10 ms·

Making Money from Open-Source Software

175 points by aliswe 8y ago

denniskane 8y ago
I hate the concept of money. It needs to die a painful death. Business-as-usual is killing the planet and all future generations. Starting up a planet-saving model of business-as-unusual is why I started hacking on "Linux on the Web" [1] over 6 years ago. It is now quietly starting to take over. I think we all knew Linux was going to eventually do that anyway. [1] Online now at https://linuxontheweb.org/desk.os https://linuxontheweb.org/desk.os
pwaai 8y ago
getting paid for integration? 1) create a popular open source product 2) give it away, building market share and awareness 3) shake down corporations making money from your open source product in the form of "licensing & maintenance agreement* 4) Trickle down effect on non corporate users who in turn feed back into the loop by performing QA and community support. I personally believe this is the future of software, at least someone who is competing against VC funded proprietary entities looking to IPO and not really give a shit about the product that brought them in a position to raise money. What do you guys think? This is just my opinion of course downsides to this model. One major downside of openin the doors to everybody is you get a ton of noises. People who shouldn't be using it complaining and it's always tricky to manage, especially when people feel entitled to it as it is free. An argument to this noise is that any noise is better than no noise, meaning any type of engagement good or bad is considered a plus for the app, to discover new shit
the_other_guy 8y ago
I guess it depends on the category, for something like a database it can be easy to charge money (e.g. managed instances, charging cloud vendors, etc...) but something like frontend javascript framework it's almost impossible to do that
- deleted 8y ago
  [deleted]
jaabe 8y ago
I work for a Danish municipality that co-operates a number of open source projects with other muniplacities. I know we’re a niche of sorts, but the setup we apply is to find small local development houses who can build and maintain our code based, but also sell us hosting. We’ll need a system to handle our vacationflow, with employees reporting it, managers approving it and an integration to our payment system. We’ll handle the business understanding (it involves around 33 different tax laws and some silly organisational culture), the project management and the whole governance around the code base. You do the coding, and then you sell us the hosted solution which you run in Azure or AWS letting our ADFS handle authentication. It’s worked marvellous so far.
- shoo 8y ago
  > whole governance around the code base Yes, ideally you want to have some highly competent in-house technical ability to assess the quality and maintainability of the codebase that is being produced, separately from the business requirements, otherwise there is a fair chance that you may end up with a lot of low quality code and a system that cannot be safely or cheaply modified. I've seen a couple of organisations outsource development, keeping only project management and domain expertise in house, but having no in house ability to assess the quality of technical work. Don't do that. If your vendors fill your project with the most profitable least experienced/capable developers, after enough years of that you'll get to have exciting meetings about "we're no longer able to estimate how long it will take to make changes to the system".
gchamonlive 8y ago
Not a question about the article but related: what software tools are lacking in the community? Where should people start looking when brainstorming for project ideas? We can all agree we need to give back to the community. Eventually we will need to eat too.
gk1 8y ago
After reading this several times I still don't understand "how [they] did it." Also tried the AGPL description.[1] Can someone confirm: They just licensed it so that commercial use is prohibited without payment? I've worked (and am working) with companies that have an open-source product and a commercial offering built around it. My experience is that it's easy to get _some_ companies to pay you, whether it's for the right license, added features, support, or consultation. But to make any significant revenue you're going to have to work hard to provide a lot more value on top of the open-source option, and you probably don't want it to be "consulting." Then you realize that all your prospective buyers are anchored at "free" and need a lot of convincing (perceived value) to pay for the commercial version. The positioning needs careful consideration. Nobody wants to pay a five- or six-figure license for a slighty-better-than-the-free-version solution. [1] https://tldrlegal.com/license/gnu-affero-general-public-license-v3-(agpl-3.0) https://tldrlegal.com/license/gnu-affero-general-public-lice...
- deleted 8y ago
  [deleted]
- gmueckl 8y ago
  It is more nuanced than that: RavenDB seems OK to use if you have an application that shields its users completely from the database itself. The database server is AGPL, but the client library your application uses is MIT licensed, which is fairly liberal. If you were to directly embed RabenDB in a product, you would have to provide the full source, even if you run it as a service and don't distribute binaries of the software.
  - gk1 8y ago
    Therefore, companies pay for a license to avoid having to provide the full source of their application. Is that right?
  - aliswe 8y ago
    From what I understood (surveyed this a while ago) RavenDB wants commercial clients to pay. They do this by licensing the free version as agpl. You pay to get another license. Keeping your code agpl as a commercial entity is a kind of loophole in their eyes. So they keep commercial clients out by using agpl. That means they want you to pay even if you build a website that uses a cms that uses ravendb. Even though agpl perhaps would let you get sway with it. Dont think so though.
yesimahuman 8y ago
For others looking for ways to monetize open source, we’ve learned at Ionic that many enterprises aren’t just looking to buy a premium version of your OSS project, they want your help solving (with software) a ton of related challenges around the technology/space, too. The big money is in doing those things too and not just being one small piece of the puzzle. So, for us, that means helping teams be successful with app development in general using our software/tech in the process (i.e. scalable software product on a yearly subscription and the same as sold to other customers, not custom development). If you want to go down that route, get ready to have excellent support and be willing to be seen as an expert that your customers are going to call upon. But support is tablestakes for B2B so that comes with the territory. Of course, this is no small leap. Going from having a successful open source project to building an enterprise business around it is really hard and took a lot longer than I expected. Looking back I wish we spent a little less time worrying about GitHub stars and more about solving enterprise problems, but we made it through! Of course this is just one way to monetize and I’m also excited about the growing OSS sustainability offerings out there, like Tidelift
