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Follars.com Free, Open Source Dollars
Making Money from Free & Open Source Software
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The web site Follars.com was created to answer the trillion dollar question: How can companies make money from open source software? . Follars stands for Free, Open Source Dollars.
Free & open source software (FOSS) is changing the business rules of the software industry at a pretty good pace. It is an interesting paradigm, and appears to be a worthy competitive business model to the closed/proprietary business models that have held sway so far. However, the question that has dogged practically everyone in the FOSS domain is that of making money. Well, perhaps it is not a trillion-dollar-question, may be it is only a billion-dollar-question, oh all right, if you insist, at the very least it is a million-dollar-question for many companies.
The idea behind Follars.com is to collect at one place all the insights, thoughts and resources for the problem of making money from free & open source software. No doubt, some companies (such as Red Hat, for instance) have started making a reasonable amount of revenues, but still many feel that we have a long way to go before we can feel confident that there is a sustainable revenue model for FOSS. There are a number of bright minds and exceptional companies that are putting their thinking caps for this.
Follars.com hopes to be a small catalyst that facilitates this thinking process. By being a site focused on this problem alone, we hope to be a forum where ideas are exchanged, explorations done and sustainable revenue (and profit) models for FOSS are evolved. At the very least, we at Follars.com hope to have made more people aware of this issue.
We hope you find this site to be of use. We d be grateful if you could send across any link or resource suggestions, or your own thoughts on this question, so we could consider using those to everyone benefits here. Suggestions & opinions may be sent to Narsi
We are starting off the site with providing web references to many useful articles & resources on this subject.
For regular updates on FOSS revenues models and case studies, see Follars Blog
See also the following resources for IT: SAP ERP Portal, Linux Future, FLOSS Directory, Future of IT, Software, IT Jobs Portal @ eIT.in
Making Revenues from Free & Open Source Software - References
1. Making Money with Open Source An Interview with Kim Polese Provides examples of various companies and products ( in CRM, Compliance, PBX/Telecom) who are making revenues with, or because of, open source software. She also provides info about her company SpikeSource which is into testing, certifying & supporting open source software.
2. How to Make Money off Open Source from eWeek.com. A short article, but provides some brief examples of MySQL & SleepyCat software s revenue models primarily dual licensing.
3. Open Source Case for Businesses from Open Source Initiative web site suggests four ways to win ( aka make money); Support Sellers (product free, money from support), Loss Leaders (make open source software a loss leader & market positioner for a closed software), Widget Frosting (use open source as a free widget added to your main product), Accessorizing (sell accessories related to open source software)
4. Setting up Shop - The Business of Open Source Software from Frank Hecker. This is an excellent thought article by Frank Hecker. It takes time to finish reading it, but it worth the time spent, especially if you have not done a lot of reading earlier on open source paradigm and business models.
Abstract: Commercial software companies face many challenges in growing their business in today's fast-moving and competitive industry environment. Recently many people have proposed the use of an open-source development model as one possible way to address those challenges. This document investigates the business of commercial open-source software, including why a company might adopt an open-source model, how open-source licensing works, what business models might be usable for commercial open-source products, what special considerations apply to commercial products released as open source, and how various objections relating to open source might be answered. The target audience is commercial software and hardware companies and individual software developers considering some sort of open-source strategy or just curious about how such a strategy might work.
In addition to the four revenue/business models discussed at the OSI link presented above (support sellers, loss leaders, widget frosting & accessorizing), this resource presents four more: (as mentioned, these four courtesy Setting up Shop - The Business of Open Source Software) (1) "Service Enabler": where open-source software is created and distributed primarily to support access to revenue-generating on-line services (2) "Brand Licensing": in which a company charges other companies for the right to use its brand names and trademarks in creating derivative products (3) "Sell It, Free It": where a company's software products start out their product life cycle as traditional commercial products and then are continually converted to open-source products when appropriate (4) "Software Franchising": a combination of several of the preceding models (in particular "Brand Licensing" and "Support Sellers") in which a company authorizes others to use its brand names and trademarks in creating associated organizations doing custom software development in particular geographic areas or vertical markets, and supplies franchises with training and related services in exchange for franchise fees of some sort
5. How Do You Make Money from Open Source Software from Clark Lane @ Blog Spot Four models are discussed: (1) Paid support, (2) Dual license, (3) Upgrade to proprietary software, and (4) Offering a hosted service.
