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Open Source and the Challenge of Making Money

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Re: Open Source and the Challenge of Making Money

#31

Post by mamcx »

taylodl wrote: post #18

It's a shame our options have been reduced to a false dichotomy of pay-for software where you have no access to the source, and pay-nothing-for software where all you have is the source. There was supposed to be another option for pay-for software where you have access to the source and may make changes to that source to suite your needs: "free" was supposed to refer to "freedom" and not "cost." But no one seems to h…

Well, that was/is normal in the Delphi ecosystem. You pay for a library and get the source. Also, you get the source for the VLC with Delphi too.

And the vendors that later move to other platforms carry the idea, for example remobjects.com & devexpress.com.

This make sense. Having the source not mean I want to change it.

P.D: But the source is not licensed as open source. So this is the other model

Re: Open Source and the Challenge of Making Money

#32

Post by justincormack »

rmason wrote: post #5

Its extremely difficult to make money with open source. With the notable exception of Red Hat there aren't a lot of open source companies that are known to be consistently profitable. Most of the bigger companies raised money when VC's believed in the open source business model and are still operating on those funds. That's an avenue that is no longer open to today's open source entrepreneurs. One possible exception…

VCs are still funding open source companies. eg Docker. So that avenue is still open (whether it makes money is a different question).

Re: Open Source and the Challenge of Making Money

#33

Post by forgottenpass »

Remember how the open source software movement was supposed to be like Woodstock, with everybody sharing and everything free?

No?

I'll go back and finish the article, but it's starting to look like the something you'd see in a tweet from @nytonit "Building a business around a product you give away is hard and The Times is ON IT."

Re: Open Source and the Challenge of Making Money

#34

Post by drewcrawford »

taylodl wrote: post #18

It's a shame our options have been reduced to a false dichotomy of pay-for software where you have no access to the source, and pay-nothing-for software where all you have is the source. There was supposed to be another option for pay-for software where you have access to the source and may make changes to that source to suite your needs: "free" was supposed to refer to "freedom" and not "cost." But no one seems to h…

The problem is that for-pay software that gives you some freedoms manages to piss off everybody. It's not "open source". It's not "free software". It can be characterized as trying to astroturf your way into free goodwill. And you have minimal real protection against someone cloning your software.

I am currently trying to build a product on this model, because I think it is pragmatic. Not sure how it will work out.

Re: Open Source and the Challenge of Making Money

#35

Post by drblast »

I don't find open source as a product has the benefits we assume it must.

Theoretically, yes, if I have the source every change and customization I want to make is just a recompile away.

Practically speaking that almost never happens because now I'm likely forking a huge code base and almost always abandoning the support contract I paid money for to do so.

Unfortunately, because theoretically speaking anyone can change anything, authors seem to neglect the whole documentation and API portion of open-source software, and that's what I typically want in practice.

Obviously there are exceptions, but most people pay money for support, warranties, integration with existing systems, documentation and available training. All of those things have very little to do with whether the source code is open or not.

Re: Open Source and the Challenge of Making Money

#36

Post by raamdev »

I work on open source software with two other developers and our business makes enough to pay for three full-time salaries (they're low-end software developer salaries, but we all live comfortably in the USA and Mexico).

We sell two WordPress plugins, both of which have free counterparts (think Lite/Pro). The source code is GPL for both versions.

Why do people buy the Pro version of our software? That's we've asked many times over the past few years. I feel they buy the Pro version for both the features and, more importantly, for the fact that it will be _updated_ and _maintained_, and they will have _access to support_. Site owners that want to use one of our plugins recognize that by paying for the plugin they get access to support and features not available in the Lite version, whereas the free version has limited features and only community support.

Could someone copy the source code for the Pro version and sell it? Sure. (And people have.) But can they copy our Pro support and sell that? Not so much. Can they copy our reputation? Nope.

I've learned over the past few years just how valuable "access to support" is for many people. Even if they never contact us, just knowing that we're there _in case something goes wrong_ is comforting enough for them to pay for that comfort.

If more open source projects started offering support, I bet you'd have a lot more open source developers making money.

