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Why There Will Never Be Another RedHat: The Economics of Open Source (2014)

224 points by jayliew 8y ago

bwang29 8y ago
The problem of open source is attribution, more specifically attribution back to individual contributors and the significance of contributions, and it is especially hard if you want to do attribution based on revenue performance if the licensee is small and do not have an audit department. A large proprietary software licensee can work with a licensor to track revenue performance because the licensee already have the right infrastructure to do so. So here is a startup idea: An external auditing company with APIs to streamline the process of rev share and attribution back to the open source community and contributors, so that open source projects will make revenue and have the resource to reinvest and improve the projects.
- user5994461 8y ago
  Receiving attributions doesn't pay the bills.
  - walterbell 8y ago
    Crowdfunding sites have found ways to be compensated.
    - deleted 8y ago
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  - irrational 8y ago
    I imagine most open source contributors have full time jobs. I have a full-time job that pays the bills so I don't need any kind of monetary reimbursement for my work on open-source projects. I just do it for the fun/challenge/scratch-an-itch/giving-back/etc.
    - watwut 8y ago
      Foss makes regular surveys. Most open source developers are paid.
    - coldtea 8y ago
      >I imagine most open source contributors have full time jobs Yes: writing open source for companies. Much fewer do it as a hobby, and those can't sustain large projects.
    - pjmlp 8y ago
      Outside work I rather spend time with family and friends. When I do something is just the outcome of dabbling in something as part of learn process, just contributing back some bug reports or minor fixes. Hence why I tend to pay for the software I use, either via donations, buying author's books, distribution CD/DVDs, or actually buying licenses. I believe that the authors from the tools I earn money with, should also get a piece of the cake.
  - gerbilly 8y ago
    Attribution doesn't pay even for a hotdog, as seen here: http://theoatmeal.com/comics/exposure http://theoatmeal.com/comics/exposure
- agibsonccc 8y ago
  I'd argue it's actually the economics. End users both want everything for free expecting it to work perfectly as well as assurances that the project isn't going away while also somehow still wanting guarantees around release schedules. Those same people also endlessly complain to OSS maintainers about something they are getting for free and somehow expect the red carpet when it comes to feature requests. Attribution isn't the issue, it's balancing the need for building a community vs the financial incentives to actually support the people building the thing you're using.
decentralised 8y ago
"Sure, when you first launch a business built using open source components, (...) you might start off looking a little like Red Hat. But if all goes well, you’ll start to more resemble Facebook, GitHub, Amazon or Cumulus Networks as you layer in your own special something on top of the platform and deliver it as a service, or package it as an appliance." I sure hope not. The original intent of ICOs was to monetise open-source development, and now there are many great teams with huge treasure chests building great software, funding research and providing grants for anyone wanting to work on blockchain and the wider web3 ecosystem without having to go through a token offering, given the current sad state of affairs. I know this isn't necessarily appealing for everyone, but for those interested: https://blog.ethereum.org/2018/10/15/ethereum-foundation-grants-update-wave-4/ https://blog.ethereum.org/2018/10/15/ethereum-foundation-gra... https://blog.aragon.org/tag/nest/ https://blog.aragon.org/tag/nest/
- empath75 8y ago
  I’m pretty sure the original intent of ico’s was to figure out a way to rip off investors by issuing unregulated securities.
  - olivermarks 8y ago
    I disagree. The original intent for ICO's was (and is) honorable, as is crowd funding. We have to get out of this mindset that ICO's are inherently fraudulent. The early days of the internet were rife with scams and fraud (and it still is). That doesn't make the internet 'a way to figure out how to rip people off'. The big banks would love everyone to think ICO's are wild west country, just as the early days of open source were laughed out of the room as crazy give aways of ip. Look were we are now with Oracle 'openworld' a few years later...
  - decentralised 8y ago
    It was really to fund research and development of open-source cryptographic protocols which are usually out of the VCs radars. The mechanism used was itself a revolutionary development, fungible digital tokens (ERC20). There are new protocols for fundraising that are designed to give token holders more control over the disbursement of rewards to the development teams but the wider market still needs a good cleanup imho.
sandworm101 8y ago
There is economics beyond that of redhat. Open source can and does exist without profit. Lots of people donate time/energy to projects every day and by doing so create great products that do compete (linux).
- Skunkleton 8y ago
  While you are correct in general, Linux is not a good example of a project that is developed without profit. Most of the major contributors and maintainers of Linux are paid for their work. The companies that are paying for this work make huge profits from Linux.
  - bonzini 8y ago
    Does Intel or ARM make profits from Linux? They need to have it run will on their current hardware, and they can show future features in advance, but they don't directly make a profit from selling Linux.
    - Skunkleton 8y ago
      No one makes profit from selling linux. People make profit with devices running linux, or by selling linux support.
- reificator 8y ago
  I agree with everything you said, until you claimed that Linux development is not driven by profit.
- juliendorra 8y ago
  More recent examples are of course Wikipedia and Open Street Map, both huge software and data projects.
steelframe 8y ago
tl;dr: Tragedy of the commons.
teabee89 8y ago
Admins: the title needs "(2014)"
- sctb 8y ago
  Updated. Thank you!
olivermarks 8y ago
This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las... VC's love the winner take all big platform investment world. I suspect (and hope) that era is coming to an end, not open source...
- deleted 8y ago
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- benwerd 8y ago
  And in fact, we're seeing some great open source companies, including Elastic, which just had an IPO last month. Modern decentralization has yielded the promise of valuable assets that actually become more valuable through being open, which means that VCs in 2018 are singing a very different tune to VCs in 2014. No, we won't see another company that's exactly like Red Hat. That's how the technology industry works. We're not going to see another successful Facebook, either. But we will see many more companies that push our expectations and moves the industry forward. Many of them will absolutely be based on open source software and communities.
  - deleted 8y ago
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  - ummonk 8y ago
    Elastic uses a lot of closed source software to complement its open source core, which is exactly what the article said is the future of OSS.
- deleted 8y ago
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- SpanishConf 8y ago