- mistrial9 8y ago
  companies outsource the jobs that are the hardest, least-desirable, or worst case, within some turf war or other management dysfunction.. plenty of those also pay "the big money" ... for some duration.. its not easy
- usaphp 8y ago
  Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?
  - TAForObvReasons 8y ago
    It is, the open source project functions as marketing for your abilities to develop solutions in the space.
  - gk1 8y ago
    Because you can build products around the open-source core. So then you are selling enterprise products, not services.
AdmiralAsshat 8y ago
I personally like CrossOver's model. It doesn't include anything you couldn't already do with Wine, but it's less setup, and you have a support staff that can look at it if you really need a particular program to work under Wine. Any improvements they make are upstreamed to Wine. I have no idea if they're "profitable" or not.
- chx 8y ago
  Well, if they aren't then someone with very deep pockets is having fun there because they are like thirty people and have been around for more than twenty years.
davidw 8y ago
When you talk about making money with open source software, it's about figuring out what scarcity to sell: https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity/ https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity...
nemild 8y ago
Reupping Nadia Eghbal's excellent, Lemonade Stand: A handy guide to financial support for open source https://github.com/nayafia/lemonade-stand https://github.com/nayafia/lemonade-stand This document aims to provide an exhaustive list of all the ways that people get paid for open source work. Hopefully, projects and contributors will find this helpful in figuring out the best options for them.
ultrasaurus 8y ago
Fun timing, we're about to publish an update on how we've done it (last mentioned in 2016 https://blog.sentry.io/2016/10/24/building-an-open-source-service.html https://blog.sentry.io/2016/10/24/building-an-open-source-se... ). The #1 piece of advice I could give is standard b-school boilerplate: figure out what your unique advantage is and how the market wants to pay for access to it. That might be training, support, SaaS or paying for features but you have to do the legwork.
ohiovr 8y ago
Would offering a “subscription” improvement program be a viable alternative? You the developer are the expert on the software, and hiring the original developer to modify or tweak the code may make sense, But make it a reoccurring fee kind of like a subscription. You could offer services based on the intensity of the work. Perhaps one subscription offering differs from another by the total max hours. Like the gold plan would be 40 developer hours per month and silver be 30 or whatever. You would have to feel out what kind of commitment could be there. But it can be nice for you that those hours are max. If they don’t ring you up at all you still pocket the money for that month.
- eesmith 8y ago
  I don't think so. I don't see why someone would choose this subscription model over a standard contracting model, billed by the hour. Or, billed by the hour with a 30 hour/month minimum and maximum. I would also question the ethics - if three customers want the same thing, do I bill each of them? Or each of them at 1/3? After all, they are paying for hours. I charge a yearly support fee for my product, which covers any questions (rare) and funds additional development. Support customers get free upgrades, so I don't need to figure out the hourly billing.
deleted 8y ago
[deleted]
kemitchell 8y ago
TL;DR: AGPL database. Permissively licensed client libraries. Dual licensing the database. But really you should read the post, for the thought process that led to that approach. Among well known database vendors, the natural comparisons are MongoDB and MySQL. Like Mongo, RavenDB is available under a single network-copyleft license. Like Mongo, RavenDB client libraries are permissively licensed. However, MongoDB focuses on selling all-encompassing packages that include a mix of support, services, and add-ons. To hear this post tell it, Hibernating Rhinos is running more of a pure dual-licensing play with RavenDB. That approach puts them close to MySQL. However, MySQL dual licensed both database and client libraries. Nobody needs to buy a commercial license for RavenDB client libraries. The obvious question, in current context, is whether Hibernating Rhinos is cruising for a cloud provider bruising, the kind of which Mongo has loudly complained. Cue Server Side Public License. Here follow shameless but relevant plugs: Plain language, more general take on an SSPL-style license: https://github.com/kemitchell/shared-component-license/blob/master/license.md https://github.com/kemitchell/shared-component-license/blob/... Open form paid license agreement for indie developers dual licensing, or doing paid add-ons: https://github.com/indieopensource/paid-license https://github.com/indieopensource/paid-license License Zero, which offers dual-licensing back-office as a service, as well as public licenses without the problems and known vulnerabilities of *GPL: https://licensezero.com/ https://licensezero.com/
pkamb 8y ago
Are there any examples of small/simple projects or pieces of code released under the GPL, with a non-GPL dual license being sold for $X000?
yboris 8y ago
My personal project Video Hub App is for sale for $3.50 per copy, but is also open source: https://github.com/whyboris/Video-Hub-App https://github.com/whyboris/Video-Hub-App Have 437 sales as of today (released 1 year ago) with many people opting to pay more than $3.50 -- though I'm funneling $3.50 from every sale to a GiveWell recommended charity.
- vagab0nd 8y ago
  I've looked into your app and loved it. The only thing preventing me from paying for (and using) it is tag support.
  - yboris 8y ago
    Tag support is coming in version 2.0.0 (before March 22nd). Pull in the current master to see it! Currently very WIP (UI needs minor polish and there are some bugs) but tags are usable.
jonson555 8y ago
I’m using IssueHunt. https://issuehunt.io/ https://issuehunt.io/ It is an issue based bounty service for OSS. Actually I have not maintaining open source, but I’m using them in my work. So as my appreciation, I sometimes put bounties for issues of several projects. It seems that maintainer and contributor can get bounty.
- bdcravens 8y ago
  How much have you paid out so far? Most projects like that are well-meaning, but are more like tip jars than real monetization.

