
Open Source Business Models, Revisited | Kellblog - mblakele
http://kellblog.com/2011/06/19/open-source-business-models-revisited/
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runT1ME
In the words of Marc Fleury, Open Source is not a business model, it's a
_distribution model_. Rather than spending time and resources convincing
companies to download and try your product, you instead have to spend time and
resources convincing companies to actually _pay_ for your product.

If you don't add a lot of value and it's not something business rely on, then
it's a tough business model (vlc, etc.). However, when you're software is used
by companies who value their time _more_ than money (I'm channeling Jonathan
Schwartz here), you are in good shape.

I've worked with numerous companies that were all happy to pay the Redhat,
MySql, and Jboss licensing fees once the product was up and running and
profitable. Suddenly a few thousand dollars a server seems kind of
inconsequential if it means at any moment you can have developers on the phone
getting your app back up.

The argument of the Open Source paradox could just as easily be applied to
SAAS in general. As software and hardware becomes easier to set up, run, and
administer all while being more reliable, than surely people will move away
from SAAS? Of course not. Just because a company _can_ , doesn't mean they
want to stray from their core competency to save a few bucks. Same goes for
buying support contracts from Open Source companies.

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prasunsen
One more model: SAAS. You can have open source product that is free to
download and use but offer hosted version, paid, for those who prefer someone
else to have the hassle of installation and configuration. Of course you don't
need to be the creator of the open source software to do this.

