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The Almighty Buck

Commercializing Open Source Software 214

CowboyRobot writes "Michael Karels, system architect for BSD 4.3 and 4.4, has an article on ACM Queue about the challenges in trying to make money from open source software. From the article: 'As users of the software, open source contributors have certain common interests in making the software stable and usable.' but 'When additions require modifications to the base system, there may be resistance to incorporating the changes.'"
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Commercializing Open Source Software

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  • but... (Score:3, Funny)

    by taff^2 ( 188189 ) on Wednesday September 03, 2003 @09:05AM (#6858019)
    isn't that why OSS projects get forked?
  • Making Money (Score:2, Interesting)

    by rsmith-mac ( 639075 )
    The only way that companies are really going to make big money off open-source is to in a sense, drop open source. As long as they can sell something that can't be given away(such as the Finder in OS X), there's money to be made. Otherwise, they'll sell support contracts here and there, but no company is going to make it in to the "big time" with just support; even IBM has other buisnesses.
    • Re:Making Money (Score:5, Interesting)

      by turnstyle ( 588788 ) on Wednesday September 03, 2003 @09:18AM (#6858116) Homepage
      This might sound ugly, but making money is important. And it's more than just buying food and paying rent.

      Money can help affect political change, and when coders pass on the chance to make money, they also pass on the chance to affect political change.

      Obviously you can still make a change without money, but it's quite a lot easier if you have some.

      As I see it, when coders are giving their work away for free for professional use by international companies, they are being had.

      • I take it you don't contribute ANY work to ANY open source projects?

        I choose to affect change by passing on the money. By devaluing things others charge money for, you affect change by making it harder for the establishment to compete. Example: If Wal-Mart wants to use your database software on their network you have about a snowball's chance of even finding out about it, much less making them pay. But if everyone has access to that same code, then Wal-Mart has that much less of an advantage in the marketp

        • Re:So... (Score:5, Insightful)

          by turnstyle ( 588788 ) on Wednesday September 03, 2003 @10:43AM (#6858797) Homepage
          "I choose to affect change by passing on the money. By devaluing things others charge money for, you affect change by making it harder for the establishment to compete."

          The change you affect by passing on money is the marginalization of your voice. If instead you took that money and gave all of it to support some cause that you may believe in, you'd be affecting a lot more change.

          And by devaluing things others charge for, you may indeed make it harder for the establishment to compete, but you also make it harder for independents too.

      • Re:Making Money (Score:3, Interesting)

        by Etyenne ( 4915 )

        As I see it, when coders are giving their work away for free for professional use by international companies, they are being had.

        And if the little coder use code Open-Sourced by large corporation, is he "having" them ?

        I think you don't get the gift culture. IBM use the little coder's code, the little coder use IBM code, everybody is happy about it ! That's the point of open-Source : sharing. It goes both way.

        • Re:Making Money (Score:3, Insightful)

          by turnstyle ( 588788 )
          "I think you don't get the gift culture. IBM use the little coder's code, the little coder use IBM code, everybody is happy about it ! That's the point of open-Source : sharing. It goes both way."

          I think you don't get the corporate culture. You may give away your work with good spirit, but when a publicly-traded multi-national corporation like IBM gives away work, it's as a result of a complex set of business decisions.

          In the case of IBM, it's most likely part of a larger anti-Microsoft startegy.

          If y

          • I think you don't get the corporate culture. You may give away your work with good spirit, but when a publicly-traded multi-national corporation like IBM gives away work, it's as a result of a complex set of business decisions.

            In the case of IBM, it's most likely part of a larger anti-Microsoft startegy.

            If you believe that IBM is sharing code from some sort of sense of civic good will, you're mistaken...

            This is irrevelant. The result is the same : I have access, for free, to code contributed by a b

            • "This is irrevelant. The result is the same : I have access, for free, to code contributed by a big corporation. Wether they opened it by goodwill or a complex set of business decisions, I don't care."

              Irrelevant? You're the one that characterized IBM's OS contributions as part of a "gift culture".

              If all you care about is getting something for free, that's your decision. But as I see it, when coders give into an attitude like that, they reduce their share of econmoic power within a lager society, and re

          • If you believe that IBM is sharing code from some sort of sense of civic good will, you're mistaken...

            Why?

            Corporations do lots of things all of the time to make themselves look less like the greedy, blood-sucking, economic parasites they are :-) - Just kidding.

