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There are two kinds of companies for whom OSS makes sense. The first category of OSS company is the data driven companies. Twitter, Google, Yahoo, and Faceboo

There are two kinds of companies for whom OSS makes sense. The first category of OSS company is the data driven companies. Twitter, Google, Yahoo, and Facebook all fall into this category. Data driven companies derive their primary business value from the quality and quantity of their underlying data. They give away their software because it is free PR, endears developers to their platforms and it is a big morale booster for their engineers. Google will never give away its search index. Facebook and Twitter will never give away dumps of their graphs. Those things are the crown jewels, not the software that supports them. The other kind of company that benefits from open source is companies like Red Hat, Basho and Opscode. Their open source offerings are loss leaders intended to stimulate enterprise sales. Mission critical systems get built on the open source software, and then managers can elect to buy enterprise features and support from the vendors.

eitally 16y ago
You're missing a category. Lots of big, non-IT-centric enterprises SHOULD contribute to OSS projects because they're already using and extending them (whether it violates the license or not) and it really, really pisses off corporate developers when they're told they can't release internal code into the wild. Totally demotivating.
- fragmede 16y ago
  The keyword being non-IT-centric. IT projects, OSS or not, should not be a business focus in that case. Best Buy's IdeaX (http://bbyidx.com/ http://bbyidx.com/) would be one of the first things that comes to mind as an example in this category.
  - eitally 16y ago
    I know where you're coming from with that comment but I don't necessarily agree. Each year, information systems become a bigger and bigger differentiator on the business side and should be a business focus. Maybe when you said "IT projects" you meant projects where IT is the customer, and if so I still don't agree. These tend to be "luxury" projects for a lot of companies and, as such, the developers tend to have a lot more decision making authority than on business projects. Letting them open source their code or contribute to existing OSS projects is a huge motivator (especially if the OSSed project gets popular and the company starts reaping the benefits of additional contributors).
- deleted 16y ago
  [deleted]
- dnsworks 16y ago
  I'm not sure I've ever heard anybody complain about not being able to get their code away. Have there been any studies which show that a majority of developers wish they could give their code away?
  - lsc 16y ago
    Not that I know of, but anecdotal evidence about satisfaction aside, think of the economic incentives. If I write a patch that improves an open-source product to better serve the needs of my employers, and I don't release it, the only benefit I receive is praise and/or bonuses (yeah, right) from that employer. It really isn't much of a big deal, I'm just doing my job. As the business folk would say it doesn't really "move the needle" of my personal career. If, on the other hand, I do the same work and I release it back into the wild, assuming my patch isn't stupid, I gain some respect from people who are likely to help me in the future, and more importantly, I gain a way to prove that I know how to use and modify open source software at my next interview. I raise my market value. Now, I can see why an employer might object to an employee releasing those changes... but for the employee, getting to publicly release code has some rather large economic advantages vs. just writing and using the same code internally.
    - davidw 16y ago
      Also, if you maintain your own, modified version of something, it can get pretty hairy as it starts to diverge from the main open source one. That divergence can cost time and money.
blantonl 16y ago
a fantastic example of open source software being pigeon-holed.
- moonpolysoft 16y ago
  The topic is about companies doing OSS. These are the types of companies I see deriving value from OSS. Feel free to contribute more.
muhfuhkuh 16y ago
"Their open source offerings are loss leaders intended to stimulate enterprise sales. Mission critical systems get built on the open source software, and then managers can elect to buy enterprise features and support from the vendors." It's even simpler than that. They give away the source and simply sell the support contracts, to both big and small customers (Red Hat does quite a bit of small-mid business sales). But, to go even smaller than Red Hat, there _is_ value to open sourcing your "crown jewels", and making it up in other ways. Wordpress and Digium (Asterisk VOIP developer) are two off the top of the head that profit very well from their completely open-source core competencies. MySQL did so well they were bought by Sun (now Oracle) for US$1 Billion, and Trolltech makes about US$30 Million for Nokia marketing Qt toolkit for embedded, which is a niche of a niche. There are others out there that are sustaining a business based solely on open source software, such as Jaspersoft and SugarCRM. Hell, Motorola just bought that company that makes Cappuccino just yesterday, so there has to be some value to it, for sure.
- runT1ME 16y ago
  Digium makes a lot of money? I haven't heard much about their financials...
gaius 16y ago
It's interesting to see what Google doesn't give away. MapReduce gets all the press, but (AFAIK) it's only Hadoop (Yahoo) that's open source. Similarly the Linux distro they use on their internal machines and their rumoured custom highly-optimized kernel. BigTable is not open source. Google File System is not open source. Even Google recognizes that there actually is business value in "commodity" code, and I'd argue that their open source efforts are intended at least in part to distract from this.

