

Is Open Source really Sustainable? - artagnon
http://artagnon.com/2010/01/what-drives-open-source/

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tptacek
You open source the parts of your product that people won't pay money for. You
keep proprietary the parts that people will pay money for. The open source
portion promotes your product and fills the top of your sales funnel, and
simplifies your marketing: you have a clear set of conversion steps and a very
easy to way to fill the top of the funnel (nothing sells like "free").

Nobody wants to pay for ffmpeg. But clearly they do want to pay for slick UIs
on top of ffmpeg, because ffmpeg is constantly having to threaten to sue
people for violating their license.

Value-adds that people will pay for that scale like products scale:

* User interface

* Seamless integration

* Hosting

* Device support

* Content

* Extra features

Finally, it is always worth mentioning that (a) early-adopter home users are
generally not willing to pay for _anything_ but the top 1% of software titles,
(b) mainstream home users will pay, if they're going to pay, whether it's open
source or not, and (c) starting at around 500 employees, businesses will
_always_ pay for software, to the point of shunning software they can't pay
for: the P.O. process is an integral part of IT planning for corporations.

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artagnon
Yes. This is one of the main ways to make money. Another way is being purely
service-based like RedHat.

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tptacek
Red Hat also starts out in some of the toughest software segments: operating
systems and J2EE stacks. That's a side effect of when they were founded and
the scale they are now forced to operate at.

There are plenty of software businesses that make money on services that are
easier to sell and operate than entire operating systems (for which "service"
is a fuzzy concept anyways). For instance: lots of security products require
monitoring; in fact, lots of security products deliberately require lots of
hands-on monitoring, because that drives services dollars.

Restating, point being, Red Hat may not be a particularly great example.

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artagnon
Agreed. RedHat doesn't make that much money either. I picked it because it’s
been around for some time, it’s popular, and because its business model is
well-documented.

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fnid
_There’s always some ratio of developers working for monetary benefit to those
working their way up._

Additionally, the corporates can depress wages by pointing to plenty of
inexpensive competition in the "working their way up" group. Not only are they
getting lots of work for free, but their production costs are reduced as well.

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adharmad
Open source is just another market force in the software business. If the
price of commercial software is too high, open source keeps it honest and is a
balancing force.

Ultimately, a world with purely open software is un-sustainable, just as one
with purely commercial software is.

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Sanguinez
As a user I could as well contract a company to adapt, develop or/and support
a free software to my needs. As an example there are all these companies
providing services for nagios. Companies could as well share the cost of a
developer to build a software they need.

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electromagnetic
Open Source is simply a modern 'try before you buy' for a majority of
products. You cant sell me a sofa without letting me sit in it, you can't sell
me a TV without me seeing it running. The assumption that people will buy
before they try is almost exclusive to food products, which manage the
majority of new customers by referral (or through marketing sugar-laced
anything's to children).

Assuming people will buy a software product before they try it is absurd, even
Microsoft gives 60-day trials of Office with all new computers. Open Source is
no different than traditional ways to sell products. Open Source is simply a
more genuine form of shareware, trial-ware and nag-ware.

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elviejo
There is nothing in open source that makes it a "try before you buy". In
theory a company can sell a product, this product being open source. So with
it I should also get the freedom to use it, share it, or modify it.

Plus there is the open source development model that gives other benefits.

