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Ask HN: What's the deal with the "open-source SaaS" trend these days?

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Ask HN: What's the deal with the "open-source SaaS" trend these days?

#1

Post by chdaniel »

Hi HN,

I'm a non-technical founder.

I've built a couple of SaaS companies, many products, etc. Some failed, some allow me to conduct my living.

I'm non-technical so please consider you're explaining this to a Neanderthal:

What's the deal with this increasing trend of open-source SaaS companies?

Sure I know of WordPress and what have you - but what's the implication of e.g. Cal dot com, who's a Calendly alternative, but it's open source and it's clearly a business?

For instance, is it that: • people contribute to it (since it's open-source) and the founders can therefore build a better product... • ...whilst the PEOPLE also get a better free product, if they so choose to run it on their instance?

Is the above true? Because if so, I get it - it's a win-win, and the founders "tap into" a bigger pool of "effort", if that makes sense.

What other implications are there? Thanks so much.

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#2

Post by thinkingemote »

Where is the value of a business? Is it the idea (or ideas written as code) or the execution (or service)?

What do people pay for? The code, or the things the code does?

What is valuable to customers? Is trust more important than the unknown? Is expertise valued?

What other things apart from code makes up a business? For example customer service, marketing, etc.

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#3

Post by chdaniel »

thinkingemote wrote: post #2

Where is the value of a business? Is it the idea (or ideas written as code) or the execution (or service)? What do people pay for? The code, or the things the code does? What is valuable to customers? Is trust more important than the unknown? Is expertise valued? What other things apart from code makes up a business? For example customer service, marketing, etc.

Yepyep - but my question is: what's the spiel? What do these companies get "in exchange for" becoming open-source? What's the incentive?

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#4

Post by HuwFulcher »

It's what you've stated but also there's an ethical side to it. Many founders want to give the option for competent users to self-host, only way to do that is open up the source code. They could go completely down the open source route and rely on donations but that doesn't usually cut it. The business model then is to provide a managed service where the founders deal with the hosting, updating, security, etc.

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#5

Post by a2code »

Consider you are the author of a SaaS. You realize that your product does not have business value in some sense. By open sourcing your SaaS, you minimize the business side and emphasize the technology side. "Look at this cool open-source SaaS I've built. I make for a great Software Engineer."

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#8

Post by comprev »

Some projects have varying licenses to extend their open source product beyond a bare bones system. Some companies pick "open core" license models which lock enterprise features behind a paywall.

For example a collaborative software text editor might require connections to a central database for synchronising the various users. The code to handle these connections might not be available, or at least heavily restricted through licensing from using in a business environment.

The SaaS company makes money by providing the infrastructure to allow users to actually collaborate with others. Until then it's simply a stand alone desktop text editor.

Alternatively the company may offer basic collaborative features which only support one 3rd party auth provider and synchronise via the public internet.

A customer might want on-prem networking only and Active Directory auth, and will pay for these features.

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#9

Post by ErikBjare »

chdaniel wrote: post #3
thinkingemote wrote: post #2

Where is the value of a business? Is it the idea (or ideas written as code) or the execution (or service)? What do people pay for? The code, or the things the code does? What is valuable to customers? Is trust more important than the unknown? Is expertise valued? What other things apart from code makes up a business? For example customer service, marketing, etc.

Yepyep - but my question is: what's the spiel? What do these companies get "in exchange for" becoming open-source? What's the incentive?

They get customers who are developers, who won't settle for closed source, or who want to self-host.

You could read up on the "open core" approach. Gitlab is a good example.

Re: Ask HN: What's the deal with the "open-source SaaS" trend these days?

#10

Post by meiraleal »

chdaniel wrote: post #3
thinkingemote wrote: post #2

Where is the value of a business? Is it the idea (or ideas written as code) or the execution (or service)? What do people pay for? The code, or the things the code does? What is valuable to customers? Is trust more important than the unknown? Is expertise valued? What other things apart from code makes up a business? For example customer service, marketing, etc.

Yepyep - but my question is: what's the spiel? What do these companies get "in exchange for" becoming open-source? What's the incentive?

They can't compete with the closed-source ones. Open source is a very efficient user acquisition strategy. Not as much to turn users into paying customers tho. But it is a way to go from 0 to 1 in a market that otherwise would be very difficult to call attention.
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