            Actually, corporations are run by people, some of whom like to think that they do more than provide a value neutral link in the economic chain. It makes them more productive and likely to join the company in the first place if they think that an org

            • "In the end, the company and its employees do get rewards from their "sense of civic good will". And this is why the company does it."

              Don't forget tax incentives... ;)

              IBM is a publicly traded company, and its goal is to maximize return-on-investment. If supporting a cause helps better achieve that goal, they will support that cause.

              You're absolutely correct that the people within the company most likely do personally care, but the execs in charge are pulling in tidy salaries for one reason: to make m

        • Re:Making Money (Score:3, Insightful)


          I think you don't get the gift culture. IBM use the little coder's code, the little coder use IBM code, everybody is happy about it ! That's the point of open-Source : sharing. It goes both way.

          That hasn't worked in 90% of the cases. In most cases, the company contributes some software, the OSS community uses it for free, all the time bragging about how the company should be grateful to them, the company starts to lose money and they come out with a non-free special edition, the OSS community gets bitter
  • by turnstyle ( 588788 ) on Wednesday September 03, 2003 @09:07AM (#6858039) Homepage
    So far, I've not open sourced Andromeda [turnstyle.com] because I'm trying to make a living and I don't really believe in most of the here's-how-to-make-money-from-free-software ideas.

    A number of users have suggested that I charge for custom work, but when I ask them if they would ever pay for cutom work, the answer is always no.

    • by kfg ( 145172 ) on Wednesday September 03, 2003 @09:17AM (#6858109)
      I think your product is a good example of why ESR "forked" free software into Open Source(tm) software.

      In the pragmatic world of business some code is more valuable closed and some is more valuable open. At the moment your code is more valuable to you closed so you can sell it and make a living directly from your work.

      There will come a time, however, when if you are going to continue to make a living by peddling your own code you are going to have to produce more product.

      If that product builds upon and enhances what you have already done Andromeda may actually be more valuable to you open.

      Wisdom lies in accurately determining when that line is crossed.

      KFG
      • by turnstyle ( 588788 ) on Wednesday September 03, 2003 @09:23AM (#6858153) Homepage
        "If that product builds upon and enhances what you have already done Andromeda may actually be more valuable to you open."

        Hey, I'm totally open to it -- but so far most of the arguments that I've heard haven't passed the 'real world' test.

        A lot of people look to mega projects like MySQL as success stories, but that's not a likely outcome for most projects...

      • All software is more valuable when Open Source, however it may not be more valuable *to its author*.
        • by kfg ( 145172 ) on Wednesday September 03, 2003 @10:51AM (#6858864)
          But the author likes to eat; and therein lies the dilema.

          We do not reward people for contributions to society ( or I'd be a happy a little camper churning out books for Project Gutenberg), we make our respective livings filching money from each other's pockets.

          Socialism does not change this, unfortunately. It merely changes the pecking order and rules for doing the filching.

          "Grant writer" has become a profession.

          KFG
        • All software is more valuable when Open Source, however it may not be more valuable *to its author*.
          Short term, definitely.
          Long term, ...
          but 'When additions require modifications to the base system, there may be resistance to incorporating the changes.'
          Open Source may be free, but it's not cheap.
    • by Anonymous Coward on Wednesday September 03, 2003 @09:23AM (#6858156)
      You've hit the proverbial nail on the head there turnstyle, old pal.

      Customers are *cheap* !

      They want everything you can throw at them for free, but are unwilling to pay (even modest amounts) for support or customization.

      Yeah! We all know they *should* pay for support and custom code, but get real.

      I have tried this route, honestly. But I fail to see how it can ever work out financially - unless you are blessed with dealing with somewhat different customers from my own (SME thru corporate).

      If you have made this concept work, then please, for the love of Mike, explain to the rest of how you did it.

      And now repeat after me:

      - There is no Open Source business model!
      - There is no Open Source business model!
      - There is no Open Source business model!
      • Obviously a troll, but let's bait for advocacy purpose

        They want everything you can throw at them for free, but are unwilling to pay (even modest amounts) for support or customization.

        False. I am earning a living supporting, customizing and integrating OSS. It's exactly the same thing as if we where selling CSS, except we don't charge for license (and often are able to charge more for service because of that). If your client are that cheap, write them off and concentrate your sales effort on better

      • They don't pay for anything they can get for free.

        I make money, not on support, but on development of extensions to some very specialized software which is the "best of breed" in its limited area. My customers aren't traditionel end-users, but either research institutions or consulting businesses who use my software for projects for their clients.

