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Sometimes I feel like most of these Open Source SAAS businesses were also only possible in the 0 interest rate era. If your product is open source then you are

Sometimes I feel like most of these Open Source SAAS businesses were also only possible in the 0 interest rate era. If your product is open source then you are competing purely on service offerings, and it will be very hard to compete on support alone, since you have by default higher costs due to maintaining the software itself. Redhat is the exception that proves the rule, and even they are trying to get as less open as possible. Case in point, it would be very hard for Elastic to develop Elasticsearch and then compete with Cloud providers purely on hosting quality and price. Opensearch seems to receive very very few new features compared to ES, and will have features that will not be opensource, like all the hot and cold storage stuff.

tcmart14 3y ago
I agree and disagree at the same time. If your just providing the open source software, yes. Where Red Hat and other kind of kick this rule is by providing the open source software + some more (which may or may not be open source). This can also be support. But I look at something like Tailscale, even though it is still young, it looks pretty promising to me. They provide wireguard, but the magic is their tools and interfaces on top of it. So it seems like, you have a good shot at doing open source SAAS, but you also need to provide something like, a better and simplified interface. Which is sometimes all you need. Tons of great FOSS software out there, but a lot of them are not great at user friendliness.
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benjaminwootton 3y ago
That's quite an insightful take. Open Source Vendor funds the expensive software, but the value they receive back is only accrued in the delta between the Open Source Vendor managing as a SaaS and the end client managing themselves. It's like collecting pennies in front of a steamroller. Companies like Redhat and Hashicorp are different because they sell huge enterprise deals, but a mass market SaaS only play is a tricky business model.
RyanHamilton 3y ago
You are correct and it's in fact worse than even you deescribe. Startup SAAS companies have to pay to create and maintain permissions/login/user setup etc, they have to do marketing and pay to build a brand, let's say that's 30% of their work. Well with Cloud Provider most that work and cost is spread over multiple products. So they can develop and do that part cheaper. Then because the open source version tends ot also be open community, the cloud provider will pitch to your community on your own chat channels: https://ryan-h.com/2023/07/22/the-end-of-open-source-tech-saas-companies/ https://ryan-h.com/2023/07/22/the-end-of-open-source-tech-sa...

tcmart14 3y ago

I agree and disagree at the same time. If your just providing the open source software, yes. Where Red Hat and other kind of kick this rule is by providing the open source software + some more (which may or may not be open source). This can also be support. But I look at something like Tailscale, even though it is still young, it looks pretty promising to me. They provide wireguard, but the magic is their tools and interfaces on top of it. So it seems like, you have a good shot at doing open source SAAS, but you also need to provide something like, a better and simplified interface. Which is sometimes all you need. Tons of great FOSS software out there, but a lot of them are not great at user friendliness.

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benjaminwootton 3y ago

That's quite an insightful take. Open Source Vendor funds the expensive software, but the value they receive back is only accrued in the delta between the Open Source Vendor managing as a SaaS and the end client managing themselves. It's like collecting pennies in front of a steamroller. Companies like Redhat and Hashicorp are different because they sell huge enterprise deals, but a mass market SaaS only play is a tricky business model.

RyanHamilton 3y ago

You are correct and it's in fact worse than even you deescribe. Startup SAAS companies have to pay to create and maintain permissions/login/user setup etc, they have to do marketing and pay to build a brand, let's say that's 30% of their work. Well with Cloud Provider most that work and cost is spread over multiple products. So they can develop and do that part cheaper. Then because the open source version tends ot also be open community, the cloud provider will pitch to your community on your own chat channels: https://ryan-h.com/2023/07/22/the-end-of-open-source-tech-saas-companies/ https://ryan-h.com/2023/07/22/the-end-of-open-source-tech-sa...