175 points by aliswe 8y ago

I hate the concept of money. It needs to die a painful death. Business-as-usual is killing the planet and all future generations. Starting up a planet-saving model of business-as-unusual is why I started hacking on "Linux on the Web" [1] over 6 years ago. It is now quietly starting to take over. I think we all knew Linux was going to eventually do that anyway. [1] Online now at https://linuxontheweb.org/desk.os https://linuxontheweb.org/desk.os

pwaai 8y ago

getting paid for integration? 1) create a popular open source product 2) give it away, building market share and awareness 3) shake down corporations making money from your open source product in the form of "licensing & maintenance agreement* 4) Trickle down effect on non corporate users who in turn feed back into the loop by performing QA and community support. I personally believe this is the future of software, at least someone who is competing against VC funded proprietary entities looking to IPO and not really give a shit about the product that brought them in a position to raise money. What do you guys think? This is just my opinion of course downsides to this model. One major downside of openin the doors to everybody is you get a ton of noises. People who shouldn't be using it complaining and it's always tricky to manage, especially when people feel entitled to it as it is free. An argument to this noise is that any noise is better than no noise, meaning any type of engagement good or bad is considered a plus for the app, to discover new shit

the_other_guy 8y ago

I guess it depends on the category, for something like a database it can be easy to charge money (e.g. managed instances, charging cloud vendors, etc...) but something like frontend javascript framework it's almost impossible to do that

deleted 8y ago
[deleted]

jaabe 8y ago

I work for a Danish municipality that co-operates a number of open source projects with other muniplacities. I know we’re a niche of sorts, but the setup we apply is to find small local development houses who can build and maintain our code based, but also sell us hosting. We’ll need a system to handle our vacationflow, with employees reporting it, managers approving it and an integration to our payment system. We’ll handle the business understanding (it involves around 33 different tax laws and some silly organisational culture), the project management and the whole governance around the code base. You do the coding, and then you sell us the hosted solution which you run in Azure or AWS letting our ADFS handle authentication. It’s worked marvellous so far.