        There are plenty of free-software business models, and the article does a good job of summrizing them, but there is no business model (based on free software or
    • by Kakurenbo Shogun ( 64436 ) on Wednesday September 03, 2003 @10:12AM (#6858502) Homepage
      I've surprised myself recently by making money on some software I released as open source. Last year, I wrote an RSS parser to display news headlines from other sites on a few of mine. I'd taken a quick look at what was available and couldn't find anything that quite did what I want, so I made my own (CaRP [mouken.com] - Caching RSS Parser).

      Next, I decided I may as well give it away for free to bring more traffic into my site, and eventually decided to release it under the GPL.

      At some point, after receiving many emails asking for help installing it (not everyone who knows how to make a web page knows how to set up a PHP script), it occurred to me that I could give people the option of hiring me to install it for them. A number of people have done so, and I've gotten some custom work from some of them too. I also get great ideas for improving the product when people ask to have it do things it can't do yet.

      Has this experience convinced me to GPL anything else I've written? No. I do have a few other little things I'm giving away free, but I also have a number of products that I won't be releasing that way. Some I previously distributed as shareware, and found that very few people were willing to pay even a very small registration fee. So I switched to giving away a somewhat crippled demo version and requiring payment for the full version.

      I guess the moral of this story is that if a enough users of a product will need someone to set it up for them, and if the price you can charge for setting it up is comparable to what you'd sell it for if you sold it, open sourcing the product can work well. But I don't think open source is the right model for everything--not unless you already have all the money you need and are just developing products for fun.

  • subcriptions (Score:3, Interesting)

    by mschoolbus ( 627182 ) <travisriley@@@gmail...com> on Wednesday September 03, 2003 @09:08AM (#6858045)
    I think offering Subscribtion services is about the best way to make money with open source (Transgaming, Lindows, Slashdot?, even tech support).
    • Re:subcriptions (Score:4, Insightful)

      by Rogerborg ( 306625 ) on Wednesday September 03, 2003 @09:54AM (#6858351) Homepage
      Why?
  • by jlemmerer ( 242376 ) <xcom123 AT yahoo DOT com> on Wednesday September 03, 2003 @09:10AM (#6858066) Homepage
    many free programs pay off for the developers because they charge for support. without proper support software is often not worth considering for many organisations, so that's a convenient way to raise funds for further development. Even more i don't think that making certain changes for money is a bad idea (as long as it doesn't compromise other parts of the program or makes it incompatible to prior versions), for all of the users will profit from it, the buyer gets what he wants and the developers get money they need to further develop the program.
    • I agree that support can be a big source of income, but my idea of a good computer program is that it should be so easy to use it doesn't require any support. What do you do then?
      • Well it depends on what the software is and what it does. OK sure a spreadsheet should be easy to use and not require much support. Unless you are talking about custom macros or whatever. But say a large scale database will need support and custom work.

        The thing is that it is posible to get a company to spend money to improve a piece of infrastructre like the linux kernel or mysql if they need that for other things. But only once the thing is getting to the point where it is basicly usable. While DEC had 2
      • What do you do then?

        Starve. ;)
    • by turnstyle ( 588788 ) on Wednesday September 03, 2003 @09:36AM (#6858225) Homepage
      Charing for support is one of the popular ideas abouthow to make money from free software, but have you ever actually tried it?

      The fact is, most support is of the getting-started variety. Do you expect those people to pay for support *before* they have their software working? Or do you help them get set up for free, after which they have little need for support?

      And if somebody writes to ask: "hey, quick question" Do you reply, sorry, but that'll be $5 first.

      • "The fact is, most support is of the getting-started variety. Do you expect those people to pay for support *before* they have their software working? Or do you help them get set up for free, after which they have little need for support?"

        Generally, the software and the support is sold as a package -- so yes, people are expected to pay for support before they have their software working.

        You are confusing Free expression with Free beer.

        • "Generally, the software and the support is sold as a package -- so yes, people are expected to pay for support before they have their software working.

          You are confusing Free expression with Free beer."

          Perhaps you have been drinking too much Free beer, I'm not confusing anything.

          It seems you might be missing the point. You're a software dev. Do you help people get started for free? If you do, you've lost the main chore that somebody needs support for. And if you refuse to help them get set up for fre

          • Exactly. It's like the IT downsize syndrome.

            Have you heard the stories about the sysadmins whose systems rarely (if ever, and then usually it's hardware failure) crash because they do a lot of preventative maintainence, etc? The higher ups don't think they're doing anything and then give them the boot.

