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The incompatibility of open core and profit

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Re: The incompatibility of open core and profit

#11

Post by j6zauas4gz »

I might be willing to buy that open core/open source and the standard VC funded "startup" esq business model are incompatible.

But I don't think open core and open source are incompatible with profit or with sustainable business models. Sure, the nature of open source might preclude you from breaking into the millions of dollars of revenue / funding (I dont buy that though, to be honest) but even if thats true those 100x return VC backed buisness models are very, very rare in the buisness world. Thats not how most buisnesses are run, and that's not the same as profit. To be profitable all you need is to make enough to pay the bills.

If you want to write neat software and share it with the world while also making enough money to live comfortably I think that's totally doable. Have seen many independent devs and small businesses doing interesting work in FOSS and making more then enough to live on.

Re: The incompatibility of open core and profit

#12

Post by esperent »

dasil003 wrote: post #8
ilyt wrote: post #6

Sooo what is says is that Open Core goals are mostly to get your users hooked under pretense the software is "open source", while putting just enough features behind the proprietary part that you have no choice using it once your product grows ?

Yes, but that read is a bit cynical. I think it's totally reasonable to create some tool that any college student or tinkerer can use to get a cool idea off the ground, but also want to get paid when it's leveraged to significant financial success. Pure open source is nice, but in practice it means corporate sponsorship or ramen lifestyle, both of which, it seems to me, have worse downsides than the loss of ideologic…

> Yes, but that read is a bit cynical

Is it? I've found that all open core projects I've used over time gradually lock more and more features away with each update and usually end up being more expensive than the closed source alternative.

The latest example is RocketChat which a year ago had a couple of features and one or two gentle reminders to upgrade to enterprise, but now it's getting really naggy. And when I did contact them for enterprise pricing, which is not clearly available, it ended up being way more than we could pay and a lot more than Slack (can't remember exactly now but something like $10/user if we included the bridges to WhatsApp and Messenger).

Can you give any counterexamples of popular, growing open core projects that don't lock away more features over time?

Re: The incompatibility of open core and profit

#14

Post by api »

How do you give people a product that maximizes freedom and privacy without going bankrupt?

It seems like the only way to make money in this industry is to strategically cripple your product or exploit your users in some way. It’s deeply dysfunctional and twisted.

I can’t do my best work and make a living. I have to create something that is worse in some way than what I could create or nobody will pay for it.

Re: The incompatibility of open core and profit

#15

Post by hibikir »

Open core in data isn't even close to new: We've had companies contributing to OSS databases, while selling extensions with a bunch of extra features, back when noSQL was all the rage. Back then, I was called to rescue a large distributed system where the architect had bought on the commercial offering, and managed to rely on basically every single feature in it. He hired his engineers from the conference circuit, including some that had written books, thinking this was giving him a good talent. And yet, the system wasn't working well at all: Almost everyting appeared to work on unit tests, but nothing worked well in production for hard to track down reasons.

Given the instability, I started by mistrusting everything in the system, and it didn't take me too long to realize that every single extension feature from the for-pay distributed database wasn't actually doing what it said on the tin, or it performs orders of magnitude worse than anyone expected. Only the open-sourced features, which had been used in production all over the place, and had received sufficient patches to be reliable. Everything that we were actually paying for was mostly worthless, and needed to be engineered around. The real value of open source here had been a very large user base that guaranteed a semblance of quality. Since for-pay features were available only to the few for-pay customers, the company was faking it until they made it... and there was a lot of faking.

This is the ultimate problem of open core v profit: the quality of the OSS has to be rally high to get any actual open acceptance, but every second spent on the OSS system is one you aren't spending on the parts that get you revenue. If you make the OSS system too hard to use, there's little value from the OSS bits, but if all you are missing is a tool or two, someone can build open replacements, which might actually beat yours anyway.

It's not absolutely impossible to end up with a working company like this that is more than a glorified consultancy, but the success rates are just very low. The fact that this is true, and well known, also makes people purchasing tools be wary of the model, you don't want to build your infrastructure around a tool that quickly goes on life support. So all in all, going for this model is quite the gamble.

Re: The incompatibility of open core and profit

#16

Post by judge2020 »

esperent wrote: post #12
dasil003 wrote: post #8

Earlier quoted context omitted.

Yes, but that read is a bit cynical. I think it's totally reasonable to create some tool that any college student or tinkerer can use to get a cool idea off the ground, but also want to get paid when it's leveraged to significant financial success. Pure open source is nice, but in practice it means corporate sponsorship or ramen lifestyle, both of which, it seems to me, have worse downsides than the loss of ideologic…

> Yes, but that read is a bit cynical Is it? I've found that all open core projects I've used over time gradually lock more and more features away with each update and usually end up being more expensive than the closed source alternative. The latest example is RocketChat which a year ago had a couple of features and one or two gentle reminders to upgrade to enterprise, but now it's getting really naggy. And when I d…

Redis is technically open core, with Redis Enterprise supposedly gating 'simple' scaling, multi-tenancy, and a (I assume) plug-and-play k8s integration https://redis.io/docs/about/redis-enterprise/

Re: The incompatibility of open core and profit

#18

Post by josephcsible »

Entinel wrote: post #9

There is no incompatibility between Open Core and profit. There is an incompability between FOSS and profit but the motives of "Open Core" are transparent and always have been. It's always been a marketing scheme to entice people into using the full product once your business scales and I don't see the problem with wanting people to buy-in if they are using in at that scale.. I also think the "solutions" presented he…

> There is an incompability between FOSS and profit

Red Hat says hi.

Re: The incompatibility of open core and profit

#19

Post by blakeburch »

mooreds wrote: post #2

Interesting look at a tough problem (OSS business models). I'm not sure I buy the solutions, but it sure doesn't hurt to take another look at the issue.

Author here. Would love to hear what solutions you would suggest! I only mentioned those I'm aware of that I find admirable (which is not the same thing as them actually working).

Re: The incompatibility of open core and profit

#20

Post by armchairhacker »

Open core is the only way to really monetize open-source software. You see this issue with core-js, you see it with mold linker, which went "open core" in a desperate attempt to get more funding.

At the end of the day we must remember that people need to make money and most simply don't have the time or desire to make open-source for free. And until more people actually get adequately paid for making open-source, open core should not only be tolerated but encouraged. Because the alternative is open-source projects dying or people just not making open-source at all.

Now there are definitely people and companies that put "open" on things which are not open* (e.g. OpenAI, or any ML company which claims a model is open-source but does not distribute the weights). But if a project has 100% of the code public and an open-source license, the project is "open-source" and the owner can't just take it back. If they try, or try to steer the project in a proprietary direction, the community can fork.

So open-source with paid auxillary services, support and training, and a GPL (maybe not AGPL) license is still open-source and IMO completely fine. Ultimately, the ability to fork and self-host is what differentiates real open-source from fake.

* Because on the other hand, providing a facade of open source is usually also the only way for many to popularize a commercial library. For many reasons, solo developers and businesses don't want to use closed-source binaries. Some other SE projects e.g. languages are like this as well. So we have genuine people just trying to make a living and greedy executives abusing buzzwords both choosing "open core".

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