6 ms·

You Can Make Money with Open Source

57 points by shawnjan8 14y ago

kyle_t 14y ago
I know this article is focused on the business level, but I'm finding this to be true on a personal level as well. Contributing to open source not only leads to personal improvement but it essentially creates a public portfolio of your work. This can lead to more exposure which in turn can lead to more opportunities (and better paid ones too). Open Source might not yield immediate benefits (i.e a paycheck) like say freelancing, but it is an investment in your future.
rburhum 14y ago
I am just surprised that in 2013 we are still having this discussion. There are several ways "to make money with OS"; Service-based models (like support), Dual-licensing models (think Qt, MySQL, etc), Community vs "Enterprise" packaging, Extensions to popular packages, Consulting, Platform ownership, etc etc etc. Why such big surprise?!?
- shawnjan8 14y ago
  I don't think it's a huge surprise, I just think that there is a lack of understanding for a lot of people. Articles that may encourage more open source are always welcome in my books :)
- ArbitraryLimits 14y ago
  Hacker News and the Harvard Business Review aren't really the same "we."
- davidw 14y ago
  It's certainly possible, but for many people, it's an added obstacle. I've been doing open source since 1997, and love it, but it's so much more difficult to find a way to make money off it than simply selling some product or service. That said, if you're not using open source software as part of your infrastructure, keeping only the 'crown jewels' proprietary, you're probably doing it wrong.
deleted 14y ago
[deleted]
paulhauggis 14y ago
Can you? yes. But it's going to be very difficult. Let's say you have a really popular open source project with an enterprise version (which pays your bills). Anybody can start up a competing app with similar features and either give it out for free or charge, making it more difficult for you to make money and stay in business. The alternative is to have a service-based business. For one or two people, this isn't very scalable.
rmason 14y ago
This story is a bit misleading. If you study the successful companies using open source as a business model you will find they all raised large amounts of venture capital. That was during the window when open source as a business was a brand new idea. That window has now all but closed and it is exceedingly difficult to find examples of successful companies that bootstrapped their way to success running an open source business.
- rxin 14y ago
  What about Cloudera?
  - dennis82 14y ago
    Cloudera is primarily a consulting company, as are most open-source companies. There have been only 3 successful open source companies ever: MySQL, Jboss, and Redhat
    - mistercow 14y ago
      >There have been only 3 successful open source companies ever: MySQL, Jboss, and Redhat See now, there's just no reason to go around saying things like that. Even if that were true (it's not), how would you know that it's true? Do you have a complete database of profitable businesses in your head? I doubt it. A significant number of open source companies are privately held, and there's really no telling how successful they are. Anyway, right off the bat, you missed Mozilla Corporation. Beyond that, the question of whether a company that does nothing but develop FOSS is irrelevant. The important question is whether developing FOSS can be a major part of a successful business strategy. You might start by asking Google and Apple.
      - 2muchcoffeeman 14y ago
        Isn't Mozilla Foundation a non-profit? Wikipedia says it owns a taxable entity, the Mozilla Corporation, but gets the majority of it funds from donations from Google. I think the companies listed only develop Open Source software and sell services. Google and Apple may use and support Open Source projects, but the real money makers are proprietary. I agree that the list is still wrong.
cardine 14y ago
Just because you can make money with open source doesn't mean it is a good business model.
- mindcrime 14y ago
  Open Source isn't a business model anyway, and it never was. It's a development model. Building a business around Open Source implies the need to develop a correspondingly suitable business model, but "open source" per-se is not a business model.
Avshalom 14y ago
Also note that for any thing that relies heavily on art assets, specifically games, open source is largely irrelevant.
mgk 14y ago
Our main product is a desktop application built on top of the Firefox web browser. It is triple licensed GPL/LGPL/MPL. We make money by selling add-ons and a plus version, all of which is also sold under an OSS license (modified BSD). Similar to what Red Hat does, we modified the BSD to prohibit the use of our trade name (International registered wordmark) in any secondary distros of our OSS. In the end, all you have is a brand. Protecting that, protects the revenue stream.
mindcrime 14y ago
Our[1] entire model is based around open source software. And I mean real open source software... developed in the open, with an open bug tracker, discussion on public mailing lists, etc. Now, we don't have a lot of outside contributors at the moment, but we're certainly open to them and the code, bugs, etc. are already "out there". And all (or almost all) of our stuff is (or will be) Apache License V2 licensed. Eventually we'll have a mix of both "productized" versions of existing projects (somewhat akin to the way Red Hat "productize" Linux) and projects that we started and wrote the bulk of the code for from scratch. Our goal is to very much follow the Red Hat model with subscriptions being a major part of our revenue stream, and then complemented by professional services, training and other add-ons. In the end will we "make money with Open Source"? I don't know, but we're going to try, because A. it's what we believe in, B. it's The Right Thing To Do and C. it makes the world a better place whether we succeed or fail. [1]: http://www.fogbeam.com http://www.fogbeam.com
jasonkester 14y ago
Indeed. That's never been in dispute. You can also make money playing violin in the subway. The thing is, if you want to make money, there are a lot better ways to make money than playing violin in the subway. And if you want to make money with software, there are a lot better ways to do it than to give your product away and hope that some of your users will give you charity or pay you for support. Wait until we see a case study come through about a company selling a SaaS product who decided to stop charging subscription fees and instead open source it and charge for support, showing how that was the key to how they made their fortune. Then maybe we can talk about this as an option worth recommending over simply selling your software for money.
- elviejo 14y ago
  Mmhh how about Automatic with wordpress?? They give their product for free and yet have a SaaS ? Or how about OnVelocity? They provide a source code repository and have hosted version. Or SugarCMS ? Or couchdb with couchbase? It seems to me that there are plenty of Saas companies that share their products as open source.
  - jasonkester 14y ago
    To quote the post you're replying to: "Indeed. That's never been in dispute."
  - rmason 14y ago
    Automattic venture round http://gigaom.com/2008/01/22/wordpresscom-creator-raises-29m/ http://gigaom.com/2008/01/22/wordpresscom-creator-raises-29m... SugarCRM venture round http://www.sugarcrm.com/about/sugarcrm-investors http://www.sugarcrm.com/about/sugarcrm-investors CouchBase venture round http://www.venturecapitalupdate.com/funding/08/16/couchbase-raises-14-m-of-series-c-funding.html http://www.venturecapitalupdate.com/funding/08/16/couchbase-... If you raise tens of millions of dollars you can put off the need to become profitable for quite some time ;<).
- sounds 14y ago
  You can also make a lot of money today by selling your manufacturing off and watching it relocate to China. There's a balance between monetizing before the next quarterly earnings call and developing a real product. I believe free software is an industry-wide sea change and any company that fails to adapt will go the way of the dinosaur. I've also seen plenty of people try to argue that you can't make money on free software. I'd like to discuss it – anyone around here feel that way?
dedsm 14y ago
is this a 1994 post?
jeffh 14y ago
Disclaimer: I work at ActiveState, named in the article. I'd just like to point out that ActiveState is not VC funded and is profitable. We are able to grow other parts of the business from core products that are enhanced open source (much, but not all, of which is contributed back to the core open source projects). Most of this is in support and services, but we also have highly regarded tools products and a popular IDE (Komodo, of which we fully open sourced the core editor). Not sure why there are so many negative vibes to this article.