            Same thing here, in a way. You set up their software for free (which is, for the most part, 99% of the support base. Upgrading (if necessary) is another hurdle).
            "OH great!" they say and write you a check
      • Charing for support is one of the popular ideas abouthow to make money from free software, but have you ever actually tried it?

        Yes. That is how I am currently earning a living. My employer is a Linux integrator. Since mark-up on selling CSS is so ridiculously low, there is no point in generating profit for another business (the software manufacturer); you are better to work toward grabing a bigger chunk of the customer's money by selling service instead of license. In case you wonder, my employer i

        • "What exactly is so unusual about this business model?"

          Well, for starters, have you entirely written off the consumer market?

          Your company may indeed benefit by selling services based on work originally done by other developers. IMHO, those developers made a mistake by choosing to give away their work so that your company can profit from it.

          • Well, for starters, have you entirely written off the consumer market?

            Granted. I personnally don't think it is an interesting market anyway. If you plan on doing money selling software to the consumer market, you are in for a rough ride considering how the market is saturated.

            However, I am sure it is possible to adapt the model to fit the consumer market. I don't have access to Transgaming financial report, but they seem to be doing ok selling a service to the consumer market while contributing all

      • Christ mate, someone likes you!

        Anyway, to answer the question - yes. We get paid to support OSS servers, VPNs websites and applications. Sometimes we have developed these applications which themselves are "open sourced" (Axyl) and are used as a solution to propose to our clients.

        Sometimes we use a specific tool (like Lucene) which we want an enhancement made to. We get our developers to enhance it and pass the code back to the project. Everyone benefits, including our customer.

        So, your model works for yo
    • And here's my problem with that. Sellers want products that need to be supported. I'm not interested in writing those apps. I'm interested in OSs and apps that work, and are documented well enough that I don't have to pay someone to tell me where the Any Key is.

      Joe IT: So, why should I switch to this lunix thing?

      Vendor: It's really stable and cheaper to deploy!

      Joe IT: Uh, how do make your money?

      Vendor: Um, by selling you support.

      Joe IT: At least Microsoft don't bullshit me when they're fucking me u

    • To paraphrase an executive of Trolltech, "why should we base our business model on crappy software? Our goal is to create software that doesn't NEED support."
  • The reason (Score:4, Interesting)

    by Kleedrac2 ( 257408 ) <kleedrac@@@hotmail...com> on Wednesday September 03, 2003 @09:12AM (#6858074) Homepage
    The problem comes in the nature of the beast. It's like art really. Artists perform their art because it makes them feel good to share. And they want everyone to be in on it. The same can be said of Open Source. People code Open Source cause they want to not only create something for themselves, but to give it to the world. The problem comes in, about the same time as it hits the artist, when they want to put more time and energy behind their creation. They start to realize that the only way to dedicate more of their lives to this brain child of theirs they can't be bothered by things as mundane as work, or bills. The only solution is to make their brain child their job!! But because of things like the GPL, they've effectivly shot themselves in the foot. They can no longer sell their brain child. They can't even offer it for a measly $20 unless there's something else they can give with it. Thusly the support angle. Why do people go out and pay $60 for a copy of Red Hat when they can download .iso's or do an FTP install? Because if they pay, there's some guy who's sitting by a phone, and he's perfectly willing to help them when they fuck it up. If more OSS coders went non-OSS, and offered the source to purchasers through some new liscencing system the OSS movement would die though. I didn't say I had a solution, only that I think I have some insight as to the problem.

    Kleedrac
    • GPL *can* make money (Score:5, Informative)

      by varjag ( 415848 ) on Wednesday September 03, 2003 @09:50AM (#6858315)
      > But because of things like the GPL, they've effectivly shot themselves in the foot.

      If you dare to read the article, you'll find an amazing way of making money off GPL (look for 'Dual Licensing').

      GPL requires the derived work sources to be published under the same license, which is unacceptable to many businesses. However, one can always bargain with author for separate license for their specific project.

      Anecdotal evidence: I was involved in a proprietary project where we needed a very specific functionality. The opensource library doing just what we needed was there, but licensed under the terms of GPL. The contact with author revealed that he is perfectly willing to relicense it for us for a nice amount of $35000. And it really was an OK price because reimplementing the necessary functionality from scratch would cost the company considerably more, and we wouldn't fit into the timeframe anyway.
      • Anecdotal evidence: I was involved in a proprietary project where we were using a GPL app (ezsetup). As part of creating a Windows CE installer, it links a GPL'd self extractor stub against your application in a single exe. We were uncomfortable with this and offered the author money for a non-GPL binary license, i.e. just a license to use a non-GPL version of the exe, not any rights over the source.

