4 ms·

I think doing the argument of "open source vs business focused" is incorrect. I would just make the comparison of "business focused vs not business focused". If

I think doing the argument of "open source vs business focused" is incorrect. I would just make the comparison of "business focused vs not business focused". If it is open source or not, that is just a detail of the business strategy. One of the main problem that we technologist fail at is that a lot of the times we assume technology == product. When we do this, we completely overlook all the necessary infrastructure and processes that we need to have in place to capture the value that the technology provides. We need customer success to guide the customer through a continuous successful implementation, marketing to very clearly articulate value propositions that change in different verticals, a sales team to capture the value and turn it into dollars consistently, support to listen to the customer when things go wrong and hold their hand through the fixes or workaround, lawyers to prepare support contracts and cover procurement requirements, hr, etc etc. I could go on forever. I disagree that there are not examples of companies that show how to make money from open source. Beyond the obvious examples like "RedHat is a public company" and "MySQL sold to Sun", I can think of an absurd amount of businesses whose secret sauce is ElasticSearch. I would argue, that even though Elastic is a public company, they have not been capturing all the value they have brought. Although there are consulting companies like EnterpriseDB and CitusDB around projects like PostgreSQL, thinking that "consulting" is the one and only business model around monetizing an open source database is a gross over simplification that glosses over models that are evolving in various other areas, for example the one Jetbrains is doing with IntelliJ (basically a subscription service now). I can look at the current top 100 posts of HNs and point out quite a few of successful businesses that would not have been where they are right now without open source existing in its current form.

hodgesrm 8y ago
I was going to write this comment but you did it already. ;) Another common criticism of OSS goes along the lines of "it does not monetize value fully." In other words it creates value but the authors don't collect on it completely. However, the same statement is true of proprietary software. Anybody who has sold proprietary products knows that what you recover is a fraction of the cost of your users doing it themselves. It might be a bigger fraction than OSS but not always--maybe you don't even get the sale in the first place because users are afraid of lock-in. It's therefore quite misleading to think in terms of different economic models for OSS and proprietary-based businesses. There are more points in common than differences.
- aidenn0 8y ago
  The problem is that the "cost of doing it themselves" for OSS is downloading and building your source, whereas for proprietary software, it's the cost of writing it.
  - hodgesrm 8y ago
    It really depends on the software in question. I work on DBMS. The cost of doing it yourself is potentially much higher than your comment indicates: * Time-to-market -- Rework due to mistakes when implementing or deploying applications * Risk -- Fixing problems may take [much] longer than for supported software * Resources -- Extra personnel to do software support and maintenance. This gets a lot more painful once software is long in the tooth and no longer cool to work on. None of these have anything to do with OSS in particular. And for many people the costs are outweighed by benefits like understanding the technology stack and not being in thrall to costs they can't control. In a similar vein I used to fix cars myself. I now take them to the mechanic even though for many problems I could do a better job albeit at a high cost of time, parts, and tools. It's cheaper to focus on work that I'm good at. I still miss car mechanics though.
    - aidenn0 8y ago
      All of those costs are orthogonal to OSS vs proprietary software. For example, there is commercially supported OSS software and completely unsupported proprietary software.
milansuk 8y ago
Since you mentioned MySQL, there's this nice story about co-founder Michael “Monty” Widenius[1]. Also MySQL history/timeline[2] is nice example how you can go from 80% revenue drop(after going open source) to $1B acquisition. [1] https://blog.openocean.vc/founder-stories-a-hackers-hacker-6d5054c90564 https://blog.openocean.vc/founder-stories-a-hackers-hacker-6... [2] https://dri.es/the-history-of-mysql-ab https://dri.es/the-history-of-mysql-ab

hodgesrm 8y ago

I was going to write this comment but you did it already. ;) Another common criticism of OSS goes along the lines of "it does not monetize value fully." In other words it creates value but the authors don't collect on it completely. However, the same statement is true of proprietary software. Anybody who has sold proprietary products knows that what you recover is a fraction of the cost of your users doing it themselves. It might be a bigger fraction than OSS but not always--maybe you don't even get the sale in the first place because users are afraid of lock-in. It's therefore quite misleading to think in terms of different economic models for OSS and proprietary-based businesses. There are more points in common than differences.

aidenn0 8y ago
The problem is that the "cost of doing it themselves" for OSS is downloading and building your source, whereas for proprietary software, it's the cost of writing it.
- hodgesrm 8y ago
  It really depends on the software in question. I work on DBMS. The cost of doing it yourself is potentially much higher than your comment indicates: * Time-to-market -- Rework due to mistakes when implementing or deploying applications * Risk -- Fixing problems may take [much] longer than for supported software * Resources -- Extra personnel to do software support and maintenance. This gets a lot more painful once software is long in the tooth and no longer cool to work on. None of these have anything to do with OSS in particular. And for many people the costs are outweighed by benefits like understanding the technology stack and not being in thrall to costs they can't control. In a similar vein I used to fix cars myself. I now take them to the mechanic even though for many problems I could do a better job albeit at a high cost of time, parts, and tools. It's cheaper to focus on work that I'm good at. I still miss car mechanics though.
  - aidenn0 8y ago
    All of those costs are orthogonal to OSS vs proprietary software. For example, there is commercially supported OSS software and completely unsupported proprietary software.

milansuk 8y ago

Since you mentioned MySQL, there's this nice story about co-founder Michael “Monty” Widenius[1]. Also MySQL history/timeline[2] is nice example how you can go from 80% revenue drop(after going open source) to $1B acquisition. [1] https://blog.openocean.vc/founder-stories-a-hackers-hacker-6d5054c90564 https://blog.openocean.vc/founder-stories-a-hackers-hacker-6... [2] https://dri.es/the-history-of-mysql-ab https://dri.es/the-history-of-mysql-ab