shoo 8y ago
> whole governance around the code base Yes, ideally you want to have some highly competent in-house technical ability to assess the quality and maintainability of the codebase that is being produced, separately from the business requirements, otherwise there is a fair chance that you may end up with a lot of low quality code and a system that cannot be safely or cheaply modified. I've seen a couple of organisations outsource development, keeping only project management and domain expertise in house, but having no in house ability to assess the quality of technical work. Don't do that. If your vendors fill your project with the most profitable least experienced/capable developers, after enough years of that you'll get to have exciting meetings about "we're no longer able to estimate how long it will take to make changes to the system".

gchamonlive 8y ago

Not a question about the article but related: what software tools are lacking in the community? Where should people start looking when brainstorming for project ideas? We can all agree we need to give back to the community. Eventually we will need to eat too.

gk1 8y ago

After reading this several times I still don't understand "how [they] did it." Also tried the AGPL description.[1] Can someone confirm: They just licensed it so that commercial use is prohibited without payment? I've worked (and am working) with companies that have an open-source product and a commercial offering built around it. My experience is that it's easy to get _some_ companies to pay you, whether it's for the right license, added features, support, or consultation. But to make any significant revenue you're going to have to work hard to provide a lot more value on top of the open-source option, and you probably don't want it to be "consulting." Then you realize that all your prospective buyers are anchored at "free" and need a lot of convincing (perceived value) to pay for the commercial version. The positioning needs careful consideration. Nobody wants to pay a five- or six-figure license for a slighty-better-than-the-free-version solution. [1] https://tldrlegal.com/license/gnu-affero-general-public-license-v3-(agpl-3.0) https://tldrlegal.com/license/gnu-affero-general-public-lice...

deleted 8y ago
[deleted]
gmueckl 8y ago
It is more nuanced than that: RavenDB seems OK to use if you have an application that shields its users completely from the database itself. The database server is AGPL, but the client library your application uses is MIT licensed, which is fairly liberal. If you were to directly embed RabenDB in a product, you would have to provide the full source, even if you run it as a service and don't distribute binaries of the software.
- gk1 8y ago
  Therefore, companies pay for a license to avoid having to provide the full source of their application. Is that right?
- aliswe 8y ago
  From what I understood (surveyed this a while ago) RavenDB wants commercial clients to pay. They do this by licensing the free version as agpl. You pay to get another license. Keeping your code agpl as a commercial entity is a kind of loophole in their eyes. So they keep commercial clients out by using agpl. That means they want you to pay even if you build a website that uses a cms that uses ravendb. Even though agpl perhaps would let you get sway with it. Dont think so though.

yesimahuman 8y ago

For others looking for ways to monetize open source, we’ve learned at Ionic that many enterprises aren’t just looking to buy a premium version of your OSS project, they want your help solving (with software) a ton of related challenges around the technology/space, too. The big money is in doing those things too and not just being one small piece of the puzzle. So, for us, that means helping teams be successful with app development in general using our software/tech in the process (i.e. scalable software product on a yearly subscription and the same as sold to other customers, not custom development). If you want to go down that route, get ready to have excellent support and be willing to be seen as an expert that your customers are going to call upon. But support is tablestakes for B2B so that comes with the territory. Of course, this is no small leap. Going from having a successful open source project to building an enterprise business around it is really hard and took a lot longer than I expected. Looking back I wish we spent a little less time worrying about GitHub stars and more about solving enterprise problems, but we made it through! Of course this is just one way to monetize and I’m also excited about the growing OSS sustainability offerings out there, like Tidelift

mistrial9 8y ago
companies outsource the jobs that are the hardest, least-desirable, or worst case, within some turf war or other management dysfunction.. plenty of those also pay "the big money" ... for some duration.. its not easy
usaphp 8y ago
Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?
- TAForObvReasons 8y ago
  It is, the open source project functions as marketing for your abilities to develop solutions in the space.
- gk1 8y ago
  Because you can build products around the open-source core. So then you are selling enterprise products, not services.