        He refused.

        More specifically, he couldn't understand our problem. "You're OK to use it under the GPL,"

      • When are you guys going to get it through your head, Dual licensing DOESN'T WORK!

        Why? Because the whole point of open source is that lots of developers can contribute. But, once they do, you don't have permission to release the version with all the cool new features and bug fixes contributed by all those other coders under some other license of your choosing.

        The only version you can sell is the original, buggy, less featured version. The one for which you are the sole contributor. Who would want that?

        I
      • Dual copyleft/proprietary licensing may work for development libraries (Qt, Sleepycat), but I don't know of one example anywhere of it working for end-user software.

        As a developer, the GPL says that everything I write using a GPL library is a derivative work. I either buy the proprietary license or I am forced to GPL everything I create. But as a user, no images I create are derivative of GIMP, no emails I send are derivative of Evolution, and no documents I create are derivative of AbiWord.
  • by edwilli ( 197728 ) on Wednesday September 03, 2003 @09:16AM (#6858099) Homepage
    I believe in open source (or at least want to). But I think money rules in this world. If you look at other forms of Media and Art, giving stuff away won't get movies like Matrix made.

    This is not to say that there are not many, many very good independent films. I'm just saying that maybe Linux and other Open Source projects are trying to hard to get the wrong market.

    With "limited" resources a focus should be made to take the server market from M$, drop the GUI crap, Linux WON'T win on the desktop (at least not yet). But can easily win on the server.

    Michigan Photography [markscarlson.com]
    • I agree with the parent. There are only so many Blair Witch Projects [blairwitch.com] one can take!
    • I believe in open source (or at least want to). But I think money rules in this world. If you look at other forms of Media and Art, giving stuff away won't get movies like Matrix made.

      Fine. But software is not media or art. It is functional.

      This is not to say that there are not many, many very good independent films.

      What do independent films have to do with open source software? Just as there are independent filmmakers, there are independent software vendors (ISVs). But that doesn't make them ope

    • I think you need to distinguish between two different kind of artefacts. One kind is like the movies themselves each expression is new. Very little actual footage is shared between two movies. The other is more like the art of making movies, where ideas and knowledge about how to make a movie and what works is constantly refined and passed on.

      Now what is software most similar to? Movies, or the art of making movies?

      Some software is clearly similar to movies, this is especially true for many modern gam
    • "With "limited" resources a focus should be made to take the server market from M$, drop the GUI crap, Linux WON'T win on the desktop (at least not yet). But can easily win on the server."

      This statement shows that you don't get it, and I don't know where to begin..

      I don't use Linux on my desktop because I think it will win or whatever.. I use it because it does what I need, and I suspect most people who use a Linux desktop use it for the same reason.

      And who are you talking to when you say "drop the GUI
  • An opinion (Score:5, Interesting)

    by Vexalith ( 684137 ) on Wednesday September 03, 2003 @09:18AM (#6858117)
    Perhaps we shouldn't be trying to commercialise OSS. Perhaps we should be trying to commercialise the businesses and products/services which rely on OSS.

    For example if I set up a cybercafe and write some software to deal with scheduling and billing, I'm not looking to make money from it. Instead I'm looking to make money from the business that relies on it. Providing a service is what is going to make me the money, and by opening the source of my billing software I may find a wealth of people willing to help me improve it and to use it themselves in other commercial products which pay their bills (and not mine). I get free upgrades and enhancements and they get the basis of a product that runs their business.

    It's just an idea, and I'm no economist, but I have a feeling that this sort of set-up could work in many situations.

    The key is educating companies in to believing that it's their (civic?) duty to contribute back to the OSS products they use. For example, if every business that uses Linux and has more than 1000 employees were to donate the time of one employee to improving Linux (working full time in the OSS community), we'd see pretty rapid improvement. People are begining to catch on (IBM, Red Hat...), but more of the same would be nice, IMVHO.
    • Re:An opinion (Score:2, Interesting)

      by bhima ( 46039 )
      Another take on this theme would be that it is a community resource and deserves public funding
    • Re:An opinion (Score:2, Interesting)

      by Serapth ( 643581 )
      For example if I set up a cybercafe and write some software to deal with scheduling and billing, I'm not looking to make money from it. Instead I'm looking to make money from the business that relies on it. Providing a service is what is going to make me the money, and by opening the source of my billing software I may find a wealth of people willing to help me improve it and to use it themselves in other commercial products which pay their bills (and not mine). I get free upgrades and enhancements and they
      • You have a point in that opening up source can give you a disadvantage by benefiting your competitors, and you may be right in your particular case. However, I think it is a relatively unusual situation. Even in your company, I imagine that not all the software you use is custom industry-specific applications. Probably most of the rest of what you use you buy in, and that's one area you could look at whether you would be better bringing in OSS and customising it to your needs.