eitally 16y ago

You're missing a category. Lots of big, non-IT-centric enterprises SHOULD contribute to OSS projects because they're already using and extending them (whether it violates the license or not) and it really, really pisses off corporate developers when they're told they can't release internal code into the wild. Totally demotivating.

fragmede 16y ago
The keyword being non-IT-centric. IT projects, OSS or not, should not be a business focus in that case. Best Buy's IdeaX (http://bbyidx.com/ http://bbyidx.com/) would be one of the first things that comes to mind as an example in this category.
- eitally 16y ago
  I know where you're coming from with that comment but I don't necessarily agree. Each year, information systems become a bigger and bigger differentiator on the business side and should be a business focus. Maybe when you said "IT projects" you meant projects where IT is the customer, and if so I still don't agree. These tend to be "luxury" projects for a lot of companies and, as such, the developers tend to have a lot more decision making authority than on business projects. Letting them open source their code or contribute to existing OSS projects is a huge motivator (especially if the OSSed project gets popular and the company starts reaping the benefits of additional contributors).
deleted 16y ago
[deleted]
dnsworks 16y ago
I'm not sure I've ever heard anybody complain about not being able to get their code away. Have there been any studies which show that a majority of developers wish they could give their code away?
- lsc 16y ago
  Not that I know of, but anecdotal evidence about satisfaction aside, think of the economic incentives. If I write a patch that improves an open-source product to better serve the needs of my employers, and I don't release it, the only benefit I receive is praise and/or bonuses (yeah, right) from that employer. It really isn't much of a big deal, I'm just doing my job. As the business folk would say it doesn't really "move the needle" of my personal career. If, on the other hand, I do the same work and I release it back into the wild, assuming my patch isn't stupid, I gain some respect from people who are likely to help me in the future, and more importantly, I gain a way to prove that I know how to use and modify open source software at my next interview. I raise my market value. Now, I can see why an employer might object to an employee releasing those changes... but for the employee, getting to publicly release code has some rather large economic advantages vs. just writing and using the same code internally.
  - davidw 16y ago
    Also, if you maintain your own, modified version of something, it can get pretty hairy as it starts to diverge from the main open source one. That divergence can cost time and money.

blantonl 16y ago

a fantastic example of open source software being pigeon-holed.

moonpolysoft 16y ago
The topic is about companies doing OSS. These are the types of companies I see deriving value from OSS. Feel free to contribute more.

muhfuhkuh 16y ago

"Their open source offerings are loss leaders intended to stimulate enterprise sales. Mission critical systems get built on the open source software, and then managers can elect to buy enterprise features and support from the vendors." It's even simpler than that. They give away the source and simply sell the support contracts, to both big and small customers (Red Hat does quite a bit of small-mid business sales). But, to go even smaller than Red Hat, there _is_ value to open sourcing your "crown jewels", and making it up in other ways. Wordpress and Digium (Asterisk VOIP developer) are two off the top of the head that profit very well from their completely open-source core competencies. MySQL did so well they were bought by Sun (now Oracle) for US$1 Billion, and Trolltech makes about US$30 Million for Nokia marketing Qt toolkit for embedded, which is a niche of a niche. There are others out there that are sustaining a business based solely on open source software, such as Jaspersoft and SugarCRM. Hell, Motorola just bought that company that makes Cappuccino just yesterday, so there has to be some value to it, for sure.

runT1ME 16y ago
Digium makes a lot of money? I haven't heard much about their financials...

gaius 16y ago

It's interesting to see what Google doesn't give away. MapReduce gets all the press, but (AFAIK) it's only Hadoop (Yahoo) that's open source. Similarly the Linux distro they use on their internal machines and their rumoured custom highly-optimized kernel. BigTable is not open source. Google File System is not open source. Even Google recognizes that there actually is business value in "commodity" code, and I'd argue that their open source efforts are intended at least in part to distract from this.