  >This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las.. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las.... That recently many historians have began to consider this line of thinking "wrong" because of the rise of illiberal democracies, i.e. Russia, Hungry and the success of China as a Pseudo-Capitalist Dictatorship.
jenandre 8y ago
This article has already been proven wrong... e.g. what about Elastic
- dig1 8y ago
  Elastic isn't good example of good open-source company, like RH was. They have their main product open sourced (ElasticSearch)[1], but other products aren't [2]. From RH I always expected they will open their successful product at some point (e.g. Tower); from Elastic, I'm expecting opposite. [1] "open source" I mean OSI approved license, not some cryptic text which can get you on court [2] https://news.ycombinator.com/item?id=16487440 https://news.ycombinator.com/item?id=16487440
- jillesvangurp 8y ago
  Good example because their strategy is to move away from consultancy/training/support as their primary business model towards shipping add on services, cloud products, etc. I was at Elastic.on beginning of the year where they talked a bit about their thinking. They referred to 'other' OSS companies having contradicting goals where in order to sell support/training, they make the base OSS product harder to use and more complicated so that people actually need the support and training. E.g. having great documentation directly conflicts with selling training and consultancy. They did not want to differentiate between a hard to use OSS version and a nicer commercial package. Instead they want users to pay for added value in the form of bundled stuff that is not OSS (but now mostly available for free), or cloud based SAAS products that they run for you. The core product is the same for everyone. So, their strategy is already exactly as suggested in the article: great OSS that they actively help build complemented by SAAS business and other services where they are making a lot of money. Looking at their acquisitions, they have been buying companies that do SAAS business on top of their core technology or support that business in some way. Elastic cloud is based on one of their early acquisitions (a company called found.no). Another more recent one is Swiftype which provides easy to integrate search as a service for small websites. Then there's Prelert which provides incident management and analytics tooling. In addition they've been investing in building out geospatial data for the purpose of supporting analytics use cases using their Kibana tool (another of their acquisitions) and now included as part of Elastic cloud. They've bought packetbeat and opsworks that both focus on infrastructure OSS that supports getting data to Elasticsearch and Kibana. Of course they also still do support, consultancy, training, etc. as well. But that is a tougher business to scale because it involves lots of handholding. That's actually a key problem with this business: you need lots of sales to close deals and then you need lots of consultants to actually keep the customers happy. Looking at IBM and Oracle, you can clearly see that they are struggling there. IBM is looking to buy credibility for their cloud solutions through Red Hat. They've been struggling for years with consultancy as their core business and have been laying off people aggressively as revenues have been disappointing. They have at this point very little in house tech to draw in new customers. AWS is all about selling their cloud stuff. If it's OSS and widely used, you can bet there's an AWS service from them that you can use (e.g. Elasticsearch, Hadoop, ActiveMQ, Mysql, Postgresql, Redis, etc.).
mathattack 8y ago
I won’t miss them. They’ve been a very difficult vendor to work with. At least once they go to IBM it’s easier to justify sunsetting them.
beatgammit 8y ago
> no other public standalone companies Well, SUSE isn't public, but they're mostly "standalone". And there are plenty of other companies based around a single open source platform. Sure, they aren't $1B+ companies, but they don't need to be.
- deleted 8y ago
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- idm_guru 8y ago
  I'm recording a podcast, called Open Source Underdogs, focusing on open source business models. You can find it on iTunes, Google, Stitcher, etc or on the website https://opensourceunderdogs.com https://opensourceunderdogs.com IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business. What about Cloudera? What about Automattic? What about MongoDB? What about MariaDB? The podcast has 9 episodes, and we have about 20 more in the queue for 2018-2019. Tune in... Some of the gurus of open source software share some valuable insights.
  - jldugger 8y ago
    > IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business. It's more about sustaining the business. Redhat's most recently reported quarterly earnings growth was negative. Did they sell now because IBM approached them with an absurdly high price? Or did Redhat executives need to shop around for a buyer, because they felt they were near a local maxima and things were starting to go downhill? edit: that said, this is a subject I care about and will be adding your podcast shortly. Hopefully you figure out podcast sustainability as well =)
    - 8y ago
davidw 8y ago
The problem with open source software is ultimately that of scarcity: https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity/ https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity...
AtlasBarfed 8y ago
AWS largely makes money off of open source, it just provides virtualization as a service along with the actual hardware. It may not be as straightforward as RedHat, but it basically is the same thing.
- buboard 8y ago
  I don't think it's the same at all. Redhat's model is to create open source software.
- jonknee 8y ago
  It's not the same thing at all. You don't pay AWS for support, you pay AWS to use its bandwidth, software and hardware.
jordigh 8y ago
Why doesn't anyone try to simply sell free software? You want me to give you a copy of the software? Pay for it. And here's a gratis sample to see what could get, but it doesn't have all of the features I wrote for it. You want access to login to the web platform? Pay for it. You want the source code for it, so you can modify it and/or redistribute it? Also pay for it. The GPL has explicit provisions for allowing access to the source code only if you pay, for example. Surely some money is to be made this way. Maybe not enough to create a giant monopoly that completely dominates the market, but enough to make a living. Not everything has to be a winner-takes-all unicorn. If we are to believe that the copying of non-free software that happens right now happens and companies are still profitable, surely explicitly allowing that copying wouldn't make it any less profitable?
- TylerE 8y ago
  It's been tried. From scams (https://proflightsimulator.com/ https://proflightsimulator.com/ - rebranding of OSS FlightGear) to just people compiling and released the source (RHEL -> CentOS).
  - jordigh 8y ago
    But why is that a scam? Redistributing for profit is a right explicitly granted by all FOSS licenses. This is like when people were selling Firefox CDs: https://web.archive.org/web/20060511105535/http://business.timesonline.co.uk/article/0,,9075-2051196,00.html https://web.archive.org/web/20060511105535/http://business.t...
    - TylerE 8y ago
      Because they are misrepresenting what you're getting, promising features that aren't there, even showing screenshots from OTHER simulators and claiming them as their own. https://www.rockpapershotgun.com/2018/03/09/dont-buy-proflightsimulator/ https://www.rockpapershotgun.com/2018/03/09/dont-buy-proflig...
