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There is some tricky big assumption being made here around sustainable profitability that misses our lived reality, especially given challenges like US develope

There is some tricky big assumption being made here around sustainable profitability that misses our lived reality, especially given challenges like US developer salaries. Paraphrasing, OSS companies need lightning to hit twice, first for the OSS and then again for the company. In our case, the Graphistry team loves and breathes OSS every day. We helped start what became the massively popular Apache Arrow and Nvidia RAPIDS projects, release our Python & JS clients as OSS, and PyGraphistry[AI] is a graph Swiss army knife, including tools like GFQL the only embeddable & dataframe-native & GPU-accelerated implementation of the Cypher graph query language.. ... But we sustainably grow primarily by selling cloud/on-prem self-hosting licenses to enterprises, govs, and data companies to our GPU graph viz server. Thankfully, after years of grinding, that business is growing well. As a natural experiment, our alternate SaaS hosting revenue does support a tiny team... but not the majority of our team. Most of our innovation cycles would disappear without our self-hosting license revenue. There's some cross of winning lottery ticket, SaaS market profile, and technical defensibility getting missed in the article that I can't put my finger on. Our launches of Louie.AI + GFQL are changing the OSS viability story in our particular case (I'd love to chat w successful founders here!), so I'm not saying it can't work, but our experience to get to this point makes me worried for new founders reading the article.

dcow 3y ago
Are the companies that buy your on prem solution buying the source code or the support? In other words if you said to them “hey the source is open now” would they say “oh cool we’ll be canceling our contract”?
- lmeyerov 3y ago
  Fair question! A good chunk would cancel, and at a minimum, switching to free sw / paid support would drop our product-related revenue by ~70-80%. Then again, we could make the software worse to trigger higher support hours, as complained by others in the thread about some OSS companies. Or really lean into it, going to full-blown consulting. However, switching to a consulting business has all sorts of negative externalities that can easily destroy the strengths and joys of a product culture. We actually do provide a growing side of professional services and roadmap acceleration for Graphistry & louie.ai (graph viz, graph AI, genAI, for data-intensive operational / investigative scenarios). By having our product licensing revenue the majority, we get to make sure there is stronger positive mutual alignment between us and our users, and our software and their long-term mission. As another natural experiment, I was interviewing someone from a company in the same space a few days ago that doesn't have this discipline. While our company is younger, our tech roadmap has been literally years ahead every year, and the software they deliver has no real upgrade path.. alignment helps when you care about your craft and customers. (And for HN'ers, it's a 5X+ on valuation multiple.)
  - dcow 3y ago
    If you said “our source is now available under the AGPL, if you’d like to keep using the software without reverse licensing modifications and your patents you’ll need to remain on your current plan”, how many would walk? Or similar, “our software is open source but still requires a license for commercial use” would 70-80% give you the middle finger and say okay sue us then? Just curious if there is a dual licensing strategy that could work for you. I mean think about it, the companies you’ve sold the software to have now seen your sources. If they could take the code and do it better themselves and it was just a question of “knowing the secret sauce” then wouldn’t 70-80% of them have done so (if your claim is accurate). There’s something else happening here. They’re paying for your team to maintain the software and provide continual updates. Getting the source code is most likely an implementation detail to the purchaser. Open source doesn't mean free as in free beer. It’s a myth that you can’t charge a company for an open source product.
    - auggierose 3y ago
      I think you got a pretty clear answer to that already in the parent answer. Of course, you could keep insisting that open source should work for them.
      - dcow 3y ago
        I’m not asking the same question twice. Read carefully. And the comment I responded to was edited. I’m not insisting anything. A lot of people assume open source means free as in beer and don’t even realize dual licensing is an option.
  - ensignavenger 3y ago
    A deeper question would be to examine if your product mindshare would grow significantly if your product were open source, and if this growth would lead to a combination kf the following that would overcome the loss is subscribers: 1) Contributions from the community (bug reports, code, promotion, documentation, and feedback are all valuable contributions, but they take work to leverage, and some companies choose not to put in the work). 2) More users means more potential subscribers to the cloud and support licenses. (What percent of these new users would convert to paid support licenses or cloud hosting customers?). 3) Other new ways to garner financial support from the community? (Patronage, paid feature development, ???).
dboreham 3y ago
Thoughtful post, thanks. However, this tripped me up: "our GPU graph viz server" -- I couldn't understand how you a) scale graphviz[1] on a GPU and b) make money hosting graphviz. Quick read of your web site cleared that up :) [1] https://graphviz.org/ https://graphviz.org/