6. 101 Ways to Make Money off Open Source href="http://www.manageability.org/blog/archive/20030611%23101_ways_to_make_money1/view">http://www.manageability.org/blog/archive/20030611%23101_ways_to_make_money1/view - Well, not exactly 101 ways, but the page provides a good list of examples by which companies had made, and are making, money from open source software
7. Making Money with Open Source Software from GID Forums Some interesting ideas and models for making money from open source software discussed at this forum. Also are discussed the issue of taking patents on (rather not very complicated) ideas the general feeling in the crowd appears to be that people should not be allowed patents on ideas as that would stifle creativity.
8. Making Money in Open Source with Active Directory Integration for Roller Ironically enough, one area to make money in open source is in integrating open source products with Microsoft.
9. Using Open Source to Make Money on Generic PCs With margins getting razor-thin in the PC-selling business, some smart companies are turning to Linux OS as the way to differentiate and to make more profits. The idea is to bundle open source applications with PCs and offer a support process that makes it easier for users to use it.
10. How to Make Money from Open Source Scientific Software Some ideas are thrown open for the public to discuss: (a) Sell hardware, (b) Sell services, (c) Dual-license your software, (d) Use the academic community, (e) Differentiate between single run and high-throughput versions ( see also another article in the same series)
11. Thinking about Software Licensing for a Small ISV and the Issue of Open Source by Dan Bricklin (inventor of the original spreadsheet href="http://www.bricklin.com/visicalc.htm">Visicalc), written with a perspective of how do small software companies make money from open source software?
12. Shared Source Initiative Open Source Software from (hold your breath!) Microsoft An interesting page on Microsoft s perspective on Open Source software and its opinions on the business models for Open Source software developers. According to the Microsoft,
The three most common ways these companies make money indirectly include: (a) Proprietary Software Sales: Companies may build proprietary software that works with open source software. An example of this approach is IBM's WebSphere software that runs on top of the Linux operating system and carries a retail price of roughly $50,000. (b) Service Contracts: OSS tends to be updated frequently and may require significant customization to run on specific computer hardware or to interoperate with other applications. Service companies can earn significant revenues by providing organizations service support for these custom-software packages. (c) Hardware Sales: To attract buyers, computer makers may bundle no-cost OSS on their hardware as an additional purchase incentive.
(see also: Microsoft Open to Open Source)
13. Free Code for Sale The New Business of Open Source The sidebar to the article discussed five models for making money from open source software.
Open Source + Service - Companies sell support and services around open source software. Examples: Red Hat, JBoss Mixed - An open source code base with proprietary add-ons. Open Source + Buy Off - Companies offer a proprietary license for their open source software and redistribute it without having to make the code changes available to the public. Example: MySQL Open Source + Aggregation - Companies assemble various open source software packages into integrated units that are easier for CIOs to consume. Open Source + Hardware - Hardware makers use open source as the foundation for the software that runs their machines. Example: Cisco is a big player in this arena.
14. Open Source Companies Chase Steady Money Crux: Many industry veterans argue that open source is accelerating a shift that has been going on in the software industry for some time: Rather than hinge their business on big-ticket license contracts, software providers increasingly rely on recurring maintenance revenue . This shift fits in neatly with Open Source software, where the software is (generally) free. Thus, companies with focus on open source maintenance contracts as the key could benefit significantly, argues this article.
15. Investors to Commercialise Open Source A brief discussion of intended revenue models for open source start-ups funded by Simula Labs. An investment venture will try to replicate the model of Gluecode, an open-source start-up acquired by IBM, with a fund dedicated solely to open-source software. The venture, called Simula Labs, will take open-source development projects and seek to create businesses around them. That approach was employed at Gluecode, a company founded in 2001, which was bought by IBM.
