The OSS trade-off is market penetration vs revenue from a business perspective. It's successful if the free marketing and adoption is worth the loss of revenue.

The OSS trade-off is market penetration vs revenue from a business perspective. It's successful if the free marketing and adoption is worth the loss of revenue. Both RedHat and SUSE's competition in the 90's were proprietary Unix (e.g. SunOS etc) options. Linux commodified "low-end Unix-like OS" in conjunction with Intel processors. As a thought experiment, imagine them trying to compete against the big UNIX hardware vendors as a pure OS vendor: it would have been impossible, and there are some parallels in the outcomes for BeOS and NeXT. Both RH/SUSE were able to widely penetrate through "cheap distribution", getting their product into the hands of users who then preferred to use Linux - plus it was cheaper. Strictly speaking Open Source is not failed business model because it simply isn't a business model at all. It's a model for licensing software, not how to make money. But, I know what you mean, it does add another level of complexity. However, there are ways to run a model that has many of the advantages while also keeping value in the commercial aspects. For RH/SUSE they have two versions - the free stuff, and their certified distribution. The basic version of that is that their paying customers are primarily slow-moving corporates and the military. While people say they sell "support", a key part of the package is hardware and software certification - they're selling compatibility and stability and certainty. If you're in IT in a Fortune 100 and you want to run SAP, even if your tech team could run Fedora, SAP isn't certified on it, and if things do go wrong do you want to be in that conversation?