For example, if I decided to set up `mutt` for the first time to switch over from web-based email, would I buy a "mutt support service" from someone that allowed me to submit `mutt` questions through a ticketing system while I was setting up and getting familiar with `mutt`? Yes! I would, especially if that person had a reputation in the community as someone who knows `mutt` inside out.

It's also worth noting how offering support helps drive documentation. If the documentation is great then a developer can easily point people to the relevant information and save him/herself time (so that support doesn't take up all available time). I basically used this type of "ask me a question, I'll create documentation for it and then reply with a link" method with my Independent Publisher WordPress theme project [1].

[1]: http://github.com/raamdev/independent-publisher

Re: Open Source and the Challenge of Making Money

#37

Post by _stephan »

jeffdavis wrote: post #27

"An entire economy where you gave a little [software] to get a lot [of software] ... it’s time to admit that this idea didn’t work out" If this article was published in 1998, and we revisited it in 2008, we would have concluded that the author was proven wrong by a landslide. The idea that someone still thinks this in 2014, and is confident enough in his opinion to publish it, is ridiculous.

The sentence immediately before the one you quoted is: "Remember how the open source software movement was supposed to be like Woodstock, with everybody sharing and everything free?"

I think the author wants to express that open source has changed a lot from the early days. As far as I remember it, open source originally was driven mainly by students, academics and hobbyists, and by service companies like Red Hat or maybe IBM. Nowadays, many of the larger, successful and enduring open source projects are mainly developed by professional developers working for companies that use the open source software for their commercial products or infrastructure.

Re: Open Source and the Challenge of Making Money

#38

Post by awwstn »

Building a viable business on top of an open source project is totally possible. But, like building lots of other types of businesses, it can be difficult.

These challenges cut close to some things we are aiming to solve at Assembly [http://assembly.com]. One such question we hope to answer is this: "how can people build a real, profitable company in a collaborative, open manner like they build in an open source environment?"

An example is Coderwall, which makes more than $25,000/month [1] and is built and maintained by the community. Each month, revenue goes to the people who are building the product. All the code is publicly available [2], and licensed to be used non-commercially. A core team of contributors guide vision and quality control, but anyone can participate.

It's not exactly open source, but products on Assembly are built in the open and anyone can dive in and help out. Some products have lofty ambitions to make big revenue, and others are are more aimed at being a public offering like a traditional open source project.

[1] https://assembly.com/coderwall/posts/coderwall-coinholder-up... [2] https://github.com/assemblymade/coderwall

Re: Open Source and the Challenge of Making Money

#39

Post by wolfgke »

jeffdavis wrote: post #26
rmason wrote: post #5

Its extremely difficult to make money with open source. With the notable exception of Red Hat there aren't a lot of open source companies that are known to be consistently profitable. Most of the bigger companies raised money when VC's believed in the open source business model and are still operating on those funds. That's an avenue that is no longer open to today's open source entrepreneurs. One possible exception…

Google makes a lot of money from open source. If you take away licensing restrictions, then those business models that depend on licensing revenue are naturally going to suffer. But that's almost a mathematical truth and fairly obvious. But there are lots of other businesses out there that make heavy use of open source software to make a lot of money selling something other than licenses. And those businesses often r…

> Google makes a lot of money from open source.

Google makes a lot of money from advertising.

FTFY

Re: Open Source and the Challenge of Making Money

#40

Post by jeffdavis »

_stephan wrote: post #37
jeffdavis wrote: post #27

"An entire economy where you gave a little [software] to get a lot [of software] ... it’s time to admit that this idea didn’t work out" If this article was published in 1998, and we revisited it in 2008, we would have concluded that the author was proven wrong by a landslide. The idea that someone still thinks this in 2014, and is confident enough in his opinion to publish it, is ridiculous.

The sentence immediately before the one you quoted is: "Remember how the open source software movement was supposed to be like Woodstock, with everybody sharing and everything free?" I think the author wants to express that open source has changed a lot from the early days. As far as I remember it, open source originally was driven mainly by students, academics and hobbyists, and by service companies like Red Hat or…

What in the article lead you to that interpretation?
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