AdmiralAsshat 8y ago

I personally like CrossOver's model. It doesn't include anything you couldn't already do with Wine, but it's less setup, and you have a support staff that can look at it if you really need a particular program to work under Wine. Any improvements they make are upstreamed to Wine. I have no idea if they're "profitable" or not.

chx 8y ago
Well, if they aren't then someone with very deep pockets is having fun there because they are like thirty people and have been around for more than twenty years.

davidw 8y ago

When you talk about making money with open source software, it's about figuring out what scarcity to sell: https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity/ https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity...

nemild 8y ago

Reupping Nadia Eghbal's excellent, Lemonade Stand: A handy guide to financial support for open source https://github.com/nayafia/lemonade-stand https://github.com/nayafia/lemonade-stand This document aims to provide an exhaustive list of all the ways that people get paid for open source work. Hopefully, projects and contributors will find this helpful in figuring out the best options for them.

ultrasaurus 8y ago

Fun timing, we're about to publish an update on how we've done it (last mentioned in 2016 https://blog.sentry.io/2016/10/24/building-an-open-source-service.html https://blog.sentry.io/2016/10/24/building-an-open-source-se... ). The #1 piece of advice I could give is standard b-school boilerplate: figure out what your unique advantage is and how the market wants to pay for access to it. That might be training, support, SaaS or paying for features but you have to do the legwork.

ohiovr 8y ago

Would offering a “subscription” improvement program be a viable alternative? You the developer are the expert on the software, and hiring the original developer to modify or tweak the code may make sense, But make it a reoccurring fee kind of like a subscription. You could offer services based on the intensity of the work. Perhaps one subscription offering differs from another by the total max hours. Like the gold plan would be 40 developer hours per month and silver be 30 or whatever. You would have to feel out what kind of commitment could be there. But it can be nice for you that those hours are max. If they don’t ring you up at all you still pocket the money for that month.

eesmith 8y ago
I don't think so. I don't see why someone would choose this subscription model over a standard contracting model, billed by the hour. Or, billed by the hour with a 30 hour/month minimum and maximum. I would also question the ethics - if three customers want the same thing, do I bill each of them? Or each of them at 1/3? After all, they are paying for hours. I charge a yearly support fee for my product, which covers any questions (rare) and funds additional development. Support customers get free upgrades, so I don't need to figure out the hourly billing.

deleted 8y ago

[deleted]

kemitchell 8y ago

TL;DR: AGPL database. Permissively licensed client libraries. Dual licensing the database. But really you should read the post, for the thought process that led to that approach. Among well known database vendors, the natural comparisons are MongoDB and MySQL. Like Mongo, RavenDB is available under a single network-copyleft license. Like Mongo, RavenDB client libraries are permissively licensed. However, MongoDB focuses on selling all-encompassing packages that include a mix of support, services, and add-ons. To hear this post tell it, Hibernating Rhinos is running more of a pure dual-licensing play with RavenDB. That approach puts them close to MySQL. However, MySQL dual licensed both database and client libraries. Nobody needs to buy a commercial license for RavenDB client libraries. The obvious question, in current context, is whether Hibernating Rhinos is cruising for a cloud provider bruising, the kind of which Mongo has loudly complained. Cue Server Side Public License. Here follow shameless but relevant plugs: Plain language, more general take on an SSPL-style license: https://github.com/kemitchell/shared-component-license/blob/master/license.md https://github.com/kemitchell/shared-component-license/blob/... Open form paid license agreement for indie developers dual licensing, or doing paid add-ons: https://github.com/indieopensource/paid-license https://github.com/indieopensource/paid-license License Zero, which offers dual-licensing back-office as a service, as well as public licenses without the problems and known vulnerabilities of *GPL: https://licensezero.com/ https://licensezero.com/

pkamb 8y ago

Are there any examples of small/simple projects or pieces of code released under the GPL, with a non-GPL dual license being sold for $X000?

yboris 8y ago

My personal project Video Hub App is for sale for $3.50 per copy, but is also open source: https://github.com/whyboris/Video-Hub-App https://github.com/whyboris/Video-Hub-App Have 437 sales as of today (released 1 year ago) with many people opting to pay more than $3.50 -- though I'm funneling $3.50 from every sale to a GiveWell recommended charity.

vagab0nd 8y ago
I've looked into your app and loved it. The only thing preventing me from paying for (and using) it is tag support.
- yboris 8y ago
  Tag support is coming in version 2.0.0 (before March 22nd). Pull in the current master to see it! Currently very WIP (UI needs minor polish and there are some bugs) but tags are usable.

jonson555 8y ago

I’m using IssueHunt. https://issuehunt.io/ https://issuehunt.io/ It is an issue based bounty service for OSS. Actually I have not maintaining open source, but I’m using them in my work. So as my appreciation, I sometimes put bounties for issues of several projects. It seems that maintainer and contributor can get bounty.

bdcravens 8y ago
How much have you paid out so far? Most projects like that are well-meaning, but are more like tip jars than real monetization.