open source business models
DESCRIPTION
My presentation at the Better Software 2010TRANSCRIPT
Open source business models
Better Software 2010
Florence, May 5/6th
Speaker: Alessandro Nadalin
Who am I? OS passionate & enthusiast PHP developer SEO consultant Freelance used to work with OS products Freelance used to give back to the OS market
✔ Member of the Joomla! Bug Squad✔ GPL plugins for GPL softwares
Nerd✔ Blog✔ LinkedIN
OS business models @ Better Software 2010, Florence
Reasons why I'm here
Improve consciousness about OSS power Clarify OS can be rewarding Proove OSdriven business models can be
succesfully achieved Florence is nice :)
OS business models @ Better Software 2010, Florence
Disclaimer
Do I hate companies working with closedsource software?
No, love & peace dudes.OS business models @ Better Software 2010, Florence
Table of contents
OS vs CS models✔ Where do we get into?
✔ How do we get into?
OS case study✔ Who's succefsully working with OSS?
OS rights✔ We are not protected!
✔ We are not rewarded!
Hints Cya
OS business models @ Better Software 2010, Florence
OS vs CS: what can we do?
1: We sell the software,2: We sell software support,
3: We develop/boost the software,
4: We train people for our software.
OS business models @ Better Software 2010, Florence
VS1 CASE: we sell the software CS companies are usually forced to sell their
software to survive✔ CS companies usually give trial versions for free
✔ Timelimited✔ functionallylimited
OS companies can easily choice between:✔ Selling the software✔ Distributing the software freely✔ Provide both commercial and free software versions
( functionally equal )✔ Provide both commercial and free software versions
( basic and enterprise edition ) OS business models @ Better Software 2010, Florence
VS1: from our POV
So, image you as a startup, imagine you estimated equal revenues from both models, which one will you choose?
I bet the one which gives you more freedom.
OS business models @ Better Software 2010, Florence
VS1: customer's POV
Imagine you as enduser, you have to choose between a trial version of software A and a community edition of software B.
We (probably) don't need to discuss.
OS business models @ Better Software 2010, Florence
VS1: other company's POV
Imagine you as another company which needs a software which does what your software do.
If you're a CS vendor running against an OS vendor that company has to choose among:✔ Your software, that always needs your support✔ Their software, that might need other's vendor
support
Is closed source software as rewarding as you thought?
OS business models @ Better Software 2010, Florence
VS2: we sell software support
CS company can sell support:✔ To the enduser✔ To their resellers
OS company can sell support:✔ To the enduser✔ To their resellers✔ To other companies
Other companies can be resellers and developers:closed source software forces youto consider other companies only as resellers.
OS business models @ Better Software 2010, Florence
VS3: we boost the software
Software NEEDS upgrades Customers NEED enhancements
Let's start with a concept:
6 months of inactivity and your software is OLD.
Who's responsible for the delivery of all this stuff?
OS business models @ Better Software 2010, Florence
VS3: boost the software CS software:
✔ YOU OSS:
✔ You and your customers
CS clients can provide feedbacks and tests. Passive stuff.
OS is the only place where the customer is active(this reminds me the agile way, doesn't it?) and
interested in testing, reporting, providing patches, features and so on.
OS business models @ Better Software 2010, Florence
VS3, a disclaimer...
”HELL YEAH!,
I developed kicksass OSS and now I'm gonna make money with the effort of my community.”
This doesn't happen all the time.
But with OS can happen, with CS not.
When you know you won't have any possibility,that is not FREEDOM.
OS business models @ Better Software 2010, Florence
VS4: we care a lot!
CS software training:✔ Using the software✔ Mastering the software
OSS trainings:✔ Using the software✔ Mastering the software✔ Extending the software
OS business models @ Better Software 2010, Florence
Who's doing it right? Let's analyze:
✔ Canonical✔ Varien✔ Red Hat✔ Mozilla foundation
...leaving Alfresco, Atlassian, Sun and many others for your case studies...
OS business models @ Better Software 2010, Florence
Canonical
Provides both desktop and server
Ubuntu Edubunutu Kubuntu
editions while selling commercial contracts ( for technical support ).
OS business models @ Better Software 2010, Florence
Varien
Provides free kickass ecommerceplatform Magento CE
Sells superkickass ecommerce platform Magento Enterprise Edition✔ Basically sells features for an already good software
Recently ( 15 March 2010 ) received a $22.5 million capital injection
OS business models @ Better Software 2010, Florence
Red Hat Provides Fedora for free while selling RHEL
Althought I firstly admit Red Hat isn't the proper company to show you, we have to admit that since 1993 years RH is selling good software, keeping together a solid community helping other entities in fundraising ( CC ) instead of
being the fundraiser.
Red Hat is solid. That's the point.OS companies can be solid companies.
OS business models @ Better Software 2010, Florence
Mozilla foundation Not properly a company as we intend it,
Mozilla's incomes are basically composed by:✔ Fundraising
✔ General donations✔ Partnerships
Partnerships?Offers software integration: for example, Google as the default search engine of FireFox.
Succesfull vertical integration.
Myths: we have no rights!
Huuuuuuuge myth about OSS is that you're not protected by licenses.
Commonwidelyused OS licenses like✔ GPL✔ LGPL
are strict, when we need it.✔ If you reuse GPL code, you must release GPL
and give credits✔ If you reuse LGPL code, you must give credits
OS business models @ Better Software 2010, Florence
Still dubious?Ask Robert Jacobsen ( a single developer ) if the
100k from Matthew Katzer ( Kamind Associates ), in the next 18 months, will be a valid reason to continue developing and releasing GPL...
Time's are changing: those who believe that OS is something rewardless that can freely ( free as in freedom and free as free beer ) help their commercial products risk to loose the train to the next level.
OS is now a business, keep it in mind.OS business models @ Better Software 2010, Florence
Hints
Maybe lots of you already know it, but I recommend you to read the guidelines of the hacking business model.
OS business models @ Better Software 2010, Florence
At the end...
FLAME TIME!P.S. : Feel free to contact me for discussing how much does OSS kicksass :)
alessandro dot nadalin AT thegooglemailprovider dot com
OS business models @ Better Software 2010, Florence