    - avinium 8y ago
      I've come across a couple of websites selling LibreOffice rebranded. While I know it's permissible, it does leave a bit of a bad taste in my mouth. I sort of feel like there should be a banner on the frontpage acknowledging it.
pcpcpc 8y ago
If legislation required (certain/any) publicly funded projects to use open source software, whose code would be made freely and publicly available, then open source would see a much greater market share and level of investment and we'd likely see new open source business models.
deleted 8y ago
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TaylorAlexander 8y ago
One thing we could do, if we wanted, is to build a society focused on automating away jobs. Such a society would not rely on people to work for its function, but on the labor of machines. In such a place, people would be free to work as hard as they want for additional gain. They could also, however, take as much time off as they desired to go to school, learn on their own, spend more time with loved ones, or just relax and explore life in their own way. In such a society, I think many people would be motivated to give their labor to open source projects. I think the machines that run such a society would necessarily be open source, and many people could give back to society by contributing to the design and improvement of the machines that provide for us all. What do you all think of this? Would you want to live in a place like that?
- toomuchtodo 8y ago
  > What do you all think of this? Would you want to live in a place like that? Yes, but you're going to need to have the political capital to ratchet down the work week and split productivity gains with labor and capital. That does not exist yet, and without it, the advances you speak of will be used to funnel more wealth to the top. Disclaimer: I am active on the political side, and will be running for office in the next federal Congressional election cycle. Drop me a line if you want to chat on how we can work together to obviate the need to work down the road; that's the future I want for everyone.
  - jxub 8y ago
    > Disclaimer: I am active on the political side, and will be running for office in the next election cycle. You should make an announcement or something for us in HN (when the time comes)! I'm sure there would be quite a lot of people here to support your candidature.
  - profalseidol 8y ago
    Don't we already have a world where machines are the ones producing our needs? There's that Discovery Channel series called "How it's Made" where you see it's practically all robots. Do you agree? > and without it, the advances you speak of will be used to funnel more wealth to the top. All the technologies for mass production so far has indeed funneled to the top huh? And this I believe has also slowed down advancement in technology (unless it's something that is very profitable). > split productivity gains with labor and capital You'll be called Socialist. Giving what the laborers deserve is Socialism. "Share the means of production!" However, the fact that Bernie had a following is a good indicator. There's also Corbin whom is pushing for a 'right to own' policy.
zby 8y ago
To update the terminology - the RedHat model is freemium - you give away something to market the part that you sell. The problem with freemium is always how much you give away and how much you charge for. One idea that I have not yet seen is to do the split in the time dimention - sell licenses that convert into a Free Software or Open Source license after a year or two.
- bonzini 8y ago
  Right, however the main difference is that the premium part is not software. There is no such thing as open core in Red Hat's offerings.
  - zby 8y ago
    I don't know - have you looked at: https://www.redhat.com/en/store/linux-platforms https://www.redhat.com/en/store/linux-platforms
    - bonzini 8y ago
      Sure, I work for Red Hat. You pay for support, training, access to consultants, certifications. All software is available for free, just with trademarks removed.
      - zby 8y ago
        Just to be clear so you say that there is nothing non-GPL in the software that is bought there? For example https://www.redhat.com/en/store/red-hat-enterprise-linux-server#?sku=RH00005 https://www.redhat.com/en/store/red-hat-enterprise-linux-ser... specifies that this is a 'Self-support (1 year)' contract - this sounds like there is no support, training or access to consultants being bought there.
        bonzini 8y ago
        > Just to be clear so you say that there is nothing non-GPL in the software that is bought there? Correct. There are trademarked components (graphics, etc.) that cannot be redistributed but they are not software. The same is true for Mozilla Firefox, for example, even though it's both gratis ("free beer") and libre ("free speech"). There are also a few "supplementary" packages that are non-free but it's stuff like Oracle JDK or Adobe Reader. It's more akin to Debian nonfree than to an open-core model. > Self-support (1 year)' contract - this sounds like there is no support, training or access to consultants being bought there. Correct, in that case you only pay for certifications, knowledge base (which is also part of support) and access to the updates.
yuhong 8y ago
I dislike the current debt-based economy in general myself.
bubblethink 8y ago
I feel that there is an inherent conflict of interest in the OSS support sales model. Hypothetically, if your software were really simple and robust (think standard unix utilities), nobody would pay for support. On the other end, if you have to deploy openstack, kubernetes, or any other stack with a lot of moving parts, you need support and personnel. So in a perverse way, it's in your interest to make complicated shit. In reality, it is perhaps not quite as bad, but I definitely feel that with a lot of projects for which RH is the sole upstream, the quality or elegance isn't quite there when compared to more traditional linux or unixy things which have more diverse upstreams. This manifests in systemd, freeipa, glusterfs etc. too. These are generally hard problems though. So it's not quite black and white.
- fungiblecog 8y ago
  I find this attitude really tiring. I'm a contractor and I work with people all the time who feel like they must avoid improving anything because if they do they'll be out of a job. It's nonsense. It's the same as the luddites that think robots will tale all the jobs. There will always be something new (and more fun to do) than maintaining broken systems and processes.
  - hinkley 8y ago
    I have been in a couple slightly dicey situations but overall have found that there are always other things I’d like to have time to do if I didn’t spend so much energy babysitting a shitty tool or process. You find out frequently that people who use the tool have ten things they never asked for because the tools don’t even handle basic common sense concerns. It feels like asking for a pony, possibly from a neglectful parent. You fix a few things and get labeled as clever or useful. People come to you with more stuff and it expands your grasp of the organization. For me this strategy has opened up leadership opportunities. You can still be laid off but everybody else will wonder who was the idiot who got rid of the person who was keeping the ship afloat.
    - marmaduke 8y ago