16. Making Money Using Open Source Software Lots of responses from folks, some of them so-so, some of them really interesting. Some relevant response summaries: (a) Not all software is written for sale as software; there seems to be somewhat of a perception that this is the only kind of software out there. For example, where I work at a research hospital, the software I work on is used for analysis of MRI images. It's not GPLed, but it's open source, free, and pretty much anyone can get access. Our money comes from grants . (b) trolltech [trolltech.com]: They created the QT library, and they are giving it away under GPL. They make a profit from companies that need the library for non-GPL products. c) Make software that is VERY extensible. So much so that the open-sourced "guts" of the software are pretty much a framework for the extenstions. Then, sell consulting to design, write, install, support, and maintain those extensions. (d) The question you should be asking is 'How can a company make money, if it gives away software for free?', and the answer should be more obvious - it can do so if its product is not the software it's giving away. For instance, IBM's "product" is the tailor-made services and consultancy it provides. The software is merely a tool they use to provide it (e) I pay plenty of bar tenders to make me "Open-source" drinks that I know damn well how to make on my own because I'm just no good at it or I don't want to take the time to go to the store or I'm too tired to make it etc...People pay for hamburgers at restaurants all the time, even though even little kids know what goes in them, because they don't want to go to the store and buy all the stuff and they don't have the tools to prepare it or the skill to do it well. They just want to eat. It's a matter of convenience and skill and action this is a good response, go read it! (f) A business plan that is based on support is at direct cross purposes with creating high-quality, easy-to-use software.
17. The Problem with Commercial Open Source Software, the CXO Review
18. How to Make Money from Open Source Builder AU ( see also from Builder AU Making an Open Source Living)
19. Making Money from Free Software - eWeek Various business models from vendors (such as MySQL, Red Hat, TrollTech) are discussed.
Quotable quote from the article: Marten Mickos, the CEO of MySQL AB: "I believe that it is possible to build a fantastically profitable business on free software, but one must realize that open source/free software is not a business model in itself. It is only a production and distribution method Some of those who make money off free software make tons of it. Look at HP, IBM, Google, Yahoo, Amazon and the pure open-source vendors Red Hat, JBoss and MySQL"
20. A Large Number of Interesting Answers for the Question from FogCreek Some examples from the article: a) ADA Core: makes GNAT ADA compiler (see www.gnat.com ). Their software is GPLed but they successfully sell it (along with support) to large corporations. They ask their customers not to distribute the latest version but instead freely distribute the previous version for free. That way their customers pay for the latest/greatest technology and the support that's needed for it while the rest of the world gets a free Ada compiler that's been tested on some very large/complex projects. b) Maybe you could become an expert in some open source application. Sell these skills as a contractor doing custom modifications and applications. The mySQL and other database projects look like good candidates. c) It's a lot easier to make money when there's money flowing through your app or your app helps people make money. d) There are lots of programmers who are excited to write web servers or blogging software or whatever. There's no money to be made selling that kind of software. There's money in the things that all of these folks don't want to do. Sure, maybe some of that is developing less technologically sexy applications, but also in making easier-to-use interfaces, documentation, and (you knew it was coming) support. e) And more must read the various answers given some of them are really insightful f) Beware! Some spammers have also included a lot of MLM messages, but these happen after most of the insightful answers have been given!
21. Can Open Source IT be a Money Pit? a discussion @ ZDNet. Doug Kaye s interview with Philip Greenspun. Summary: Greenspun explains how an IT shop's leveraging of open source's openness can lead to the same sort of costly maintenance nightmares that customizations of proprietary software have led to. In the same breath, Greenspun adds, that maintenance headache can be the source of millions of dollars in revenue to an open source developer (or IT services company) provided that the focus is on Fortune 500 customers who can pay and that a very fine line doesn't get crossed
22. The Subscription Model A Necessary Trend for Open Source Deployers one of the first serious articles that tried to answer the question, written in Aug 2004. Some nuggets:
When I buy a newspaper I am actually buying an editorial style If I go online to get the news (for free), I have to do the work of selecting and filtering the news To get an aggregation of the news I want delivered in a style that helps me and with biases I understand, I subscribe to a newspaper.
JDS (Sun s Java Desktop System) is just like this. Almost all the elements that comprise it come from open source communities. You could go get all those parts yourself - they are all available gratis. But then you'd have to integrate them yourself, support them yourself
Instead, Sun acts like the editor-in-chief of the JDS 'publication'. Staff select the software components to include and exclude, work to integrate them, constribute to each of the open source communities to improve their compatibility and completeness. Sun packages and delivers the final publication, offers support and updates, fixes security exposures, offers indemnity and generally joins the communities so you don't have to.