        Another question is whether y

      • Re:An opinion (Score:2, Insightful)

        by ichimunki ( 194887 )
        What if that software you designed to make your business more efficent is released open source, and your competitors start using it. If you depend on that software as a competitive advantage, then you'd be stupid to give it away to your competitors. But unless you patent the underlying business methods implemented in your software this isn't much of a competitive advantage in the first place. I would certainly hope in your example that your senior managers have something better up their sleeve than your so
    • Re:An opinion (Score:3, Insightful)

      by Rinikusu ( 28164 )
      Duty? Fuck that. Nazi Germany was full of "duty" and look where that got us. The "PATRIOT" act is full of duty and look where we're headed. I'd prefer people to keep their idealogies OUT of my software and trying to impose some sort of "civic duty" upon users of OSS software would be disasterous. A lot of people (including myself) work on OSS because we enjoy it, not because we feel a commitment to any sort of movement or to any sort of "duty".

      If people started making it a DUTY to contribute back to a
    • Who is "we"?

      I'm an OSS zealot, and I'm not trying to make money off it. I make money off my leet skillz developing software, and use OSS as a tool for that. I've contributed to several projects, as many others have, and it works just fine for me.

      I suspect many of those trying to commercialize it aren't grass roots OSS people. I suspect they are business folks who see free software as something for nothing - something that's ripe for exploitation.

    • The service industry is a good idea and one that works well for both large and small scale, but the raw product used to provide the service has to come from somewhere. A large proportion of small businesses can't afford the time and expense of one person dedicated to performing the "civic duty" since that person would require payment on a level equal to or greater than the remainder of the employees. Only in India do programmers work cheaply, not here in the U.S.

      Second, it is necessary to overcome the comp
    • I must strenously disagree. Why must software always be treated as some foreign concept that must not follow the business models of other industries? You don't see cybercafe's growing and milling their own wheat, so why should you expect them to code their own software?

      Someone needs to write that software for the cybercafe. But why does it have to be their chef? Surely a professional programmer would create the better software, but if he can't cook, are you going to fire him once he finishes writing it?

      Yo
      • I must strenously disagree. Why must software always be treated as some foreign concept that must not follow the business models of other industries? You don't see cybercafe's growing and milling their own wheat, so why should you expect them to code their own software?

        So many of the problems we see come about precisely because the software industry tries to mimic the business models of other industries. Faulty anti-piracy "protections," incompatable implementations and software that breaks standards,

  • it's really easy (Score:5, Interesting)

    by dcordeiro ( 703625 ) on Wednesday September 03, 2003 @09:33AM (#6858205)
    1 - develop a application ( you know how to do it, no ?
    2 - try to "sell it" to as manny organizations as you can (for free).
    3 - Make a contract with those organizations (for maintenance, bugfix, feature add)
    4 - make it available to the world as open source.

    What the organizations get:
    1 - A "free" software. Maybe not the best there is, but sometimes they need months to decide on what to use (because it costs a lot of monney), but they need something now. There comes your program. And believe it or not, most times, your program will be the "final one".
    2 - Direct contact with the developper
    3 - A rapid deployment.
    4 - Low risk (if you don't charge much for your software

    What you get:
    1 - costumers !!!
    2 - flat fee revenue (aka you know what you're going to get in the end of the month)
    3 - going open source enlarges your app "possible customers" universe.
    4 - You can still get lot more customers with onsite or remote support for instalation, bugfixing, feacture adds.

    What the world gets:
    1 - Open Source Software :)
    2 - open source software development backup up with real money.

