Monday, December 1, 2008

Make money from open source? Umm, no.

Computer rigeneriamociImage by rigeneriamoci via FlickrOn Open Source:
Companies have long hoped to make money from this freely available software by charging customers for support and add-on features. Some have succeeded. Many others have failed or will falter, and their ranks may swell as the economy worsens. This will require many to adopt a new mindset, viewing open source more as a means than an end in itself.
- Open Source: The Model Is Broken
Umm... Duh.

Let's look at a couple of the premises of Open Source.
  1. Open Source code is higher quality
  2. Anyone can modify it
  3. The more successful the software it, the larger the community.
Now, lets look at the business model.
  1. Give software away for free
  2. Charge for support
  3. Charge for custom development
You're giving the software away for free so you can't charge for a license. Charging for support means that when something breaks or your clients need help, you help them in exchange for a yearly or monthly fee. Unfortunately, by making your product a successful open source project, you destroy the value of your support contracts (see 1 and 3 in the first list). You say you want to charge for customization like a consultant? See number 2 in the above list. That project is going to the lowest bidder. Also, good luck making that scale.

What sucks here is that I like open source. And to make something sustainable, you have to be able to make money off of it. I don't know how to do that. The original author might, but he just spent two pages not telling us.

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Anonymous said...

Maybe you are not able to live entirely off of open source software, but I guess that companies can save some time and money because of the "like sharing a pizza" effect if they contribute code.

If you write code for an active open source project, and your code is merged to the main branch, you can be sure (at least for a while) that what you wrote will be compatible with the latest version of the software. More people will also test your additions, so it is not impossible that you will get free help finding and possibly fixing bugs.

Unknown said...

GPL does not stops you from get paid about your software. You just have to deliver the source, and also BSD.

Sandro Magi said...

Contracts don't automatically go to the lowest bidder. They go to the bidder whom the client feels is both most competent to do the necessary work, and who is not charging an unreasonable amount. Business pays for competence (usually, even if the competence is only perceived).

And who is more competent than the people who actually created the software? Nobody, that's who.