Comments on: Is Open Source as a Model for Business Really That Elusive?

By: Peter Armenti

Peter Armenti — Wed, 31 Mar 2010 16:45:26 +0000

When I look for a web script to use in a project.. I always try to find an open source project.. and it’s NOT because I’m cheap It’s because I know that there is going to be a large community to turn to for help, advice, AND that there are a lot of people relying on keeping the project alive.. that’s probably most important to me. There is nothing worse than building and idea based around software, or a script, that dies.

-Peter Armenti

By: Peter Yared

Peter Yared — Tue, 22 Dec 2009 17:50:54 +0000

Right on… I see Matt Asay is not puking all over you for saying this, so perhaps people are starting to come to terms with where commercial open source has landed. Peter

By: Tim Boudreau

Tim Boudreau — Sun, 06 Dec 2009 11:51:01 +0000

It seems to me that those claiming there is no business model for open source are stuck in the notion of selling software per-se. If you look beyond that, well…got a TiVO? 90% of the software on it is Linux. Got a Macintosh? Probably 80% of the OS is OpenBSD. And so forth.

The economic model of selling support on open source software is one where probably only one vendor-per-product can be profitable – the total pool of customers who will actually need such a service is small but tends to be large organizations who require it for whatever they do.

By: Links 03/12/2009: New Linux, X Server 1.7.3 Released | Boycott Novell

Links 03/12/2009: New Linux, X Server 1.7.3 Released | Boycott Novell — Thu, 03 Dec 2009 23:46:54 +0000

[...] Is Open Source as a Model for Business Really That Elusive? Data is the next great revenue frontier, in my view. And I’ve long argued that open source is intrinsically differentiated in its ability to generate data, given its distribution and adoption advantages. Some will undoubtedly argue that privacy concerns will prohibit this practice: I am not one of those people. First because open source projects are already collecting data (Debian, Eclipse, NetBeans, Ubuntu, etc), but more because the data has value – potentially immense value – to users. [...]

By: Daily Links for Tuesday, December 1, 2009 | Blog | Bob Sutor

Daily Links for Tuesday, December 1, 2009 | Blog | Bob Sutor — Tue, 01 Dec 2009 15:00:47 +0000

[...] Is Open Source as a Model for Business Really That Elusive? Redmonk / Steve O’Grady Where you come down on the open source and business question, then, may simply depend on what you consider an open source business. At least until open source vendors begin aggressively realizing their next, largely untapped revenue source: data. Once that happens, we’ll all have to reexamine the economics of open source models. [...]

By: Juergen Geck

Juergen Geck — Tue, 01 Dec 2009 14:55:18 +0000

moving up the iso/osi stack was the old way of evolution in the it industry. open source made the API lock-in play attackable on so many layers. and now SaaS type offerings are making much of the above irrelevant. because it all happens behind the firewalls of your service provider, and does not concern you anymore as a user.
now all those service providers need to integrate their services, and enable their customers to enable them. XML is to versatile to be useful for this, so we went for microformats.org. and we apply open source experience and approach to an integration play – based on pure data.
good to have you convinced stephen!

By: Arjen Lentz

Arjen Lentz — Tue, 01 Dec 2009 12:49:37 +0000

Catching a tiny chunk of the huge # of downloads/users of MySQL is pretty lucrative anyway.
MySQL’s choice (or mistake, depends on perspective) has been to cream the market by going for the biggest deals. This left the vast majority of the userbase unserviced.
I see no reason to view a billion as a magic target to either reach or to measure success, but either way there’s multiple ways to be very profitable and growing. The common approach is to aim for the “highest value customer”, but that has quite a few nasty side-effects. Other upcoming companies might wish to reconsider, and do better as a result.

By: Damon Edwards

Damon Edwards — Mon, 30 Nov 2009 23:12:48 +0000

My company produces open source tools but I find it frustrating when we are labeled an “open source vendor”. It implies that there is some sort of business model where we are “selling” the thing which we are also giving away.

Open source is a marketing and community building strategy. It’s value is it’s ability to attract and hold the attention of a user community. The value is in the size and strength of the community, not the software itself.

It’s up to the community’s stewards (i.e. the “vendor”) to figure out how to monetize that attention. Simply applying the old fashioned license plus support business model doesn’t cut it in most situations and is why there are so few large scale “open source vendor” success stories. Trying to fit the new open source world into a legacy enterprise software way of thinking is a dead end.

The data angle is an interesting one. Not sure how that will manifest itself… but it’s an example of thinking in the right direction.

By: Niraj

Niraj — Mon, 30 Nov 2009 21:49:24 +0000

Open source is ultimately a business strategy – specifically a sourcing strategy. consider offshoring, with India coming onto the global scene , New Companies were created (INFY, WIPRO etc) that challenged the cost model for incumbents(Accenture etc). but this does not change core business model. The business model is still outsourcing and consulting – rather than offshore development as the business model.

A strategy should not be confused with a business model. A strategy will take you for say a billion and then you need do something else , while the model lasts significantly more than a strategy.

In the case of offshoring – The strategy of offshoring is now adopted by Accenture and likes and the offshore players are moving to a more onsite model with client presense.