercial software, either for someone else's company or starting my own.
So why do the current efforts not work? Primarily because they fail basic market economics. Man time is very expensive, especially for a good programmer. A fully commercial software effort can pay the programmer at a certain rate for his time. The methods of making money with free software are usually -- not always, but usually -- paying a lot less for your time than the rest of the market would. When we're talking about paying the rent and buying food, the difference between one rate of pay and the other is not to be taken lightly.
Look at the current money-for-free-software web sites that have been set up. "I want a driver for XYZ high-end undocumented component. Must be fully functional and reliable. $100." Come now. Do the math; that's below minimum wage. Even projects that are willing to pay $10,000 -- which are very rare so far -- are usually pathetic when you consider the dollars per unit time. Oh, then there's the minor detail that you might not actually collect the money.
This really is a sad state of affairs, and is a problem that must be fixed. Too many free software projects are so big now, both in terms of the code's complexity and in terms of how many people rely on that code, that they need multiple humans working full-time on them in order to remain viable. But there just isn't money right now to pay those people for their time at anything approaching a competitive rate.
Meanwhile, you better believe that companies like IBM are embracing free software. They get all the profits at a dramatic reduction in costs. This is not a hard bit of math. Who wins? The customer wins -- they get better software. Companies like IBM win -- they get more profits. The free software authors... uh...
In order to make the most of peoples bug reports, you want them to always get the latest version and the only reliable way to do that is to make them download it from the main ftp site or some verifiable mirror.
Now, the other problem is that we don't want people to expect there to be a small cost for the software. We want them to expect that there will be a substantial cost, but that there will also be a substantial donation to the development when they buy it. So that when they buy a software for $1, they should think that there is something wrong.
So what you do is that you make your software available for download as usual and then you start selling CD-ROM's with the software and nicely printed documentation for a fee equivalent to what the software would cost if it were proprietary, or even higher. Most people will download your software for free from the FTP site, but some people will actually pay for the software because they either like it so much or they have a manual-fetish.
And this is something that really works. We don't have to have any "micropayment infrastructure" because you can do this today with existing means. There's an incentive in this to create good documentation for free software too, because that's something we really need.
I would have sent this through email if you had provided one, but perhaps you didn't read all the text? If you did you'd have seen that I need a good monitor. $500 won't buy me a good monitor. In the price I quoted is a monitor for roughly $1000. I suspect there's a $200-$500 fee for living in Sweden too and not in the US..
I'm not saying that it's impossible though, just that it's a little harder than most people think. Just because you're good at programming free software, that doesn't mean that a company will hire you to improve the software they use. Most companies probably never used GNU/Linux anyway, at least that's the case in Sweden, although that is constantly improving.
So you need to sell yourself in some way. Hopefully you can do this through contacts that you have made with other companies earlier. That's the easiest way to do it. If you don't, well, you'd better start knocking on doors real soon.
As for me, well, I could probably do a lot more free software work than I do today if I had the money for it. I'm using a 486 as my console, you can imagine how fun it is to run X and compile programs on it. Sure, it works, but it takes a lot of time and effort so I don't do X. For some of you, $2000 to buy a new system (yes, that's how much I need. My eyes are bad so I need a very good monitor) might not be that much. But if you've been living on the edge for most of your life, barely having enough money to make ends meet, $2000 is way over the roof. I could live on that kind of money for more than 3 months!
So I'm trying to make the best of it. I'm trying to save money so I can one day buy a new monitor and a new system and get some real work done, but at the same time, I have to make a living somehow. Jobs are hard enough to get in Sweden as it is, and if you only want to work 50%, and work with free software, I've found out the hard way that you're pretty much out of luck.
Today, I'm hardly able to make ends meet. I've been lucky enough not having to pay rent this summer so I've been able to get along fairly cheap, but now that summer is over, things are changing and I have no idea what will come. I've got a few leads and I can probably get around 40-50% of the money I need working from home on free software, but the rest? Well, I hope to find either people who can pay me to work on free software from my home in the form of donations, or companies who can hire me to do some part-time programming or system administration for them. Now only time will tell.
So this became a little more about myself than was intended, but I want to make everyone who thinks that they can make money by doing only free software realise exactly what they're getting in to. There will be times when you simply won't be able to pay your rent and your income will be very irregular at best. Think once, twice, three times and more about that. If you're not absolutely certain that free software is something you must work with full time, then you're probably better off taking a regular job and putting down some hours on your spare time to do free software development.
You can be a free software advocate and work from "within the system" to try to change the company you work for and introduce them to free software.
Then again, if you can pull it off, then there's rewards greater than anyone can even begin to imagine waiting for you. It's the reward of being able to look back at what you've done and feel genuinely happy about it. The feeling of having done something with your life that has helped hundreds, perhaps thousands of people around the world. That's what I feel every day when I go to sleep, a genuine satisfaction about the work I've done that night. Sure, I haven't been able to make ends meet this month and I don't know where that will take me, but I'm happy. I haven't been this happy for many, many years and I wouldn't want to have it any other way.
Feel free to mail me at .