23. Who s Making Money from Linux? Subscriptions & services may be the wave of the future, according to this April 2003 article from eCommerce Times. Tries to answer how pure-play Linux companies can make money from open source. Companies such as Red Hat and Suse are the focus of this article.
24. The Both-Source Way to Open Source Revenues discusses the dual-licensing method, with brief examples of SleepyCat Software, MySQL & TrollTech
25. Opera Making Big Profits from Free Software The title appears to be misleading, because the revenues appear to be happening at least partly from licensing their software, which isn t exactly in keeping with open source or free software principles. Part of their revenues appear to be generated from services provided by the software rather than by the software itself, so I guess it s OK to classify that as revenues from free software.
26. Making an Open Source Living for Small Businesses ZDNet article - Most of the examples for open source revenue models tend to be for very large companies like IBM and Novell. In this article, an interview is done with a small Belgium-based consultancy specialising in projects built around Apache Cocoon, a Java-based application framework
27. Paying at the Point of Value Simon Phipps, Sun Microsystems interesting way to look at the service/support revenue model. Simon s view is that Sun s way of making money from open source is to have the customer pay as and when value is created by the software, not during the time of purchase of the software. To quote, The real point is that the deployer is liberated to pay just for the things that result in value. It also opens up new ways of delivering the value - online, as a utility, by subscription and more. Open source on the deployer side of the glass is the shift to payment at the point of value instead of at the point of acquisition of the bits. Sun's new software business models are about being the perfect supplier at that point of value. That's how it is with Solaris 10, for example.
28. Supporting an Open Source Software Products Company from Service Revenues - Allen Shaheen & Philip Greenspun. This article was written in 2001. Some quotes:
In the year 2010, all enterprise software will be free and open-source. The information system needs of organizations are diverging and packaged solutions are becoming increasingly less viable Pressure from the Web revolution pushed IT project schedules from 3 years down to 3 months and closed-source packaged software, with the exception of commoditized standards such as relational database management systems and operating systems, has thus far played an insignificant role in building the new economy.
As information system designs continue to diverge, organizations will become increasingly skeptical about the claims of any software vendor. Instead of vendors getting paid for shipping a CD-ROM that customers start using, enterprise software companies will be paying customers to invest in experimenting with their proposed solution.
A Product + Service >> Pure Service - A company that combines an open-source product is much healthier than a pure services company. First of all, the open-source product functions as a knowledge management system. The best knowledge management systems involve several layers of refinement, approval, and ultimately publication. This happens to be exactly the process by which lines of code turn into a released software product
29. Approaching the Open Source Community Discusses the total cost of ownership and how this concept is related to the economics of free and open source software. Provides an interesting analogy with advertising people do not pay to watch advertisements, but the advertiser pays for it and ultimately this cost gets factored in the product and the consumer pays for it! The author also argues that the software product perhaps is not the highest component of cost in the TCO (total cost of ownership), perhaps it is the service and support. If that be the case, perhaps there is an economic rationale in giving the product free, but make revenues from support and service. However, the author also states that However, the question is whether (open source) software development really is a business case. Considering it as ``a special case of academic research'' might be a more suitable approach
30. Open Source-onomics Examining some Psuedo-economic Arguments about Open Source Interesting article, picks up each of the points about the unviability of open source economics and does a good job of refuting each. The points discussed are:
31. Making Money from Open Source I started a small open-source class library project a few months ago. I promoted it among developers, and these days the project's website has exceed 100 hits per day. What next steps would you recommend to do to make it profitable? asks this small/individual software developer. And gets some useful answers in return.
32. Open Source Profits are Possible, but Need Care - You can make money from open source software, but you need to be sure not to leave your community out in the cold while doing so, according to MySQL's CEO. MySQL chief executive Marten Mickos has called for a balance between freedom and profit in open source projects. Mickos said he believes a good business can arise despite that duality by satisfying both constituents: paying customers and eager developers. To keep paying customers satisfied, companies must make a difference between the products they charge for and the products they offer for free, but not go too far, he said.
33. Open Source as a Business Approach - The purpose of this web page is to describe, in general terms, how open source business models work so as to provide a starting point for discussion of what would be involved in translating the open source approach from the software to the biotechnology context.