    I adopted this in the last 3 years, and its working great :)
  • by Anonymous Coward on Wednesday September 03, 2003 @09:47AM (#6858290)
    I've always thought that ghostscript had a neat idea in that the latest version is released under a different license and older versions are GPL'd. Why not charge for the most recent version with the newest features and release old versions with lesser functionality than the current as free and maybe even in the public domain. If there's not money to be made on old outdated software, why not release it free and open source? Sure, you might make a few less dollars, but you'll make yourself a lot of new customers in the process, too. I know there's always shareware, but it tends to be severely crippled and has a 30 day time limit on it. The point is, charge for the newest major features, and release older and fully funtional versions to the public free and open sourced.
  • by Anonymous Coward
    Red Hat makes it's money from support from Corporations, it may have trouble turning a profit right now, but when the marketshare expands even more, then I don't think they have much trouble. Red Hat has a good buissness model, their pricing scheme maybe a little shaky but I think it will change. Perhaps what they should do, is have releases every two years instead of one, support both releases, then in another two years drop support for the old one. That way you'll get a good four years out of a product.
    • Red Hat makes it's money from support from Corporations, it may have trouble turning a profit right now, but when the marketshare expands even more, then I don't think they have much trouble.

      Yes but red hat makes their money off of other peoples work. In fact they are part of the problem, the coders that worte the software contained in the Red hat Dist have to compete now with red hat for "services", and redhat didn't have to write the software. Red hat and the other distrubutions are examples of fre

      • Hold on now - many programmers (myself included) don't have the time or inclination to provide service on a global basis; Red Hat does, and my hat is off to them for filling that niche that many of us can't or won't fill.

        Time is precious, and programmers should be able to spend it how they like - without being required to maintain what they build, if they so choose.
  • by kraksmoka ( 561333 ) <grant@gra n t s t e r n.com> on Wednesday September 03, 2003 @09:54AM (#6858350) Homepage Journal
    selling free software is necessary solely from the standpoint of mainstream acceptance. i think that's fine by the way, but i hope you all get the idea.

    people have been trained to do two things with software, purchase and steal. i cannot begin to tell you how many requests i get for office or windows cd's from people who don't wish to pay for it. fact is, mainstream computarded L-users feel better when they've shelled something out for the software, even if it is free. like carnies, we have to take advantage of the marks, because they ask for it, and wouldn't be entertained otherwise.

    beyond that, i wish that lycoris would put OO.O on their distro, just so i could hand out disks of their stuff and not tell anyone what they're getting, let them use the stuff and be happy, like the most illiterate of my clients who get free software every time they ask for a crack.

  • by Robert Osfield ( 703947 ) on Wednesday September 03, 2003 @09:55AM (#6858360)
    I am stunned that people of some many are skeptical on how FSB's coud work. They can and do work very well.

    I have been successfully running my own Free Software Business for the past 2 1/2 years. Every quater I hit or exceed my targets, and comfortably in profit - might not be rich but certainly have perfectly viable long term business.

    My company provides consultancy, support and training ontop of the open source project I lead. The key to success is that the project competes well in terms of functionality and robustness with equivilant commericial products, and that you provide the services that the market requires ontop of that product.

    FSB's really are little different than conventional companies, if you provide and product or service that the market want at a price that is reasonable for the customer, yet profitable to provide, then you're in business. It really is very simple. Robert Osfield.

    • So what Free Software do you make? What market do you compete in? What is the name of your company? Web site? What real business owner can resist a little free publicity?

      Note than I am only half-heartedly calling your bluff. I am really hoping that you aren't. I prefer Free Software, but the overwhelming majority of software companies (and by extension job oppurtunities) I see could not exist on service and support contracts alone. It is always nice to hear the specifics of a Free Software business success
      • > So what Free Software do you make?

        The OpenScenGraph - its an open source scene graph, which takes an OO approach to doing real-time computer graphics.

        >What market do you compete in?

        The main markets are Visual Simulation, Virtual Reality, Games and Scientific Visualization.

        > What is the name of your company?

        OpenSceneGraph Professional Services, based in Scotland.

        > Web site?

        http:://www.openscenegraph.org

        The is also http://www.andesegineering.com which is a partner company that a

  • This is a terrible slashdot article, no hype, no good in-jokes, no mindless "____ is the next big thing".

    Next you'll expect slashdot readers to actually learn something about the history [multicians.org] of computing [arl.mil], and the basics of computer science [stanford.edu], and information technology [www.isbn.nu].
  • POPFile is open-source donationware, if you like it you can send me money, and lots of people do.

    It's the best of the shareware and open-source models combined. POPFile is released under the GPL so it's free as in speech software and free as in beer. But people who appreciate POPFile can send in donations.