      > fix a few things and get labeled as clever or useful. People come to you with more stuff and it expands your grasp of the organization,... Yes, but it's not really a satisfying work experience! > who was the idiot who got rid of the person who was keeping the ship afloat the same that chose the shitty tool for a shitty strategy in the first place
fuller00 8y ago
I've been thinking about this for some time and I agree with the gist of the article. Most OSS that comes out: 1. Either funded by giant megacorps because they're trying to commoditize their competitor's edge: See kubernetes, LLVM etc. 2. Common frameworks that people sell consulting around. This is tricky because if your software is easy enough for consumers to use, they won't have use for your consulting. This leads to this bad incentive of complicating software where not necessary. See: Pivotal selling consulting around Spring and Redhat etc. 3. Anything that doesn't fit in #1 or #2 above is mostly not possible with OSS. To think about it, we can just examine the most consumer facing software that we use. Where is a OSS developed messenger app that is as popular as Facebook or Hangouts? 20 years back, we had OSS for most consumer facing software, Unix coreutils etc. Basically, today OSS is reduced to professional frameworks and middleware libraries because that is beneficial to megacorps and they fund this kind of software, but OSS by indie developers is pretty much dead.
- octorian 8y ago
  > but OSS by indie developers is pretty much dead I have never seen a viable "business model" around F/OSS end-user application software. Every time I ask the F/OSS fanboys for this, they either come up short or ramble about "selling support." The closest I've even considered was the OpenBSD model, where you keep everything free and open, but sell the "official distribution." The modern app store ecosystem actually improves the viability of this. However, that approach probably has a lot of limitations. That being said, I prefer to open-source anything I do that I don't intend to make money off of. I personally despise the "closed-source free-as-in-beer" model that some indie non-Linux developers seem to opt for.
  - fuller00 8y ago
    One of the most intriguing models to fund OSS that I've seen lately is ICOs. The only downside to it being that it fits a narrow band of software which can have a marketplace. So if you're developing the next coreutils "ls", I doubt you could fund it with an ICO. Another model is that of sqlite, where the core code is open but unit tests aren't available. In effect, this is somewhat similar to selling consulting but with fewer chances of you having to complicate your software. At the end of the day, what's important is that the base computing be available in an OSS fashion. Base Computing = Decent OS with GUI + An App store. I think that's the direction Canonical should be going in and attempt to make money by hosting an App store for Ubuntu, just like Google makes money off PlayStore.
mperham 8y ago
If you don't think about how you will sustain an open source project, your project will not be sustainable. "Those who fail to plan, plan to fail." Building a business model on top of my open source Sidekiq[0] project was the best decision I've ever made. That doesn't mean my approach will work for all (or even many) projects but anyone who is trying to build a popular project needs to consider: if I succeed, what will the project look like five years from now? Will you or a core team still be helping users every day? [0]: https://sidekiq.org https://sidekiq.org
- christophilus 8y ago
  Thank you for sidekiq. It is the one sane piece of the tech stack I’m working with.
- profalseidol 8y ago
  +1 for using LGPL. However, seems like there's lots of features that is proprietary (or at least non-free licensed).
  - mperham 8y ago
    Yep, and there's an easy value proposition here: Almost all of those features are available as OSS plugins. Do you want to gather 5-10 complex plugins, integrate them all, debug them and support them for years to come? Or pay for a turn-key solution that takes literally one minute to buy and get running? If a business can afford a laptop, it can afford my Enterprise product.
fuller00 8y ago
One model that might work is the Unreal Engine model, so an OSS license that is free for personal use, but for commercial use, it might require 3% (say) of your profit from sales of the software product.
- mrob 8y ago
  >but for commercial use, it might require 3% (say) of your profit from sales of the software product. That's not OSS.
  - fuller00 8y ago
    I think the discussion is centered around preserving the component of Open source which includes funding for the software but retains availability of the source. In such a case, it may not be possible to retain the full pure classic OSS definition. It might be best to just use Unreal Engine like license where the source is available for inspection and personal use but still being charged for commercial use.
dep_b 8y ago
Strange. Most hills look small compared to the Mount Everest and the Aconcagua. That doesn't mean they're actually easy to climb. Why is RedHat compared to the biggest companies on the planet?
PaulHoule 8y ago
I am not sure why the service business is any better. Sure you can cash the checks you get from your customers and write out a check for AWS. Or you can run a data center the old way or some new way. So can anybody else. There is just no moat. Running the service you can pocket the money you make learning how to run it more efficiently. You share some attributes with Salesforce.com but you don't have the patent portfolio and other proprietary IP that makes Salesforce a great product for what it is.
Annatar 8y ago
In all my decades of working with computers, redhat was by far the worst company with the most incompetent staff that I've encountered. redhat's "engineers" preferred to spend time arguing with their customers rather then solving their problems and severely struggling to understand where in the code the issues are. Where they particularly struggled were higher order architectural abstractions and their consequences and system engineering for backwards compatibility. Their bugzilla.redhat.com is chalk full if examples of struggling to understand and debug the code and arguing with customers. I sure as hell hope there will never be another computer company like redhat.
Annatar 8y ago
"We had made the product so easy to use and so important, that we had out-engineered ourselves." Yeah, so "easy" that we had to debug and extend microdhcp code to properly support PXE booting and add option 150 because you guys offered nothing with which to properly boot XEN VM's; XEN was so woefully unfinished that we had to finish it for you and now you're telling us how complete of a product it is and patting yourself on the back. "Details-schmetails", it's "the big picture" that's important, which is that someone cashed out, am I right? This is one of the reasons why my passion and love for computers turned to bitter disappointment: the lies and really bad, half-cooked software. Damn it all, Keith Wesolowski was so right[1]. [1] http://dtrace.org/blogs/wesolows/2014/12/29/fin/ http://dtrace.org/blogs/wesolows/2014/12/29/fin/
z3t4 8y ago
What is a better business model then taking something that is virtually free and selling it at a premium !?
roman_g 8y ago
I thought free software was about freedom, not how to monetize it. You can never trust a service - only your own hardware (it's not quite possible with modern mass-market CPU though, only on IBM Power or some dummy MCU or even FPGA-based RISC/MIPS/whatever ) with free software on it. When did Linux become about cloud and containers, not about desktop?