57 points by shawnjan8 14y ago

I know this article is focused on the business level, but I'm finding this to be true on a personal level as well. Contributing to open source not only leads to personal improvement but it essentially creates a public portfolio of your work. This can lead to more exposure which in turn can lead to more opportunities (and better paid ones too). Open Source might not yield immediate benefits (i.e a paycheck) like say freelancing, but it is an investment in your future.

rburhum 14y ago

I am just surprised that in 2013 we are still having this discussion. There are several ways "to make money with OS"; Service-based models (like support), Dual-licensing models (think Qt, MySQL, etc), Community vs "Enterprise" packaging, Extensions to popular packages, Consulting, Platform ownership, etc etc etc. Why such big surprise?!?

shawnjan8 14y ago
I don't think it's a huge surprise, I just think that there is a lack of understanding for a lot of people. Articles that may encourage more open source are always welcome in my books :)
ArbitraryLimits 14y ago
Hacker News and the Harvard Business Review aren't really the same "we."
davidw 14y ago
It's certainly possible, but for many people, it's an added obstacle. I've been doing open source since 1997, and love it, but it's so much more difficult to find a way to make money off it than simply selling some product or service. That said, if you're not using open source software as part of your infrastructure, keeping only the 'crown jewels' proprietary, you're probably doing it wrong.

deleted 14y ago

[deleted]

paulhauggis 14y ago

Can you? yes. But it's going to be very difficult. Let's say you have a really popular open source project with an enterprise version (which pays your bills). Anybody can start up a competing app with similar features and either give it out for free or charge, making it more difficult for you to make money and stay in business. The alternative is to have a service-based business. For one or two people, this isn't very scalable.

rmason 14y ago

This story is a bit misleading. If you study the successful companies using open source as a business model you will find they all raised large amounts of venture capital. That was during the window when open source as a business was a brand new idea. That window has now all but closed and it is exceedingly difficult to find examples of successful companies that bootstrapped their way to success running an open source business.

