Open Source – not a Business Model

I wince every time I see Open Source discussed and realize the author is talking about a small number of noisy startups who like to think Open Source is some magic wand they use to sell products. It was heartwarming to read Matt Asay’s 2011 Red Hat article and through it Glyn Moody’s 2010 Red Hat article. Also quoted is Matt Aslett’s 2008 451group article. Open Source products do not make money.

Expertise in Open Source can make money – be you a consultant (IBM, Thoughtworks etc) or a support company (of which Red Hat is the big player). The products themselves don’t, unless you resort to extortion, which sadly far too many startups seem to (i.e. here’s my open source license that I know you won’t want, and here’s my ugly commercial license that you’ll have to pay once my “first one’s free” open source product has stuck its teeth into you). I hate the extortion companies, they are proprietary companies who abuse the open communities from within; wolf in sheep’s clothing if you will.

This is all seen as a terrible thing. In the startup world [which sadly is far too noisy at conferences simply because loud marketing and building brand is an important tool for small companies] not being profitable is bad. There are places however where profit is not king.

Firstly there are loss-leaders. Small corps can’t afford these, but with its one cash-cow product Google can afford many loss-leaders; and with its two cash-cow products, Microsoft can afford just as many (or twice as many? :) ). Presumably other companies can; it depends on how you structure the company related to your income and whether you are a big-margin or small-margin company. Big margin companies can afford to play more than small-margin imo; BEA for example with their ’12 big wall street’ customer strategy could afford to do such as the 13th big customer will pay for a lot of giving away of shareholder value [12 and 13 are random numbers here].

Secondly there are non-profits themselves. I don’t mean the open source foundations; but those out there doing good in the world. Sadly they don’t have much developer time to offer and Open Source has always worked best when the user can become a part of the solution instead of expecting a customer/vendor relationship. Governments are a non-profit with lots of developer cycles, however putting that to valuable work looks difficult. The United States structure (very independent state government) creates a lot of inefficiency in this area and probably means there are not enough developers working in a single ecosystem to support communities easily. Looking at the report card (OSS for America) I think there’s a correlation with higher scoring departments generally being the ones without state-wide redundancy.

Academia is a third area. Sadly universities seem to be driven towards being profitable entities; there’s a lot of potential here and it’s unfortunate that so many new open source projects from academia are pure crap [I don't include the 70s->90s internet creation projects in this, different era]. The issue seems to be that these projects are the brainchild of some professor, but worked on by an ever rotating set of students. Keep changing your employees every year and you’ll find that your product too is rotten swiss cheese with an identity crisis.

Lastly there is the huge community of individuals. So many projects are esoteric and the interested individual could be working in a shoe store for all we know. Put enough interested people together and you’ll have a successful project.

For each there is a different item the Open Source world needs to be working on:

* Commercial entities. Filter out the noise. Learn to avoid brittle Open Source products from a single entity. If the answer to “How can I become a committer?” isn’t there, consider it freeware.
* Non-profits. Get in there and educate. This has been the focus for a couple of years (with individuals doing it for decades before that) and seems to be going fairly well. NASA are getting it (though as always their budget is squeezed while the massive military budget remains inviolate), and Open Source for America seems a positive item. Do other countries have the same? Has anything come of the San Francisco and California Open Source pushes? I know there are lots of pushes out there to get governments to use Open Source, but for Open Source users are easy, it’s contributors that are important.
* Academia. I keep an eye on Ross Gardler and OSS Watch in the UK here, they seem to have the right drive. I wonder if there’s a US equivalent, or if this is one of those ‘anything that smells socialist must be evil’ items.
* Individuals. I wish you could measure this one. Has the move from blogging to twitter & facebook made it harder to find projects?

A lot of waffle. What’s my one line twitter message?

“Open Source. It’s all about contributors. What’s your contributor recruitment strategy?”

This entry was posted in Uncategorized. Bookmark the permalink.