224 points by jayliew 8y ago

The problem of open source is attribution, more specifically attribution back to individual contributors and the significance of contributions, and it is especially hard if you want to do attribution based on revenue performance if the licensee is small and do not have an audit department. A large proprietary software licensee can work with a licensor to track revenue performance because the licensee already have the right infrastructure to do so. So here is a startup idea: An external auditing company with APIs to streamline the process of rev share and attribution back to the open source community and contributors, so that open source projects will make revenue and have the resource to reinvest and improve the projects.

user5994461 8y ago
Receiving attributions doesn't pay the bills.
- walterbell 8y ago
  Crowdfunding sites have found ways to be compensated.
  - deleted 8y ago
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- irrational 8y ago
  I imagine most open source contributors have full time jobs. I have a full-time job that pays the bills so I don't need any kind of monetary reimbursement for my work on open-source projects. I just do it for the fun/challenge/scratch-an-itch/giving-back/etc.
  - watwut 8y ago
    Foss makes regular surveys. Most open source developers are paid.
  - coldtea 8y ago
    >I imagine most open source contributors have full time jobs Yes: writing open source for companies. Much fewer do it as a hobby, and those can't sustain large projects.
  - pjmlp 8y ago
    Outside work I rather spend time with family and friends. When I do something is just the outcome of dabbling in something as part of learn process, just contributing back some bug reports or minor fixes. Hence why I tend to pay for the software I use, either via donations, buying author's books, distribution CD/DVDs, or actually buying licenses. I believe that the authors from the tools I earn money with, should also get a piece of the cake.
- gerbilly 8y ago
  Attribution doesn't pay even for a hotdog, as seen here: http://theoatmeal.com/comics/exposure http://theoatmeal.com/comics/exposure
agibsonccc 8y ago
I'd argue it's actually the economics. End users both want everything for free expecting it to work perfectly as well as assurances that the project isn't going away while also somehow still wanting guarantees around release schedules. Those same people also endlessly complain to OSS maintainers about something they are getting for free and somehow expect the red carpet when it comes to feature requests. Attribution isn't the issue, it's balancing the need for building a community vs the financial incentives to actually support the people building the thing you're using.

decentralised 8y ago

"Sure, when you first launch a business built using open source components, (...) you might start off looking a little like Red Hat. But if all goes well, you’ll start to more resemble Facebook, GitHub, Amazon or Cumulus Networks as you layer in your own special something on top of the platform and deliver it as a service, or package it as an appliance." I sure hope not. The original intent of ICOs was to monetise open-source development, and now there are many great teams with huge treasure chests building great software, funding research and providing grants for anyone wanting to work on blockchain and the wider web3 ecosystem without having to go through a token offering, given the current sad state of affairs. I know this isn't necessarily appealing for everyone, but for those interested: https://blog.ethereum.org/2018/10/15/ethereum-foundation-grants-update-wave-4/ https://blog.ethereum.org/2018/10/15/ethereum-foundation-gra... https://blog.aragon.org/tag/nest/ https://blog.aragon.org/tag/nest/

empath75 8y ago
I’m pretty sure the original intent of ico’s was to figure out a way to rip off investors by issuing unregulated securities.
- olivermarks 8y ago
  I disagree. The original intent for ICO's was (and is) honorable, as is crowd funding. We have to get out of this mindset that ICO's are inherently fraudulent. The early days of the internet were rife with scams and fraud (and it still is). That doesn't make the internet 'a way to figure out how to rip people off'. The big banks would love everyone to think ICO's are wild west country, just as the early days of open source were laughed out of the room as crazy give aways of ip. Look were we are now with Oracle 'openworld' a few years later...
- decentralised 8y ago
  It was really to fund research and development of open-source cryptographic protocols which are usually out of the VCs radars. The mechanism used was itself a revolutionary development, fungible digital tokens (ERC20). There are new protocols for fundraising that are designed to give token holders more control over the disbursement of rewards to the development teams but the wider market still needs a good cleanup imho.

sandworm101 8y ago

There is economics beyond that of redhat. Open source can and does exist without profit. Lots of people donate time/energy to projects every day and by doing so create great products that do compete (linux).

Skunkleton 8y ago
While you are correct in general, Linux is not a good example of a project that is developed without profit. Most of the major contributors and maintainers of Linux are paid for their work. The companies that are paying for this work make huge profits from Linux.
- bonzini 8y ago
  Does Intel or ARM make profits from Linux? They need to have it run will on their current hardware, and they can show future features in advance, but they don't directly make a profit from selling Linux.
  - Skunkleton 8y ago
    No one makes profit from selling linux. People make profit with devices running linux, or by selling linux support.
reificator 8y ago
I agree with everything you said, until you claimed that Linux development is not driven by profit.
juliendorra 8y ago
More recent examples are of course Wikipedia and Open Street Map, both huge software and data projects.

steelframe 8y ago

tl;dr: Tragedy of the commons.

teabee89 8y ago

Admins: the title needs "(2014)"

sctb 8y ago
Updated. Thank you!

olivermarks 8y ago

This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las... VC's love the winner take all big platform investment world. I suspect (and hope) that era is coming to an end, not open source...

