It is a good, but incomplete article, as TF is not addressed.
Open Source does not win by being cheaper
101–110 of 287 posts
Re: Open Source does not win by being cheaper
#102"Profit" is a strange and ambiguous term here. I've been running an open source, libre project for closing in on 24 years now, and generating revenue from it for about 17 years. There's never been any "profit", but there has been revenue. I regard profit as what's left of the revenue after you pay the people who work on the project and any expenses, which is the way most corporations and accountants would view it. Th…
The article is talking about businesses being on Open Source foundations, not the myriad of other possible Open Source projects.
In that context profit is what's left once revenue is received and expenses paid.
Implicit in those expenses are (fixed) salaries, employee contracts, payslips and so on.
What a business does with the profit can be varied. Firstly it can be added to cash reserves, which can contine to pay expenses through poor-revenue months. It might be spent on assets, like new hardware. It might allow for another hire. In some cases, although less often than you might think, it pays out dividends to owners.
You don't mention too many details, so I can only presume your situation. I suspect it's a different kind of setup. If you are man-alone, and the project is small, (ie you have no desire or need to add a employee) then basically the revenue is just income to you. Some months you get more, some months you get less. In this context there isn't "profit" but revenue. This is especially possible for software where other overheads are trivial and the effort of tracking expenses for tax purposes meaningless. You may not even keep a set of books.
If you are indeed in this space, then I understand why the article feels unrelateable. It's discussing a very different situation.
As with all articles of this nature, context is important.
Re: Open Source does not win by being cheaper
#103The author calls out they are specifically talking about open source solutions that compete with paid offerings. IMO, the jury is very much still out on whether open source "wins" in this regard. In the past decade we've seen a huge rise of open source products, and in the last 5 years or so we've seen many of them move away from that. MongoDB, the Hashicorp stack, Elastic, Red Hat, MinIO, the list goes on. There are…
The Caddy project is fighting to show it can work. We are having moderate success. I just gave a talk about this a couple weeks ago at an internal company event and will be doing so again at GoWest in a few weeks. The premise is that open source licenses are what they are: they grant freedom, but not other things that companies would pay money for. Proprietary licenses do offer what companies need, but at the cost of…
Caddy is far more simpler to understand than any any other server software. Thanks for building Caddy!
Re: Open Source does not win by being cheaper
#104The author calls out they are specifically talking about open source solutions that compete with paid offerings. IMO, the jury is very much still out on whether open source "wins" in this regard. In the past decade we've seen a huge rise of open source products, and in the last 5 years or so we've seen many of them move away from that. MongoDB, the Hashicorp stack, Elastic, Red Hat, MinIO, the list goes on. There are…
How do VLC and Blender manage?
Re: Open Source does not win by being cheaper
#105> For some, this might be a tough pill to swallow. But a for-profit business exists for profit. No, a business usually exists to provide some useful good or service to its customers. FedEx delivers packages. Apple makes phones and computers. Etc. > Definitionally and practically. Profit is what allows the company to hire employees, grow, and sustain itself—it is quite literally what funds ongoing development That's g…
> No, a business usually exists to provide some useful good or service to its customers. FedEx delivers packages. Apple makes phones and computers. Etc. That's just an avenue to make profit. If those activities weren't profitable, they probably wouldn't get done, outside of government regulation or subsidy. Sure, some businesses are "labors of love", but they still would likely not exist if they were break-even, cert…
I would not call it a problem with capitalism, I would call it capitalism's greatests feature. A free enterprise system ensures that resources are used to create the greatest value for consumers. If firms did not need to seek a profit, why would you expect to get anything from them that you value.
Re: Open Source does not win by being cheaper
#106Sort of related only in the realm of software sales:
A long time ago I sold a user interface update to a poorly designed game. I priced it at 2x the cost of the game ITSELF. And people still bought it, because it was professionally designed. That is, I as a professional designer, took time away from my full-time work to do what presumably this developer could not.
The primary complaint as clearly noted in the comments of the digital distribution platform I sold on at the time was that the update was too expensive. And people obviously commented on how I price-positioned the software.
But one point was obvious. The game itself was too cheap.
When people are complaining about your price alone and still buying, it’s means there was nothing else worth complaining about.
The birds will always want free food. Don’t cater to the birds.
As a flattering addendum, the update was distributed illegally and got around to pirates quite well! I was happy with that because most customers paid. It was also clear that I was fulfilling a desired feature set that otherwise wasn’t being delivered.
Some problems like that are nice to have as a symptom of creating something people want.
Re: Open Source does not win by being cheaper
#107Earlier quoted context omitted.
> saying that those words when they are in extraction mode. These words were almost verbatim used this morning in a meeting. A small agile ISV was purchased by one of those big "holding companies" and now everything is "for consideration", "not on the roadmap", "not strictly required", or like you said "not their current focus". We've been raising issues like: "You're using frameworks and SDKs that went end-of-life y…
I think you are not the target customer that the holding companies is looking for. I would try to see an out and look for another vendor, tool or alternative.
Too much lock-in due to extensive customisations — which is precisely why the small ISV was a lucrative purchase for the holding company.
They can safely milk their customers for enough years to recoup the investment.
Re: Open Source does not win by being cheaper
#108The author calls out they are specifically talking about open source solutions that compete with paid offerings. IMO, the jury is very much still out on whether open source "wins" in this regard. In the past decade we've seen a huge rise of open source products, and in the last 5 years or so we've seen many of them move away from that. MongoDB, the Hashicorp stack, Elastic, Red Hat, MinIO, the list goes on. There are…
The Caddy project is fighting to show it can work. We are having moderate success. I just gave a talk about this a couple weeks ago at an internal company event and will be doing so again at GoWest in a few weeks. The premise is that open source licenses are what they are: they grant freedom, but not other things that companies would pay money for. Proprietary licenses do offer what companies need, but at the cost of…
Sponsorware is/eventually becomes basically ad supported, it's not really a new thing.
Re: Open Source does not win by being cheaper
#109Earlier quoted context omitted.
Apple's mission statement isn't "try to extract as much money from our customers' wallets as possible" or even "deliver the highest profit and value to our shareholders." (Recall Tim Cook's comment on the "bloody ROI.") In fact I'd be hard-pressed to find such a mission statement for a non-financial firm - at least one that doesn't mention any other purpose for the company.[1] It's a mistake to think that companies o…
I think the point is that the stated mission is window dressing on top of the underlying truth. Following POSIWID, all for profit enterprises have making money as their core mission.
I'll caveat your comment with "existing". 90% of businesses will fail inside 5 years and always got the same reason, because they run out of cash.
Unless you are an outlier, and manage to balance revenue with expenses every month [1], you will need to average positive cash flow or you'll run out of cash.
[1] of course if you are small, and tolerate fluctuating pay, then you can balance the books by not taking a salary but taking out all excess revenue each month.
Re: Open Source does not win by being cheaper
#110Earlier quoted context omitted.
> No, a business usually exists to provide some useful good or service to its customers. FedEx delivers packages. Apple makes phones and computers. Etc. What? If Apple or FedEx could get customers to (sustainably) pay them without actually providing a product in return, do you think they would have kept making phones and delivering packages just for the hell of it?
> What? If Apple or FedEx could get customers to (sustainably) pay them without actually providing a product in return, do you think they would have kept making phones and delivering packages just for the hell of it? That's a strange counterfactual. Why would customers keep paying a company that doesn't provide any goods or services to anyone? They're not really "customers" anymore if all that is happening is money t…
I think they were confused why you included the word "usually".