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Making Money from Open-Source Software

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Re: Making Money from Open-Source Software

#21

Post by yesimahuman »

usaphp wrote: post #13
yesimahuman wrote: post #9

For others looking for ways to monetize open source, we’ve learned at Ionic that many enterprises aren’t just looking to buy a premium version of your OSS project, they want your help solving (with software) a ton of related challenges around the technology/space, too. The big money is in doing those things too and not just being one small piece of the puzzle. So, for us, that means helping teams be successful with a…

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own)

Support is tablestakes for B2B so this isn’t unique to OSS

Re: Making Money from Open-Source Software

#22

Post by marpstar »

yesimahuman wrote: post #21
usaphp wrote: post #13

Earlier quoted context omitted.

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) S…

Sounds like fixed-price consulting to me.

Re: Making Money from Open-Source Software

#23

Post by capkutay »

yesimahuman wrote: post #21
usaphp wrote: post #13

Earlier quoted context omitted.

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) S…

yeah what you're describing is almost a textbook example of enterprise services/consulting that companies like Oracle/IBM/HP have been doing for decades.

and what you're describing was also debunked as a scalable core business model by many companies...

https://a16z.com/2014/02/14/why-there-will-never-be-another-...

Re: Making Money from Open-Source Software

#24

Post by yesimahuman »

capkutay wrote: post #23
yesimahuman wrote: post #21

Earlier quoted context omitted.

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) S…

yeah what you're describing is almost a textbook example of enterprise services/consulting that companies like Oracle/IBM/HP have been doing for decades. and what you're describing was also debunked as a scalable core business model by many companies... https://a16z.com/2014/02/14/why-there-will-never-be-another-...

Actually our particular model is more like the OSS as a service he gets to at the end, but it’s unique to us and so my original comment was more broad strokes.

A lot of the software our customers pay us for is _not_ open source but fits in with the open source in a really natural way (and we’re on the frontend/mobile). We also don’t see support standalone, you only get it in tandem with the software subscription.

“Support” is a loaded term. Every B2B company has to have a team able to support their biggest customers and you’d be dumb to not charge extra for it. I don’t think the shape of our support is that much heavier than any B2B SaaS company today and our high gross margins just on support further prove that (but it’s not our core business).

So far the model is scaling. Can it scale to be another public OSS success like red hat or mongo? We’d like to think so but we’ve got a long ways to go still on that.

Re: Making Money from Open-Source Software

#25

Post by yesimahuman »

marpstar wrote: post #22
yesimahuman wrote: post #21

Earlier quoted context omitted.

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) S…

Sounds like fixed-price consulting to me.

No, it’s more like a SaaS model. Yearly subscription/license and you’re not doing bespoke development

Re: Making Money from Open-Source Software

#26

Post by ultrasaurus »

Fun timing, we're about to publish an update on how we've done it (last mentioned in 2016 https://blog.sentry.io/2016/10/24/building-an-open-source-se... ).

The #1 piece of advice I could give is standard b-school boilerplate: figure out what your unique advantage is and how the market wants to pay for access to it. That might be training, support, SaaS or paying for features but you have to do the legwork.

Re: Making Money from Open-Source Software

#27

Post by krn »

marpstar wrote: post #22
yesimahuman wrote: post #21

Earlier quoted context omitted.

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) S…

Sounds like fixed-price consulting to me.

> Sounds like fixed-price consulting to me.

Is there no difference between technical support and consulting?

I see technical support as answering emails and picking up the phone when someone needs the help using your product.

For instance, AWS Support Plans[1].

[1] https://aws.amazon.com/premiumsupport/plans/

Re: Making Money from Open-Source Software

#28

Post by yesimahuman »

krn wrote: post #27
marpstar wrote: post #22

Earlier quoted context omitted.

Sounds like fixed-price consulting to me.

> Sounds like fixed-price consulting to me. Is there no difference between technical support and consulting? I see technical support as answering emails and picking up the phone when someone needs the help using your product. For instance, AWS Support Plans[1]. [1] https://aws.amazon.com/premiumsupport/plans/

Yes there is s huge difference. One is a yearly subscription and the other is billed per-hour or is a set of consumable hours you buy one-off. Most teams don’t just sell support on its own, you only get it if you have a subscription to the software product behind it.

Re: Making Money from Open-Source Software

#29

Post by denniskane »

I hate the concept of money. It needs to die a painful death. Business-as-usual is killing the planet and all future generations. Starting up a planet-saving model of business-as-unusual is why I started hacking on "Linux on the Web" [1] over 6 years ago. It is now quietly starting to take over. I think we all knew Linux was going to eventually do that anyway.

[1] Online now at https://linuxontheweb.org/desk.os

Re: Making Money from Open-Source Software

#30

Post by ohiovr »

Would offering a “subscription” improvement program be a viable alternative? You the developer are the expert on the software, and hiring the original developer to modify or tweak the code may make sense, But make it a reoccurring fee kind of like a subscription. You could offer services based on the intensity of the work. Perhaps one subscription offering differs from another by the total max hours. Like the gold plan would be 40 developer hours per month and silver be 30 or whatever. You would have to feel out what kind of commitment could be there.

But it can be nice for you that those hours are max. If they don’t ring you up at all you still pocket the money for that month.

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