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benwerd 8y ago
And in fact, we're seeing some great open source companies, including Elastic, which just had an IPO last month. Modern decentralization has yielded the promise of valuable assets that actually become more valuable through being open, which means that VCs in 2018 are singing a very different tune to VCs in 2014. No, we won't see another company that's exactly like Red Hat. That's how the technology industry works. We're not going to see another successful Facebook, either. But we will see many more companies that push our expectations and moves the industry forward. Many of them will absolutely be based on open source software and communities.
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- ummonk 8y ago
  Elastic uses a lot of closed source software to complement its open source core, which is exactly what the article said is the future of OSS.
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SpanishConf 8y ago
>This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las.. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las.... That recently many historians have began to consider this line of thinking "wrong" because of the rise of illiberal democracies, i.e. Russia, Hungry and the success of China as a Pseudo-Capitalist Dictatorship.

jenandre 8y ago

This article has already been proven wrong... e.g. what about Elastic

dig1 8y ago
Elastic isn't good example of good open-source company, like RH was. They have their main product open sourced (ElasticSearch)[1], but other products aren't [2]. From RH I always expected they will open their successful product at some point (e.g. Tower); from Elastic, I'm expecting opposite. [1] "open source" I mean OSI approved license, not some cryptic text which can get you on court [2] https://news.ycombinator.com/item?id=16487440 https://news.ycombinator.com/item?id=16487440
jillesvangurp 8y ago
Good example because their strategy is to move away from consultancy/training/support as their primary business model towards shipping add on services, cloud products, etc. I was at Elastic.on beginning of the year where they talked a bit about their thinking. They referred to 'other' OSS companies having contradicting goals where in order to sell support/training, they make the base OSS product harder to use and more complicated so that people actually need the support and training. E.g. having great documentation directly conflicts with selling training and consultancy. They did not want to differentiate between a hard to use OSS version and a nicer commercial package. Instead they want users to pay for added value in the form of bundled stuff that is not OSS (but now mostly available for free), or cloud based SAAS products that they run for you. The core product is the same for everyone. So, their strategy is already exactly as suggested in the article: great OSS that they actively help build complemented by SAAS business and other services where they are making a lot of money. Looking at their acquisitions, they have been buying companies that do SAAS business on top of their core technology or support that business in some way. Elastic cloud is based on one of their early acquisitions (a company called found.no). Another more recent one is Swiftype which provides easy to integrate search as a service for small websites. Then there's Prelert which provides incident management and analytics tooling. In addition they've been investing in building out geospatial data for the purpose of supporting analytics use cases using their Kibana tool (another of their acquisitions) and now included as part of Elastic cloud. They've bought packetbeat and opsworks that both focus on infrastructure OSS that supports getting data to Elasticsearch and Kibana. Of course they also still do support, consultancy, training, etc. as well. But that is a tougher business to scale because it involves lots of handholding. That's actually a key problem with this business: you need lots of sales to close deals and then you need lots of consultants to actually keep the customers happy. Looking at IBM and Oracle, you can clearly see that they are struggling there. IBM is looking to buy credibility for their cloud solutions through Red Hat. They've been struggling for years with consultancy as their core business and have been laying off people aggressively as revenues have been disappointing. They have at this point very little in house tech to draw in new customers. AWS is all about selling their cloud stuff. If it's OSS and widely used, you can bet there's an AWS service from them that you can use (e.g. Elasticsearch, Hadoop, ActiveMQ, Mysql, Postgresql, Redis, etc.).

mathattack 8y ago

I won’t miss them. They’ve been a very difficult vendor to work with. At least once they go to IBM it’s easier to justify sunsetting them.

beatgammit 8y ago

> no other public standalone companies Well, SUSE isn't public, but they're mostly "standalone". And there are plenty of other companies based around a single open source platform. Sure, they aren't $1B+ companies, but they don't need to be.

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idm_guru 8y ago
I'm recording a podcast, called Open Source Underdogs, focusing on open source business models. You can find it on iTunes, Google, Stitcher, etc or on the website https://opensourceunderdogs.com https://opensourceunderdogs.com IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business. What about Cloudera? What about Automattic? What about MongoDB? What about MariaDB? The podcast has 9 episodes, and we have about 20 more in the queue for 2018-2019. Tune in... Some of the gurus of open source software share some valuable insights.
- jldugger 8y ago
  > IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business. It's more about sustaining the business. Redhat's most recently reported quarterly earnings growth was negative. Did they sell now because IBM approached them with an absurdly high price? Or did Redhat executives need to shop around for a buyer, because they felt they were near a local maxima and things were starting to go downhill? edit: that said, this is a subject I care about and will be adding your podcast shortly. Hopefully you figure out podcast sustainability as well =)
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davidw 8y ago

The problem with open source software is ultimately that of scarcity: https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity/ https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity...

AtlasBarfed 8y ago

AWS largely makes money off of open source, it just provides virtualization as a service along with the actual hardware. It may not be as straightforward as RedHat, but it basically is the same thing.

buboard 8y ago
I don't think it's the same at all. Redhat's model is to create open source software.
jonknee 8y ago
It's not the same thing at all. You don't pay AWS for support, you pay AWS to use its bandwidth, software and hardware.

jordigh 8y ago

Why doesn't anyone try to simply sell free software? You want me to give you a copy of the software? Pay for it. And here's a gratis sample to see what could get, but it doesn't have all of the features I wrote for it. You want access to login to the web platform? Pay for it. You want the source code for it, so you can modify it and/or redistribute it? Also pay for it. The GPL has explicit provisions for allowing access to the source code only if you pay, for example. Surely some money is to be made this way. Maybe not enough to create a giant monopoly that completely dominates the market, but enough to make a living. Not everything has to be a winner-takes-all unicorn. If we are to believe that the copying of non-free software that happens right now happens and companies are still profitable, surely explicitly allowing that copying wouldn't make it any less profitable?

TylerE 8y ago
It's been tried. From scams (https://proflightsimulator.com/ https://proflightsimulator.com/ - rebranding of OSS FlightGear) to just people compiling and released the source (RHEL -> CentOS).
- jordigh 8y ago
  But why is that a scam? Redistributing for profit is a right explicitly granted by all FOSS licenses. This is like when people were selling Firefox CDs: https://web.archive.org/web/20060511105535/http://business.timesonline.co.uk/article/0,,9075-2051196,00.html https://web.archive.org/web/20060511105535/http://business.t...
  - TylerE 8y ago
    Because they are misrepresenting what you're getting, promising features that aren't there, even showing screenshots from OTHER simulators and claiming them as their own. https://www.rockpapershotgun.com/2018/03/09/dont-buy-proflightsimulator/ https://www.rockpapershotgun.com/2018/03/09/dont-buy-proflig...
  - avinium 8y ago
    I've come across a couple of websites selling LibreOffice rebranded. While I know it's permissible, it does leave a bit of a bad taste in my mouth. I sort of feel like there should be a banner on the frontpage acknowledging it.

pcpcpc 8y ago

If legislation required (certain/any) publicly funded projects to use open source software, whose code would be made freely and publicly available, then open source would see a much greater market share and level of investment and we'd likely see new open source business models.