34. Some Ideas on Constucting Open Source Revenue Models Matt Asay provides the following insights on open source business models: a) Price Matters - Part of the drive toward open source is price. It's not the most important, but it is important. Hence don t price your product too high or too low. b) Open Source is Never 100% Pull - Open source shouldn't be about push, but it's never completely about pull, either. Not if you're looking to grow a serious company. c) Document Everything - one way to facilitate the pull phenomenon is to heavily, clearly document your product. It will dramatically lower your cost of sales, because it will mean far less "pushing the pull." d) Revenues Now - Money matters. It matters now, not two years from now. e) Be Open & Permeable - Put your pricing, business model, product information, forums, etc. online. Accessible to all.
35. An Open Source Business Model A somewhat difficult read, but this is what we understand as the summary: A proper open source model needs two enhancements when compared to those that exist: A way to increase the revenue stream on the one side; and a way to make things more goal driven and focused on the other.
36. Is the Open Source Model Sustainable? from Joel on Software some opinions: a) the only viable businesses based on OSS will be support and bespoke development based on OSS or closed tools like Oracle. I would not bet the house developing Postgres SQL further but I think that an add-on to Postgres SQL may be saleable, for example. b)..Doxygen creates our documentation, Perl runs our unit tests, twiki and apache drives our internal communication, gcc compiles our code, openssl provides crypto support, cygwin provides us developers with useful tools. Thats just the tools _everyone_ uses, then theres the 1001 minor projects that people use to make their daily lives a little easier. Can you imagine how much less money we'd be making if we had to buy or develop every one of those things? And a counterpoint to the last point: Can you imagine how much less money you will be making when someone clones your product and releases it as free open source? ! c) Individuals contribute to Open Source software because it enhances their reputation and makes it easier to get higher paying jobs. Companies contribute developers to Open Source projects to either hurt a competitor or to enhance the value of another software or service offering. d) I think a lot of commercial software developers will move into the area of entertainment, customization and the like, because they often require original and "hard" work that is not easily duplicated or generalized. You hardly ever see any open-source games. e) FOSS must be the biggest joke of a business model
around, you can see why it is supported by developers sitting in nice
comfortable jobs who have no idea where their paychecks come from. The idea
that you make your money through support and consulting is laughable because
guess what, commercial software also makes additional money from those exact
sources. f) I don't think there has ever been a profession that has killed itself like software developers who are just giving everything away for free.
37. MySQL, SleepyCat & Trolltech Say They Prove the Strength of Dual-License Model Trolltech AS, MySQL AB and Sleepycat Software are strong examples of second-generation open source companies that have established growing, sustainable businesses based on open source software The companies provide dual-license software to some of the largest customers in the world, including Cisco, Google, IBM, Motorola, Sharp Electronics and Yahoo!... As second-generation open source vendors, MySQL AB, Sleepycat Software and Trolltech AS make the majority of their revenue from selling software licenses. This license-based business model offers higher margins than services-based businesses Under the dual licensing model, vendors offer their products under both an open source license and a commercial license. This allows open source projects to use the software at no cost, which contributes to widespread use and testing of the software and the fast growth of a large installed user base. Companies redistributing the software as part of commercial products can also get the benefits of the open source software by purchasing a commercial license, which releases them from requirements to publish their source code. Commercially-licensed customers generate revenue for the open source vendors, which contributes to the rapid development of high-quality software
38. How to Make Money from Open Source? - This guide examines the commercial opportunities for open source software. It investigates the different ways of generating revenue from open source software and how to reduce development costs by using open source software in your development life cycle and how to select open source software technologies for building that next knockout product. It also investigates how to gain access to national and international markets through using the open source marketing methodology.
39. Embedded Linux Black, White & Maybe Green discusses the commercial viability of open source for embedded software projects.
40. An Analysis of Open Source Business Models (PDF) - analysis of various open source business models. Looks at the various players involved: software producers (for instance, Microsoft), distributors (Red Hat), and third party service providers.
41. Some Ideas on Constructing Open Source Revenue Models InfoWorld Article
42. Open Source Economic Models Discusses the four economic models: service sellers, loss leaders, widget frosting & accessorizing. Examples discussed: Digital Domain (Zope), Red Hat, Cygnus Solutions, Netscape, O'Reilly & Associates, Inc., VA Research
Quotable quote: Most programs have the following values:
What open source does is remove the market and monopoly value from a product and exponentially increase the use value by making the product more stable and robust product.
