
It’s open-source software that’s eating the world - yarapavan
http://venturebeat.com/2015/12/06/its-actually-open-source-software-thats-eating-the-world/
======
notacoward
(1) They say that 78% of the companies surveyed use OSS internally. I'll bet
it's more like 78% realize or admit it. It would probably be very hard to run
a business nowadays without using at least some OSS somewhere.

(2) The author's recommended approach of combining some OSS with proprietary
enhancements (commonly called "open core") is certainly not the only way to
make money from OSS, and I don't think there's even much evidence that it's a
particularly effective approach. _Some_ customers are "more than happy" to pay
for an "enterprise grade" version. Others aren't, and that number goes up as
the price for the proprietary version increases. They'll go it alone, hire
consultants, or switch to competitors.

A recurring-revenue "subscription" model works surprisingly well. (This is
where I should add a disclaimer that I work at Red Hat.) Customers will pay a
modest amount, year after year, to get easy/timely updates, priority bug
fixes, training, certification, indemnification, access to developers, and so
on. People will be "more than happy" to pay for a safety net that they never
actually use, and it's easier to keep TCO lower than competitors with this
model than with the open core "freemium" model. Less immediate revenue per
customer, but more customers and more loyalty. I guess "don't be greedy" is
the lesson here. ;)

------
akras14
What are examples of successful(profitable) open source companies?

~~~
jacquesm
Canonical, MySQL (now Oracle), Zimbra (now VMware), Zend, Gluster (also
acquired, I forgot by who) and a whole bunch of others are or were at some
point open source companies.

Pure open source software companies are relatively few in number but companies
that contribute to open source and profit from that open source in that they
have a lot more people working on the code and taking care of bug spotting and
bug fixing is considerable.

One nice example of that is Basecamp.

Open source companies that are successful are acquired at a relatively high
rate so they don't usually last as such independently.

~~~
seiji
_Open source companies that are successful are acquired_

Acquisitions aren't success though. It's just "failing upwards" for the
founders. Successful companies are self sustaining.

~~~
jacquesm
That depends on the goals of the founders.

~~~
scott_karana
Doesn't it just make the _founders and investors_ successful, but not the
company? Just look at Carousel and Mailbox today... ;)

~~~
jacquesm
It can go either way. But an acquisition _can_ be a success. For instance
Android.

~~~
seiji
It isn't about _product_ success, it's about _company_ success. Even for one-
trick-monkey companies like Android (see how their prior sale to Microsoft
went... smashing success)—selling a company is the literal death of the
company and the _absence_ of success outside of private financial engineering.

~~~
jacquesm
I think you're stuck in a groove of your own making. Selling a company is not
a 'literal death' because a company never was 'literally alive'. It is merely
a convenient fiction that allows multiple people to work together and to
somewhat fairly share the proceeds. Survival of a company is never an inherent
goal. Survival of a product _can_ be such a goal.

Companies are utterly un-important, they are simply vehicles.

~~~
seiji
It's difficult to buy stock in a product. It's difficult to make an index fund
of products. It's difficult to retire on "product dividends."

Companies exist as an attempt to get all the money in the world, and most fail
that goal. Apple is pretty close. Refusal to acknowledge failure as _failure_
is pathological insanity. Getting paid to fail (or to "soft land" and save
face on an outright failure) doesn't mean the fail didn't happen.

~~~
jacquesm
> It's difficult to make an index fund of products.

Well, that's what I said, companies are _vehicles_.

> It's difficult to retire on "product dividends.

But you can retire on corporate dividends. And when a companies shares are
acquired you either get money _or_ shares in the acquiring company.

> Companies exist as an attempt to get all the money in the world

How do you square that with 'it is hard to retire on product dividends'?
Companies pay out dividends to their shareholders.

Companies clearly do not exist to 'get all the money in the world' because
then the economy would grind to a halt.

> and most fail that goal.

All companies fail that goal. They fail every time they buy new resources, pay
out salaries, rent offices, pay out dividends and so on.

In fact, the _worst_ thing for a company is to have a whole pile of cash and
nothing to do with it, that's money that is not currently working for the
company in a meaningful way. That's why companies tend to manage their liquid
reserves very carefully.

> Apple is pretty close.

Close to getting all the money in the world? No, not even remotely close. And
even all that money that Apple has is indirectly owned by the _shareholders_
of Apple. Either Apple will have to spend it or they will have to pay out.
Having it sit there does them no good.

> Refusal to acknowledge failure as failure is pathological insanity.

Are you calling me insane in a roundabout way?

> Getting paid to fail (or to "soft land" and save face on an outright
> failure) doesn't mean the fail didn't happen.

Oh, that happens. But it's pretty rare. But better than chapter 11 if that's
the alternative.

~~~
seiji
_Are you calling me insane in a roundabout way?_

It takes one to know one.

 _But it 's pretty rare._

Pretty rare? That's back to the beginning, because every acquisition means the
bought company has explicitly failed to become "real" in a make-more-than-we-
spend (and continually grow the "make more") sense.

 _But better than chapter 11 if that 's the alternative._

I'd rather see 20-somethings lose everything and learn tough, introspective,
life changing lessons, than see them running around with their "soft landing"
$10 million paydays just because they had the right connections.

~~~
jacquesm
> It takes one to know one.

I think we're done here.