dcow 3y ago

Are the companies that buy your on prem solution buying the source code or the support? In other words if you said to them “hey the source is open now” would they say “oh cool we’ll be canceling our contract”?

lmeyerov 3y ago
Fair question! A good chunk would cancel, and at a minimum, switching to free sw / paid support would drop our product-related revenue by ~70-80%. Then again, we could make the software worse to trigger higher support hours, as complained by others in the thread about some OSS companies. Or really lean into it, going to full-blown consulting. However, switching to a consulting business has all sorts of negative externalities that can easily destroy the strengths and joys of a product culture. We actually do provide a growing side of professional services and roadmap acceleration for Graphistry & louie.ai (graph viz, graph AI, genAI, for data-intensive operational / investigative scenarios). By having our product licensing revenue the majority, we get to make sure there is stronger positive mutual alignment between us and our users, and our software and their long-term mission. As another natural experiment, I was interviewing someone from a company in the same space a few days ago that doesn't have this discipline. While our company is younger, our tech roadmap has been literally years ahead every year, and the software they deliver has no real upgrade path.. alignment helps when you care about your craft and customers. (And for HN'ers, it's a 5X+ on valuation multiple.)
- dcow 3y ago
  If you said “our source is now available under the AGPL, if you’d like to keep using the software without reverse licensing modifications and your patents you’ll need to remain on your current plan”, how many would walk? Or similar, “our software is open source but still requires a license for commercial use” would 70-80% give you the middle finger and say okay sue us then? Just curious if there is a dual licensing strategy that could work for you. I mean think about it, the companies you’ve sold the software to have now seen your sources. If they could take the code and do it better themselves and it was just a question of “knowing the secret sauce” then wouldn’t 70-80% of them have done so (if your claim is accurate). There’s something else happening here. They’re paying for your team to maintain the software and provide continual updates. Getting the source code is most likely an implementation detail to the purchaser. Open source doesn't mean free as in free beer. It’s a myth that you can’t charge a company for an open source product.
  - auggierose 3y ago
    I think you got a pretty clear answer to that already in the parent answer. Of course, you could keep insisting that open source should work for them.
    - dcow 3y ago
      I’m not asking the same question twice. Read carefully. And the comment I responded to was edited. I’m not insisting anything. A lot of people assume open source means free as in beer and don’t even realize dual licensing is an option.
- ensignavenger 3y ago
  A deeper question would be to examine if your product mindshare would grow significantly if your product were open source, and if this growth would lead to a combination kf the following that would overcome the loss is subscribers: 1) Contributions from the community (bug reports, code, promotion, documentation, and feedback are all valuable contributions, but they take work to leverage, and some companies choose not to put in the work). 2) More users means more potential subscribers to the cloud and support licenses. (What percent of these new users would convert to paid support licenses or cloud hosting customers?). 3) Other new ways to garner financial support from the community? (Patronage, paid feature development, ???).

dboreham 3y ago

Thoughtful post, thanks. However, this tripped me up: "our GPU graph viz server" -- I couldn't understand how you a) scale graphviz[1] on a GPU and b) make money hosting graphviz. Quick read of your web site cleared that up :) [1] https://graphviz.org/ https://graphviz.org/