43. Open Source Software Risks & Rewards (PDF) discusses benefits & risks and market assessment of vendor revenue models. From the Burton Group.
The report says under Open Source Software Risks :
Open source software is not quite as free as you believe a) Software is usually < 5% of the total cost of ownership of most projects b) Still requires training, service & support, which may cost more than the commercial product it s replacing c) New business models charge for patches, upgrades & updates
Open Source is commoditizing from the bottom of the stack OS Linux, BSD, File, Print & Web Server SAMBA, CUPS, MySQL, Apache, Application Server & Database: Tomcat, JBoss, Applications: OpenOffice, Tiki, PHP-Nuke.
How will (non-open source) vendors compete with free?
a) Hardware, service & support ( replace UNIX hardware..) b) Management & integration ( opportunities exist for Red Hat, Novell, CA) c) Dual license strategies d) Application & data lock-in (Oracle data & applications; WIN 32 APIs, NTFS Netware Volumes) e) Software becomes the vehicle to deliver IP f) Or just sue L (the SCO way?)
44. Indirect Sale Value Models in addition to the four models (service sellers, loss leaders, widget frosting & accessorizing), also discussed three others (a) Free the Future, Sell the Present, (b) Free the Software, Sell the Brand, & (c) Free the Software, Sell the Content
45. Open Source Software & Open Content as Models for eBusiness - Rather than being merely unworldy and communitarian, open source and open content herald a new wave of business activity that transcends naive economic rationalism, and embody implications for business models that deserve serious study by eBusiness leaders, says the article
46. The Union of Commercial & Open Source Software into Existing Business Models - Open source software combined with commercial licensed software has become a market reality as open source technologies, like Linux and Apache, which are already tremendous market successes, are combined into business models by vendors who want to win in the marketplace. It's happening today and will continue to flourish. Discusses how IT vendors, ISVs, VARs & VADs are doing it.
47. Open Source Business Models a summary of a CIO article, and some more opinions from the author
48. Seven Open Source Business Strategies for Competitive Advantage from IT Manager s Journal. Excellent article. The seven strategies discussed, and some snippets for each:
49. Practical Open Source Business Models - In this article I'll explain how that is, and what kinds of business models lend themselves well to open source software production and consumption.
50. Interview with Larry McVoy @ Kernel Trap Larry McVoy is the founder of BitMover primary BitKeeper author. In this article, he discusses, among other things, his thoughts on sustainable open source business models. Larry discusses the history of BitKeeper, from writing NSElite for Sun (which turned into their still used SCM, Teamware), and the choice to not license BitKeeper under the GPL is also explained.
51. The Secret of Successful Open Source This InfoWorld blog article discusses the success of JBoss in generating sales and revenues from its business model.
52. Open Source Development with a Commercial Complementary Product or Service (PDF) Abstract - Opening the source code to a software product often implies that consumers would not pay for the software product itself. However, revenues may be generated from complementary products. A software firm may be willing to open the source code to its software if it stands to build a network for its complementary products. The rapid network growth is doubly crucial in open source development, where the users of the firm s products are also contributors of code that translates to future quality improvements. To determine whether or not to open the source, a software firm must jointly optimize prices for its various products while simultaneously managing its product quality, network size, and employment strategy. Whether or not potential gains in product quality, network size, and labor savings are sufficient to justify opening the source code depends on product and demand characteristics of both the software and the complementary product as well as on the cost and productivity of in-house developers relative to open source contributors. This paper investigates these crucial elements to allow firms to reach the optimal decision in choosing between the open and closed source models. Key words: Pricing Research; Optimal control; Open Source; Network Externalities
53. Open Source, from the Standpoint of a Commercial Software Developer
54. Ellison Case against Open Source Business Models is Compelling Or Is It? - In the FT interview details of which are provided in this article, Oracle CEO Larry Ellison weighs in on the twin topics of software as a service and the long-term viability, or otherwise of open source business models.