    John.
  • There are many companies that sell their source along with their product. Qt comes to mind. Qt is open, in the sense that the source can be viewed and compiled by the client, but it's not free. Trolltech can benefit from bug reports sent in by clients, but the client can't modify and release the source(at least with the commercial licence).

    So, open source can be sold. Whether free software can make money, that's another story all together.

  • ObSCOJoke (Score:4, Funny)

    by Sven Tuerpe ( 265795 ) <sven.gaos@org> on Wednesday September 03, 2003 @10:26AM (#6858620) Homepage

    Making money out of open source software is so simple:

    1. Pick a project [google.com]
    2. Claim that it contains your intellectual property [sco.com]
    3. Give a PPT [microsoft.com] presentation in Greek [utk.edu]
    4. ???
    5. Profit! [yahoo.com]
  • it's possible (Score:4, Informative)

    by cr@ckwhore ( 165454 ) on Wednesday September 03, 2003 @10:32AM (#6858686) Homepage
    IMHO, it is possible to make money with open source software. The secret is coming to the realization that you aren't going to make any money by packaging the software and selling it in boxes. OSS software is available for FREE, so why would a customer pay for it in box when he/she can get it for free elsewhere? Obvious point, I know.

    So, how does one make money with OSS? Services. Granted, incorporating and building paid services around your open source software may not be simple in all cases, it can be applied very well to certain types of open source software.

    For example, lets look at the CMS arena... lets say that I have a OSS CMS called "Cow". I make Cow available for FREE to anyone that wants it. BUT... Cow, being the sophisticated piece of software that it is, requires a web server with certain dependencies. Some people will be able to setup Cow and run it on their own web servers and some won't. There's the opportunity for service #1... specialized hosting for the Cow CMS. You can charge $$ for specialized hosting of Cow CMS based websites.

    Since our fictional CMS (Cow) would be modular, you as the developer could make highly advanced and highly functional modules available to end users for $$. Perhaps they need a eCommerce module with some advanced capabilities. Perhaps they need a specialized payment gateway. There's opportunity #2.

    Lets say that Cow CMS has grabbed the attention of a few big web sites. Now, you have some real commercial entities showing interest in the CMS. Opportunity #3 ... consulting. offer consulting services (for $$) to guide customers through custom module development, implementation, design, etc. Perhaps you could even offer high level technical support for $$ -- opportunity #4. Web design services for the Cow CMS -- opportunity #5.

    See, I think it is possible to make $$ with open source software by adding services of real value around the software.

    A few random thoughts for the "services approach":
    1. The software has to be good and have at least the majority of functionality of commercial competitors.

    2. The software should be able to run on the windows platform.

    3. The UI should be of commercial quality.

    4. Not every type of OSS software will lend itself well to the "paid services" approach. CMSs are a good example, as would be any type of specialized vertical market software, such as Medical Practice Management systems.

    5. You need to understand your market! Understanding your market means you'll understand which services would be of real value.
  • by dentar ( 6540 ) on Wednesday September 03, 2003 @10:48AM (#6858839) Homepage Journal
    The money is in integrating the things and making it work for people.

    The other money is in CUSTOMIZING. People have a demand for stuff that works only for their situation, and demands an in-person presence that indians (in india, that is) cannot satisfy.

    There's not a huge profit margin in selling commercial packages anyway, but about the same amount of time is spent making them work. SELL YOUR TIME!

    (Don't buy the commercial vendors "TCO" arguments..)

    Most of my clients are all too happy to get away from "license" payments. They want to spend money for actual value, and a "license" isn't an actual value, other than for the "privilege" of running a software package.
  • Claim IP infringement, sell antidote licenses.

    Why are you looking at me like that? :D
  • License matters (Score:2, Insightful)

    by thujone ( 652629 )
    It's funny reading some of the /. readers ... you'd think that nothing but the GPL exists. Case in point. Apple is making money off of FreeBSD's technology. And likewise, some of the FreeBSD folks are making money by working for Apple. Granted, it took a long while and a lot of hard work for that sort of arrangement to happen -- but it shows what CAN happen... and if you can live through the lean years, there is light at the end of the tunnel. Try sticking by what you believe in, what makes your consci
  • When you borrow $150,000 to write free software and a company starts expecting you to maintain tons of extra code they need to make money on it, you're better off not writing the software in the first place.

    You can write free software but you can't devote yourself to maintaining someone else's bottom line for free. Unfortunately, most companies use this against you and you find you can't get a job anywhere.

    Had one company do that. They were royally pissed and went out of business because we didn't maint

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