Towards A Real Business Model For Open-Source Software

[phoronix]

Phoronix: Towards A Real Business Model For Open-Source Software

Last week in a FreeBSD status report we talked about the Chromium web-browser support on FreeBSD improving through a new subscription program whereby most of the FreeBSD patches are being kept closed-source for some length of time before being committed back upstream as open-source and reaching the hands of the non-subscribers. This caused some to question the work, but the developer behind this FreeBSD-Chromium subscription program, Sprewell, has written an editorial that we are now publishing. This details his beliefs concerning the future of open-source software business models.

http://www.phoronix.com/vr.php?view=14867

[eikenberry]

Putting aside the authors more inflammatory statements and taking his proposal on its own I am left with a one big question. Where will the customers come from? The commercial software houses spend much (most?) of their income on marketing and advertising. They get their goods put in pretty boxes and sold at retail outlets like Amazon, Best Buy, Fry's, etc. Where will the guy who comes up with a better compression scheme find a market?

I like that people are thinking about alternative schemes to make money off software. Not that this is completely new, Ghostscript tried something very much like this years ago with Aladdin and failed mostly due to lack of clients. I guess this is the classic business problem and up to each to solve for itself, but I'm skeptical.

[crazycheese]

Phoronix: Towards A Real Business Model For Open-Source Software

However, you can't sell open source software products because anyone is free to copy all your source and create a competitor: this is why desktop linux has failed to this day and why it will never succeed.

Well, look how much BSD are installed on Desktops. How much Linux is installed on desktop. The percentage is similar to windows vs linux.

This means BSD has failed to become a desktop system and will always fail, unlike Linux, untill it switches to GPL.

To me, this means following things, something that Steve J. has understood and taken fuits off long ago:

- FreeBSD accepts its always-behind, second choice status.
- It accepts its milk cow status.
- It is a system for those, who were unable to afford MacOSX and pay this with manual debugging.
- BSD license accepts its a milk-cow license.
- Developing under BSD license means to giving away your time and skills to proprietary blobs.

or this guy, is brainless.


"The only marginally successful open source business model is consulting/support, which has done well for some but brings in a small fraction of closed source revenues. "

Opensource is NOT about consulting! Its about programming! Its about having possiblity to influence code development the exact way the customer wishes to and upstream the changes to build on and dont waste others resources.

With opensource you control the result directly,exactly with your investment(money, time, skills) and it will never be wasted in time, will prevent reinventing the wheel, will become exactly what you wish it to be(yearly editions, which you are forced to switch anyone?)

I think this guy,not opensource, is about consulting! *speechless*

[crazycheese]

The TRUE opensource models:

Redhat model:
- users and programmers get testing version which they can play with. Those wanting stable, go CentOS.
- corporate customers purchase license and get support, applied solutions(results upstreamed), they are funding the solutions they want and this solutions get upstreamed.

Gentoo model:
- everyone can do what he wishes, forums and documentation are here and eveyone has the choice and total control - the results get upstreamed too.

Ubuntu model:
- users get ready to use, bleeding age software out of the box, that they test, but also have a possiblity to get LTS - stabilized releases.
- corporate customers have similar options as with redhat model.

This is not forking, it is evolution.
This are not bunch of distros, it is models for different appliances, each one ideal for specific area and all them upstream and exchange.

This is why I will ALWAYS use Mozilla ANYDAY over Chrome garbage.
And youtube HTML5 + H264 issue with Firefox only adds to that!

Marrying devil with god, opensource with blobby blob, not with me!

[Wyatt]

Sort of reminds me of the ransom model of development. I'll have to think about it.

[sal-e]

Let’s test how this business model will work against competitors like Microsoft.
So, you develop cool program, but because you are programmer find only few customers. MS keeps close eye on the market and recognizes the future profits. They take your source. (Phase: Embrace). Then modifies it and they are not forced to release the source or their patches. (Phase: Extend). Then using their dominant position they establish their version as dominant and your program is dead because it is not compatible with MS version. (End game: Extinguish). Good luck. And more luck if you want to work for free for MS or Apple. In fact I think this hybrid model has been tried long time ago. That is how the switch from early open source to current close source business model happened.

I have been thinking a lot how the Open Source programmers would make money also. I think that only real solution is to fix the software development model. Current model is company or individual starts developing software and assumes all the risk and expenses and then hope to recoup the money by selling copies. This is the old record industry model and we can see where the record industry is heading. We need to find way to switch to model were the programmers are paid for developing new features and patches and distribute those patches for free. I see this as work to adapt the FOSS to customers needs. Having well written custom software that matches your business process should greatly reduce the cost of day-to-day operations and maintenance. But this will require big paradigm shift and it will take long time to happen, but I strongly believe it will happen. The systems get much more complex that even if the software is freely available on the Internet you still going to need and an expert to make it work for your business.

[ethana2]

Put donate buttons in the Software Center and bounties in Launchpad.

Don't resort to being jerks until other options have at least been /attempted/, seriously.

[Smorg]

A true hacker thinking outside the box would find a way to make food free so we can hack without worrying about money.

Yeah and the Triple-E model is the first thing that came to mind when reading this article.

[ModplanMan]

I suggest he does real research on the issue.

http://www.toad.com/gnu/cygnus/index.html

http://www.youtube.com/watch?v=NlNlcLD2zRM

The only reason OSS business brings in a fraction of the money is because there are a fraction of the amount of companies involved in that business.

[Sprewell]

I wrote the original article, I thought I'd respond to some of the misguided comments I'm seeing here.

eikenberry, Where will the customers come from? You ever heard of the internet? If you really think software companies spend much or most of their income on marketing/advertising, I see that you are completely ignorant of the real issues here. As for the guy who comes up with a better compression scheme, try reading the actual piece: I said he would license it to one of the hybrid-source vendors who sell the software to the end user. As for Ghostscript, not only are you wrong, but the exact opposite is true. The guy who came up with the ghostscript model and the AFPL, L. Peter Deutcsh, made enough money by 1998 that he was able to retire. I traded some emails with him some time back and he told me that between his license and the dual-licensing model that ghostscript later switched to, it "generated, by now, tens of millions of dollars in revenue that (among other things) supports a team of good engineers improving and extending the code." Lack of clients, my foot.

crazycheese, it is true that linux is installed on more desktops than pure BSD, but there's no way the ratio is the same as Windows to linux. If you count Mac OS X as BSD because of its BSD userland, BSD has way more desktops than linux. If you think BSD-licensing is just giving away your work, how is GPL any better? You think IBM cares whether they take your GPL work or BSD work? At least with the BSD license, anyone is free to close up sections and build a real business off the code: that is the true freedom that the BSD license allows. I am well aware that open source is about not reinventing the wheel (did you even read my piece?) but that won't get you anywhere if there's no money behind it, as we've seen with the continual failure of desktop linux and pretty much any open source business so far, outside the enterprise consulting niche. Thanks for the list of open source "models" but those aren't business models, which is what I'm talking about. If you think open source is god, it is clear this whole discussion is lost on you.

sal-e, it won't be that easy because parts of the codebase are closed, so anyone who wants to fork will have to clone or license those closed sections.

ModplanMan, I'm well aware of Red Hat and Fedora, what's your point? Let me show you some actual numbers. In the last 4 quarters, Red Hat brought in $750 million in revenues, Microsoft brought in $60 billion: that is almost two orders of magnitude more. Red Hat isn't some new startup either, it's been around 17 years. If there were so much money in open source, they'd be making it by now and grabbing huge market share.

The truth is that open source business as currently pursued is a failure, and it will continue to be a failure as long as its proponents take the purist approach demonstrated by the commenters here.