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TaylorAlexander 8y ago

One thing we could do, if we wanted, is to build a society focused on automating away jobs. Such a society would not rely on people to work for its function, but on the labor of machines. In such a place, people would be free to work as hard as they want for additional gain. They could also, however, take as much time off as they desired to go to school, learn on their own, spend more time with loved ones, or just relax and explore life in their own way. In such a society, I think many people would be motivated to give their labor to open source projects. I think the machines that run such a society would necessarily be open source, and many people could give back to society by contributing to the design and improvement of the machines that provide for us all. What do you all think of this? Would you want to live in a place like that?

toomuchtodo 8y ago
> What do you all think of this? Would you want to live in a place like that? Yes, but you're going to need to have the political capital to ratchet down the work week and split productivity gains with labor and capital. That does not exist yet, and without it, the advances you speak of will be used to funnel more wealth to the top. Disclaimer: I am active on the political side, and will be running for office in the next federal Congressional election cycle. Drop me a line if you want to chat on how we can work together to obviate the need to work down the road; that's the future I want for everyone.
- jxub 8y ago
  > Disclaimer: I am active on the political side, and will be running for office in the next election cycle. You should make an announcement or something for us in HN (when the time comes)! I'm sure there would be quite a lot of people here to support your candidature.
- profalseidol 8y ago
  Don't we already have a world where machines are the ones producing our needs? There's that Discovery Channel series called "How it's Made" where you see it's practically all robots. Do you agree? > and without it, the advances you speak of will be used to funnel more wealth to the top. All the technologies for mass production so far has indeed funneled to the top huh? And this I believe has also slowed down advancement in technology (unless it's something that is very profitable). > split productivity gains with labor and capital You'll be called Socialist. Giving what the laborers deserve is Socialism. "Share the means of production!" However, the fact that Bernie had a following is a good indicator. There's also Corbin whom is pushing for a 'right to own' policy.

zby 8y ago

To update the terminology - the RedHat model is freemium - you give away something to market the part that you sell. The problem with freemium is always how much you give away and how much you charge for. One idea that I have not yet seen is to do the split in the time dimention - sell licenses that convert into a Free Software or Open Source license after a year or two.

bonzini 8y ago
Right, however the main difference is that the premium part is not software. There is no such thing as open core in Red Hat's offerings.
- zby 8y ago
  I don't know - have you looked at: https://www.redhat.com/en/store/linux-platforms https://www.redhat.com/en/store/linux-platforms
  - bonzini 8y ago
    Sure, I work for Red Hat. You pay for support, training, access to consultants, certifications. All software is available for free, just with trademarks removed.
    - zby 8y ago
      Just to be clear so you say that there is nothing non-GPL in the software that is bought there? For example https://www.redhat.com/en/store/red-hat-enterprise-linux-server#?sku=RH00005 https://www.redhat.com/en/store/red-hat-enterprise-linux-ser... specifies that this is a 'Self-support (1 year)' contract - this sounds like there is no support, training or access to consultants being bought there.
      - bonzini 8y ago
        > Just to be clear so you say that there is nothing non-GPL in the software that is bought there? Correct. There are trademarked components (graphics, etc.) that cannot be redistributed but they are not software. The same is true for Mozilla Firefox, for example, even though it's both gratis ("free beer") and libre ("free speech"). There are also a few "supplementary" packages that are non-free but it's stuff like Oracle JDK or Adobe Reader. It's more akin to Debian nonfree than to an open-core model. > Self-support (1 year)' contract - this sounds like there is no support, training or access to consultants being bought there. Correct, in that case you only pay for certifications, knowledge base (which is also part of support) and access to the updates.

yuhong 8y ago

I dislike the current debt-based economy in general myself.

bubblethink 8y ago

I feel that there is an inherent conflict of interest in the OSS support sales model. Hypothetically, if your software were really simple and robust (think standard unix utilities), nobody would pay for support. On the other end, if you have to deploy openstack, kubernetes, or any other stack with a lot of moving parts, you need support and personnel. So in a perverse way, it's in your interest to make complicated shit. In reality, it is perhaps not quite as bad, but I definitely feel that with a lot of projects for which RH is the sole upstream, the quality or elegance isn't quite there when compared to more traditional linux or unixy things which have more diverse upstreams. This manifests in systemd, freeipa, glusterfs etc. too. These are generally hard problems though. So it's not quite black and white.

fungiblecog 8y ago
I find this attitude really tiring. I'm a contractor and I work with people all the time who feel like they must avoid improving anything because if they do they'll be out of a job. It's nonsense. It's the same as the luddites that think robots will tale all the jobs. There will always be something new (and more fun to do) than maintaining broken systems and processes.
- hinkley 8y ago
  I have been in a couple slightly dicey situations but overall have found that there are always other things I’d like to have time to do if I didn’t spend so much energy babysitting a shitty tool or process. You find out frequently that people who use the tool have ten things they never asked for because the tools don’t even handle basic common sense concerns. It feels like asking for a pony, possibly from a neglectful parent. You fix a few things and get labeled as clever or useful. People come to you with more stuff and it expands your grasp of the organization. For me this strategy has opened up leadership opportunities. You can still be laid off but everybody else will wonder who was the idiot who got rid of the person who was keeping the ship afloat.
  - marmaduke 8y ago
    > fix a few things and get labeled as clever or useful. People come to you with more stuff and it expands your grasp of the organization,... Yes, but it's not really a satisfying work experience! > who was the idiot who got rid of the person who was keeping the ship afloat the same that chose the shitty tool for a shitty strategy in the first place

