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To be honest, open source doesn't really benefit the company doing it nearly as much as it benefits the users. Most of them essentially get something for nothi

by lux 18y ago

To be honest, open source doesn't really benefit the company doing it nearly as much as it benefits the users. Most of them essentially get something for nothing. And nowadays, it's no news story to be open source, so the extra marketing you get for being open is much less than it was 5 years ago. Unless you reach a certain level, external developer contribution will be minimal as well (compared to what's done internally), so you can't depend on that for benefit either. And as for selling support, forget it. If your product is stable, 99% of people will opt for the "we'll just call you when we need you" option and take the hourly billing rate (even a jacked up one for emergencies), because they'll only need it maybe once a year. I've run a successful albeit very small open source company for 7 years, and we're gearing up to release another major version by end of summer (www.simian.ca). I really don't mean to come off cynical or unappreciative of certain users (we have a number of users who have been amazingly helpful, and those are the users that make it all worthwhile), but as a model for a new business you have to look at the reality of how well it can work and grow into a sustainable model. Open source is a big risk for little potential gain these days. My advice, start a company that offers a subscription-based service or boxed product (closed source). You can always provide APIs for 3rd parties to interact with, and you can open source libraries and other useful but non-essential bits. But giving away the central thing that defines your company is a difficult sell.

bayareaguy 18y ago
I think it matters who your customer is and the value they derive from your product. Open source makes a huge difference when your product is intended to be embedded in your customer's product. When their business depends on yours it's obvious they need to pay you or ultimately suffer the higher cost to them of having to maintain your code-base themselves. When you're talking about some dinky utility a non-technical end-user may use then you're probably smarter to go the shareware route. One thing to worry a little about is how to protect yourself from competitors that may try to compete with you using your own code. If you're the sole owner of your core technology and there isn't any significant secret factual information in it then you're probably safe going open source with the appropriate licensing.
- lux 18y ago
  We do have a number of companies that depend on our software for some pretty core processes within their businesses. Still, because our software is stable, over time the value of an under-used support contract goes down in their eyes. In several cases, they simply haven't renewed support because the product didn't need it. So we only really hear from them when upgrades are available for them. So I'm hesitant to recommend a support-based business model for that reason (unless they're making unstable software ;), and for the fact that most software falls outside of the "core business process" category, which would likely make support a really tough sell. There's where subscription-based services shine, because support is expected with it, but it's distributed over exactly one installation instead of hundreds, so fixes are made once and apply to everyone. This way you're essentially selling access to the software plus support over time, making residual income, and cutting down the amount of effort it takes to support many customers. While that's not the right model for every type of software obviously, many companies have shown it can be made to apply to a surprising number of cases you wouldn't think it suitable for at first :)
- bbgm 18y ago
  That makes a lot of sense and fits in with some of the experiences I've had. In fact a lot of large companies don't want to be in the business of code development if they can help it. It's just not their core business. What they would want is open source or open apis so that they can integrate into their infrastructure on their own terms.

by lux 18y ago

bayareaguy 18y ago

I think it matters who your customer is and the value they derive from your product. Open source makes a huge difference when your product is intended to be embedded in your customer's product. When their business depends on yours it's obvious they need to pay you or ultimately suffer the higher cost to them of having to maintain your code-base themselves. When you're talking about some dinky utility a non-technical end-user may use then you're probably smarter to go the shareware route. One thing to worry a little about is how to protect yourself from competitors that may try to compete with you using your own code. If you're the sole owner of your core technology and there isn't any significant secret factual information in it then you're probably safe going open source with the appropriate licensing.

lux 18y ago
We do have a number of companies that depend on our software for some pretty core processes within their businesses. Still, because our software is stable, over time the value of an under-used support contract goes down in their eyes. In several cases, they simply haven't renewed support because the product didn't need it. So we only really hear from them when upgrades are available for them. So I'm hesitant to recommend a support-based business model for that reason (unless they're making unstable software ;), and for the fact that most software falls outside of the "core business process" category, which would likely make support a really tough sell. There's where subscription-based services shine, because support is expected with it, but it's distributed over exactly one installation instead of hundreds, so fixes are made once and apply to everyone. This way you're essentially selling access to the software plus support over time, making residual income, and cutting down the amount of effort it takes to support many customers. While that's not the right model for every type of software obviously, many companies have shown it can be made to apply to a surprising number of cases you wouldn't think it suitable for at first :)
bbgm 18y ago
That makes a lot of sense and fits in with some of the experiences I've had. In fact a lot of large companies don't want to be in the business of code development if they can help it. It's just not their core business. What they would want is open source or open apis so that they can integrate into their infrastructure on their own terms.