55. Open Source Business Models Listing with Examples Lunar Media Examples provided are Netscape s Open Source Mozilla Browser, Apple Mac OS X, Red Hat, Alladin s GhostScript, Sun s StarOffice, and Mozilla Firefox & Google Partnership
56. Dual-Licensing Open Source Business Models A dual-licensing model is a business model in which a company that markets a commercial software product gives its licensees the choice of two licensing models: Open Source and closed source (or "proprietary"). In this business model, a customer can choose to license the software under the terms of an Open Source license such as the GNU General Public License (GPL). Open Source licenses let licensees sublicense the product's source code to multiple levels of sub-licensees, but require re-licensing in source code format, usually on identical terms. Alternatively, the customer can choose a closed source or proprietary license with more conventional licensing terms that limit his ability to re-license the product, or restrict him to object code sublicenses only. The article dwells further on dual licensing and explains the possibilities in more detail.
57. Open Source Becomes Key Player in Business Models - eWeek Examples mentioned in this article are SugarCRM, SpikeSource, Eclipse, MySQL AB, Zimbra, ActiveGrid & Emic
58. Dual Licensing in Open Source Software Industry from MIT Open Source Archives (PDF) - Abstract. This paper analyses how several open source companies use dual licensing: both open source and proprietary licenses for one product. Three case studies based on the experiences of companies Sleepycat Software Inc., MySQL AB, and TrollTech AS illustrate the issue. Especially the legal and economic requirements of dual licensing are identified. Keywords. Open Source, licensing, business model, copyright, software economics
59. When to be Open, When to be Closed Steve-Parker.org - When does it makes economic sense to be open-source and when to be closed-source? This article discusses this question
60. Making Money from Open Source Software A Panel Discussion Lots of bits and pieces opinions from a variety of individuals and open source companies in this OSCOM panel titled: You can t make money on open source
61. Cottage Services Spring Up around Open Source Projects - CRN Companies such as MozSource and MozDev Group represent a growing number of cottage services springing up around specific, open-source projects such as Mozilla, Linux, Apache and MySQL. Mozilla Foundation President Mitchell Baker said the emergence of such companies signifies a maturing of the open-source industry and the evolution of the channel model for it The open source ecosystem now includes companies such as SpikeSource and SourceLabs, two other for-profit, open-source service companies that launched this fall. Based on a similar business model, each provides open-source stacks, along with consulting, implementation and support services Read more from this article on other examples such as LinuxForce & SQL Fusion
62. The Future of Commercial Open Source Thinktank Summary Report (PDF) - The audience whose inputs constitute this report, comprised of many of the industry.s .thought leaders., was given the following mission: describe commercial open source software in the year 2010 and the process of getting to that end state. Some of the key findings: a) ISVs will look and conduct business very differently than they do today and will be much more b) dependant upon services revenue c) Many of the legal concerns around open source licensing will be resolved or fail to come to fruition d) Open source is not a business model in and of itself e) Open source will be a standard, core element of most compute environments f) Like Linux, open source will achieve ubiquity
63. Dual Licensing Business Model Explained from TrollTech - TrollTech s definition of the dual licensing model:
Dual Licensing is based on the principle of Quid Pro Quo - something for something: This is how it works: In return for the advantages you realize from using a Trolltech product to create your application, we require that you do one of the following: (a) Either: Contribute to the continued development of the product by purchasing commercial licenses from Trolltech. This option secures you the right to distribute your application under the license terms of your choice. (b) Or: Contribute to the Open Source community by placing your application under an Open Source license (e.g. the GPL). This option secures all users the rights to obtain the application's full source code, modify it, and redistribute
64. Dual Licensing Having Your Cake & Eating it Too Linux Insider - Back in 1976, Bill Gates wrote an open letter to hobbyists. He asked, "Who can afford to do professional work for nothing? What hobbyist can put three years into programming, finding all the bugs, documenting his product, and distribute it for free?". Today, Gates has to eat those words because the open-source movement has proven that it is possible to give something away for free and still make money off of it. The trick is to give it away to those who are not going to pay for it and charge those who are willing to pay for it. Oh yeah -- and you have to have something that separates the two, otherwise everyone will get it for free .so goes this article