fuller00 8y ago

I've been thinking about this for some time and I agree with the gist of the article. Most OSS that comes out: 1. Either funded by giant megacorps because they're trying to commoditize their competitor's edge: See kubernetes, LLVM etc. 2. Common frameworks that people sell consulting around. This is tricky because if your software is easy enough for consumers to use, they won't have use for your consulting. This leads to this bad incentive of complicating software where not necessary. See: Pivotal selling consulting around Spring and Redhat etc. 3. Anything that doesn't fit in #1 or #2 above is mostly not possible with OSS. To think about it, we can just examine the most consumer facing software that we use. Where is a OSS developed messenger app that is as popular as Facebook or Hangouts? 20 years back, we had OSS for most consumer facing software, Unix coreutils etc. Basically, today OSS is reduced to professional frameworks and middleware libraries because that is beneficial to megacorps and they fund this kind of software, but OSS by indie developers is pretty much dead.

octorian 8y ago
> but OSS by indie developers is pretty much dead I have never seen a viable "business model" around F/OSS end-user application software. Every time I ask the F/OSS fanboys for this, they either come up short or ramble about "selling support." The closest I've even considered was the OpenBSD model, where you keep everything free and open, but sell the "official distribution." The modern app store ecosystem actually improves the viability of this. However, that approach probably has a lot of limitations. That being said, I prefer to open-source anything I do that I don't intend to make money off of. I personally despise the "closed-source free-as-in-beer" model that some indie non-Linux developers seem to opt for.
- fuller00 8y ago
  One of the most intriguing models to fund OSS that I've seen lately is ICOs. The only downside to it being that it fits a narrow band of software which can have a marketplace. So if you're developing the next coreutils "ls", I doubt you could fund it with an ICO. Another model is that of sqlite, where the core code is open but unit tests aren't available. In effect, this is somewhat similar to selling consulting but with fewer chances of you having to complicate your software. At the end of the day, what's important is that the base computing be available in an OSS fashion. Base Computing = Decent OS with GUI + An App store. I think that's the direction Canonical should be going in and attempt to make money by hosting an App store for Ubuntu, just like Google makes money off PlayStore.

mperham 8y ago

If you don't think about how you will sustain an open source project, your project will not be sustainable. "Those who fail to plan, plan to fail." Building a business model on top of my open source Sidekiq[0] project was the best decision I've ever made. That doesn't mean my approach will work for all (or even many) projects but anyone who is trying to build a popular project needs to consider: if I succeed, what will the project look like five years from now? Will you or a core team still be helping users every day? [0]: https://sidekiq.org https://sidekiq.org

christophilus 8y ago
Thank you for sidekiq. It is the one sane piece of the tech stack I’m working with.
profalseidol 8y ago
+1 for using LGPL. However, seems like there's lots of features that is proprietary (or at least non-free licensed).
- mperham 8y ago
  Yep, and there's an easy value proposition here: Almost all of those features are available as OSS plugins. Do you want to gather 5-10 complex plugins, integrate them all, debug them and support them for years to come? Or pay for a turn-key solution that takes literally one minute to buy and get running? If a business can afford a laptop, it can afford my Enterprise product.

fuller00 8y ago

One model that might work is the Unreal Engine model, so an OSS license that is free for personal use, but for commercial use, it might require 3% (say) of your profit from sales of the software product.

mrob 8y ago
>but for commercial use, it might require 3% (say) of your profit from sales of the software product. That's not OSS.
- fuller00 8y ago
  I think the discussion is centered around preserving the component of Open source which includes funding for the software but retains availability of the source. In such a case, it may not be possible to retain the full pure classic OSS definition. It might be best to just use Unreal Engine like license where the source is available for inspection and personal use but still being charged for commercial use.

dep_b 8y ago

Strange. Most hills look small compared to the Mount Everest and the Aconcagua. That doesn't mean they're actually easy to climb. Why is RedHat compared to the biggest companies on the planet?

PaulHoule 8y ago

I am not sure why the service business is any better. Sure you can cash the checks you get from your customers and write out a check for AWS. Or you can run a data center the old way or some new way. So can anybody else. There is just no moat. Running the service you can pocket the money you make learning how to run it more efficiently. You share some attributes with Salesforce.com but you don't have the patent portfolio and other proprietary IP that makes Salesforce a great product for what it is.

Annatar 8y ago

In all my decades of working with computers, redhat was by far the worst company with the most incompetent staff that I've encountered. redhat's "engineers" preferred to spend time arguing with their customers rather then solving their problems and severely struggling to understand where in the code the issues are. Where they particularly struggled were higher order architectural abstractions and their consequences and system engineering for backwards compatibility. Their bugzilla.redhat.com is chalk full if examples of struggling to understand and debug the code and arguing with customers. I sure as hell hope there will never be another computer company like redhat.

Annatar 8y ago

"We had made the product so easy to use and so important, that we had out-engineered ourselves." Yeah, so "easy" that we had to debug and extend microdhcp code to properly support PXE booting and add option 150 because you guys offered nothing with which to properly boot XEN VM's; XEN was so woefully unfinished that we had to finish it for you and now you're telling us how complete of a product it is and patting yourself on the back. "Details-schmetails", it's "the big picture" that's important, which is that someone cashed out, am I right? This is one of the reasons why my passion and love for computers turned to bitter disappointment: the lies and really bad, half-cooked software. Damn it all, Keith Wesolowski was so right[1]. [1] http://dtrace.org/blogs/wesolows/2014/12/29/fin/ http://dtrace.org/blogs/wesolows/2014/12/29/fin/

z3t4 8y ago

What is a better business model then taking something that is virtually free and selling it at a premium !?

roman_g 8y ago

I thought free software was about freedom, not how to monetize it. You can never trust a service - only your own hardware (it's not quite possible with modern mass-market CPU though, only on IBM Power or some dummy MCU or even FPGA-based RISC/MIPS/whatever ) with free software on it. When did Linux become about cloud and containers, not about desktop?