Open Source Doesn’t Make Money Because It Isn’t Designed to Make Money

Open source software is infrastructure, not a commodity. Anyone has access to build on top of it. There is no question that open source enables enormous amounts of commerce, probably more so than equivalent closed-source software would. In that way, open source very much does make money in the same way that highways and airports make money.

In that situation writing software is like cleaning dishes. No one in the restaurant business says, "We need to find a way to monetize our dishwashers."

I think doing the argument of "open source vs business focused" is incorrect. I would just make the comparison of "business focused vs not business focused". If it is open source or not, that is just a detail of the business strategy.

One of the main problem that we technologist fail at is that a lot of the times we assume technology == product. When we do this, we completely overlook all the necessary infrastructure and processes that we need to have in place to capture the value that the technology provides. We need customer success to guide the customer through a continuous successful implementation, marketing to very clearly articulate value propositions that change in different verticals, a sales team to capture the value and turn it into dollars consistently, support to listen to the customer when things go wrong and hold their hand through the fixes or workaround, lawyers to prepare support contracts and cover procurement requirements, hr, etc etc. I could go on forever.

I disagree that there are not examples of companies that show how to make money from open source. Beyond the obvious examples like "RedHat is a public company" and "MySQL sold to Sun", I can think of an absurd amount of businesses whose secret sauce is ElasticSearch. I would argue, that even though Elastic is a public company, they have not been capturing all the value they have brought. Although there are consulting companies like EnterpriseDB and CitusDB around projects like PostgreSQL, thinking that "consulting" is the one and only business model around monetizing an open source database is a gross over simplification that glosses over models that are evolving in various other areas, for example the one Jetbrains is doing with IntelliJ (basically a subscription service now).

I can look at the current top 100 posts of HNs and point out quite a few of successful businesses that would not have been where they are right now without open source existing in its current form.

>TurboTax replacements

I know this is only for Canada and most likely for personal tax filing only, but simple tax is amazing. It's pay what you want and is developed by a team of 6 people.

https://simpletax.ca

It seems like a tragedy of the commons situation, which we have been able to fix in other instances with organized funding. We've seen some organizations spring up around funding open source projects, but if e.g. the US government authorized federal grant funding for open source projects, I think it would set an example for industry (and other governments) across the world.

The challenge is getting historically scarcity-mindset institutions to recognize the value of letting the rising tide of free information lift every ship in the world. They don't like this on its face because they have divided the world into "us" and "not us" and open source provides more utility (in aggregate) to "not us" than to any "us" defined as narrowly as a single company or country. Until Big Finance, Big Pharma, Big Food, Big Manufacturing, and Big Government embrace a broader definition of "us" beyond their own conglomerates, they will continue to see open source as a threat.

This gets at a broader cultural movement toward abundance, that in the US has strong roots in coastal western cities like LA, SF, and Portland, and strong opponents in the Midwest, South, and East. If the US federal government were to invest heavily in open source, it would send a message to the rest of the country that we are now in an age of abundance, where we recognize the value of lifting all ships, because we know that our strength is in the strength of all of us, not the strength of our few strongest players. It would signal a cultural shift toward collaborative ownership and, I believe, spur investment in many commons.

It's difficult to speak the truth of this mindset to power, because incumbents recognize that there are real competitive threats. The hope is that governments will recognize that there are far fewer threats in a world where people have the basics covered, and companies will recognize that defining and advancing the state of the art makes you look pretty good to the best talent and best customers.