rxin 14y ago
What about Cloudera?
- dennis82 14y ago
  Cloudera is primarily a consulting company, as are most open-source companies. There have been only 3 successful open source companies ever: MySQL, Jboss, and Redhat
  - mistercow 14y ago
    >There have been only 3 successful open source companies ever: MySQL, Jboss, and Redhat See now, there's just no reason to go around saying things like that. Even if that were true (it's not), how would you know that it's true? Do you have a complete database of profitable businesses in your head? I doubt it. A significant number of open source companies are privately held, and there's really no telling how successful they are. Anyway, right off the bat, you missed Mozilla Corporation. Beyond that, the question of whether a company that does nothing but develop FOSS is irrelevant. The important question is whether developing FOSS can be a major part of a successful business strategy. You might start by asking Google and Apple.
    - 2muchcoffeeman 14y ago
      Isn't Mozilla Foundation a non-profit? Wikipedia says it owns a taxable entity, the Mozilla Corporation, but gets the majority of it funds from donations from Google. I think the companies listed only develop Open Source software and sell services. Google and Apple may use and support Open Source projects, but the real money makers are proprietary. I agree that the list is still wrong.

cardine 14y ago

Just because you can make money with open source doesn't mean it is a good business model.

mindcrime 14y ago
Open Source isn't a business model anyway, and it never was. It's a development model. Building a business around Open Source implies the need to develop a correspondingly suitable business model, but "open source" per-se is not a business model.

Avshalom 14y ago

Also note that for any thing that relies heavily on art assets, specifically games, open source is largely irrelevant.

mgk 14y ago

Our main product is a desktop application built on top of the Firefox web browser. It is triple licensed GPL/LGPL/MPL. We make money by selling add-ons and a plus version, all of which is also sold under an OSS license (modified BSD). Similar to what Red Hat does, we modified the BSD to prohibit the use of our trade name (International registered wordmark) in any secondary distros of our OSS. In the end, all you have is a brand. Protecting that, protects the revenue stream.

mindcrime 14y ago

Our[1] entire model is based around open source software. And I mean real open source software... developed in the open, with an open bug tracker, discussion on public mailing lists, etc. Now, we don't have a lot of outside contributors at the moment, but we're certainly open to them and the code, bugs, etc. are already "out there". And all (or almost all) of our stuff is (or will be) Apache License V2 licensed. Eventually we'll have a mix of both "productized" versions of existing projects (somewhat akin to the way Red Hat "productize" Linux) and projects that we started and wrote the bulk of the code for from scratch. Our goal is to very much follow the Red Hat model with subscriptions being a major part of our revenue stream, and then complemented by professional services, training and other add-ons. In the end will we "make money with Open Source"? I don't know, but we're going to try, because A. it's what we believe in, B. it's The Right Thing To Do and C. it makes the world a better place whether we succeed or fail. [1]: http://www.fogbeam.com http://www.fogbeam.com

jasonkester 14y ago

Indeed. That's never been in dispute. You can also make money playing violin in the subway. The thing is, if you want to make money, there are a lot better ways to make money than playing violin in the subway. And if you want to make money with software, there are a lot better ways to do it than to give your product away and hope that some of your users will give you charity or pay you for support. Wait until we see a case study come through about a company selling a SaaS product who decided to stop charging subscription fees and instead open source it and charge for support, showing how that was the key to how they made their fortune. Then maybe we can talk about this as an option worth recommending over simply selling your software for money.

elviejo 14y ago
Mmhh how about Automatic with wordpress?? They give their product for free and yet have a SaaS ? Or how about OnVelocity? They provide a source code repository and have hosted version. Or SugarCMS ? Or couchdb with couchbase? It seems to me that there are plenty of Saas companies that share their products as open source.
- jasonkester 14y ago
  To quote the post you're replying to: "Indeed. That's never been in dispute."
- rmason 14y ago
  Automattic venture round http://gigaom.com/2008/01/22/wordpresscom-creator-raises-29m/ http://gigaom.com/2008/01/22/wordpresscom-creator-raises-29m... SugarCRM venture round http://www.sugarcrm.com/about/sugarcrm-investors http://www.sugarcrm.com/about/sugarcrm-investors CouchBase venture round http://www.venturecapitalupdate.com/funding/08/16/couchbase-raises-14-m-of-series-c-funding.html http://www.venturecapitalupdate.com/funding/08/16/couchbase-... If you raise tens of millions of dollars you can put off the need to become profitable for quite some time ;<).
sounds 14y ago
You can also make a lot of money today by selling your manufacturing off and watching it relocate to China. There's a balance between monetizing before the next quarterly earnings call and developing a real product. I believe free software is an industry-wide sea change and any company that fails to adapt will go the way of the dinosaur. I've also seen plenty of people try to argue that you can't make money on free software. I'd like to discuss it – anyone around here feel that way?

dedsm 14y ago

is this a 1994 post?

jeffh 14y ago

Disclaimer: I work at ActiveState, named in the article. I'd just like to point out that ActiveState is not VC funded and is profitable. We are able to grow other parts of the business from core products that are enhanced open source (much, but not all, of which is contributed back to the core open source projects). Most of this is in support and services, but we also have highly regarded tools products and a popular IDE (Komodo, of which we fully open sourced the core editor). Not sure why there are so many negative vibes to this article.