66. Evaluation of Open Source Licensing Models for a Company Developing Mass Market Software (PDF)
67. Entrepreneurial Open Source Software Hackers MySQL and its Dual Licensing (PDF)
68. How Free+Fee OSS Models Put Vendor Support on Solid Ground
69. Making Money with Open Source Pysc + Tech
70. Open Source Business Models
71. Innovative Software Business Models Intalio s Open Source model discussed briefly in this article
72. Open Source Business Models in Palm Development example of Falch.net
73. New Models, Challenges for Open Source Businesses InfoWorld Article
74. Java EE App Servers Why Pay for Support?
75. Free Revenue Grows Just Ask Your Carrier Blog of Jonathan Schwartz, Sun Micro CEO
76. Open Source Licensing Strategies Must Evolve News Factor Network, 2002 Article
77. Open Source Content Management Systems Redux The Gilbane Conference Report, June 2003
78. Will Money Spoil Open Source? Michael Tiemann is a co-founder of Cygnus Corporation, one of the first companies to make its business from servicing open source software. In 1999, Red Hat acquired Cygnus and appointed Tiemann chief technology officer. Folks from O'Reilly sat down with Tiemann a few weeks after the purchase to talk about the integration of Cygnus into Red Hat, the nature of courting developers, and whether money will ruin the open source movement. This is a Jan 2000 article, but is very interesting and insightful.
79. Free Code for Sale The New Business of Open Source
80. Open Source Trends & Business Models - The report provides guidelines for companies adopting open source models for software development. It provides an overview of the open source commercialisation models most suited to the Irish context and aspects of different licensing models that firms need to be aware of. It summaries the key questions that Irish Independent Software Vendors (ISVs) and Higher Education Institutions (HEIs) need to ask, and outlines the considerations and actions that need to be taken in advance of making a decision to engage in open source development
81. Open Source Business Models & Strategies Research, articles & white papers
82. Blog from the SD Forum January 19, 2006
83. Open Source Software as a Customer Capture Tool with an example of SugarCRM
84. Does Dual Licensing Threaten Free Software? Linux Journal
85. The Voice of IP Open Source & Traditional Business Models Can They Be Buddies?
86. How to Make Money from Open Source Builder AU
87. Will Profit Motives Fragment Open Source Community? eWeek
88. The Economics of Free Software from Business Intelligence Network
89. Seven Open Source Business Strategies for Competitive Advantage IT Manager Journal
90. Interview with John Roberts, SugarCRM Co-founder Open source's alternative appeal continues to expand. Customer relationship management (CRM) software and services is one newly-affected market. Use of SugarCRM is growing despite the current dominance of proprietary solutions from Oracle and Salesforce.com. Listen to John Roberts talk about SugarCRM's origins, and about the way SugarCRM offers both pay-for-support and hosted services options. Find out why some SugarCRM customers have moved from on-demand CRM software-as-a-service towards on-site software deployment. Listen to the interview here
91. Pricing & Business Models for Open Source Software A 1999 Presentation
92. Open Source Business Models in Hawaii Another 1999 Article
93. Open Source Companies Make Profits Aplenty - It's easy to make money giving away software--just don't give away too much of it, appears to the summary of the article.
94. How to Save, Make Money with Open Source IT Manager s Journal
95. Billion Dollar Open Source Businesses?
96. Forfas Report Highlights Increasing Opportunities from OSS for Irish Software Companies see the full report href="http://www.forfas.ie/publications/forfas060724/webopt/forf%C3%A1s060724_open_source_software_report_webopt.pdf">Open Source Trends & Business Models Guidelines for Key Irish Stakeholders (PDF)
97. Why Open Source?
98. The Both-Source Way to Open Source Revenues Internet News, 2004 Article
99. Under The Hood Open Source Business Models in Context (PDF)
100. An Analysis of Open-source Enabled Business Models (PDF)
101. From Volunteer Open Source to Professional Open Source Marc Fluery, JBoss
102. Making Sales While Making Friends
103. Red Hat The Mother of All Business Models
104. Has Open Source Become a Marketing Slogan? Forbes
105. Business Models for Open Source/Free Software
106. Open Source Business Models in Hawaii
107. Your Guide to Open Source Business Models CIO.com
108. An Open Source Business Model
Examples & Case Studies of Companies with Specific Open Source Products
Some interesting tidbits, quotes and other related factoids on the topic, How to make money from open source?
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Follars.com Free, Open Source Dollars Making Money from Open Source
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