
Ask HN: Is it foolish to open source your SAAS business source code? - hoodoof
Say you come up with some great productivity application. It&#x27;s web based, has a back end and a JavaScript front end for browsers and mobile.<p>You put it on github under an MIT or BSD or similar license. So corporations or anyone else can download and install your software and use it at no cost.<p>On your main website, you offer the software but on a per-user fully hosted, running online basis. So your revenue will come from people signing up to use your fully hosted service where they don&#x27;t need to make any effort to install or configure - it just works. You also make money offering support contracts to people who have downloaded and installed their own copies of the software.<p>The reason you have open sourced it is to spread the word, gather interest and build community around your product. The theory being that the vast number of free users will be the impetus that leads to a small number of paying people discovering and using your product. Maybe free and open source is more newsworthy, more likely to get press and blog coverage?<p>Theoretically anyone could take your code and set up in competition to you. Anyone could fork your code and rename it to something else.<p>So is open sourcing your SAAS application a good way to do business, or is it foolish and giving away the farm?<p>Is there any examples out there of companies that have actually made money taking this approach?<p>I&#x27;m scared that if I fully open source then I will somehow have given the value away.
======
patio11
Sidekiq ([http://sidekiq.org/](http://sidekiq.org/)), a Rails job queueing
system, works on related model: open core, paid subscription if you want to
host a version with all the commercial bells-and-whistles plus get support.
The author does well for himself, deservedly.

I'd consider shipping a bare bones version of the back-end under MIT, letting
people spend their own two weeks getting one ready if they want to have it
more useful in production, _or_ give them the option of paying $500 per year
for your back-end. That's an easy, easy call for a lot of companies to make.

Just to set expectations: just OSSing your thing is not going to cause the
world to beat a path to your door. You're going to have to go bang down doors
to get this adopted, whether it is 100% free, 100% paid, or some combination
of the two. Unless you put in the marketing and "sales" work, you will
probably build no community, receive no buzz, acquire no press mentions, and
get no meaningful support from other developers. Be ready for this, because
three months from throwing most projects on Github you can expect a deafening
cacophony of _absolutely nothing at all_ unless you find the people it solves
a problem for and, with the best of intentions, shove it down their throats.

------
Eduard
I'm as well currently thinking about open-sourcing components of my web
application. "Open sourcing" comes in many flavors, and the one I'm mostly
favoring right now (for one of my particular components) is a dual license,
"GNU AGPLv3 / commercial" combination.

[https://en.wikipedia.org/wiki/Affero_General_Public_License](https://en.wikipedia.org/wiki/Affero_General_Public_License)

Metafizzy's Isotope goes a very similar dual-licensing way:
[http://isotope.metafizzy.co/license.html](http://isotope.metafizzy.co/license.html)

Isotope's author has written about how commercial support has worked for him
in his particular context, search for "support" on his blog archive:
[http://metafizzy.co/blog/archive.html](http://metafizzy.co/blog/archive.html)

While an MIT and BSD license is (among other things) good for monetizing on
consultancy (... not easy for a one-person project), a GPL-including multi-
license may additionally allow to monetize on third party modifications of a
software component (... that's way easier for a one-person project).

If someone sees a fallacy or gotcha in my monetization reasoning, please
comment.

~~~
davidroetzel
One problem with dual-licensing though is that open source contribution
becomes unnecessarily hard. Every contributor will have to sign a Contributor
License Agreement, that at the very least allows you to dual-license their
code. Many CLAs even have the contributor sign over her copyright to you.

Not everyone will be happy to sign something like that. And integrating a pull
request on github suddenly becomes a tedious excercise in international
copyright law :)

So dual-licensing gives you all the publicity-related and try-before-you-buy
advantages of open source. But you will probably miss out on other great
aspects, especially community-wise.

~~~
logn
It's prudent to have a CLA anyhow. Even if a whole project were AGPL, an
employer of some contributor could claim ownership and IP theft.

And the right to fork a project also means the right to put conditions on
accepting contributions.

And there are more advantages than publicity and free demo, namely that users
have freedom to run the app themselves, find another service provider, find
another project maintainer, etc. I'd see it as a far less risky situation than
anything proprietary. Compared to Apache/BSD/MIT it's less risky in the sense
that people aren't going to be introducing proprietary forks.

------
julienmarie
I've been asking myself the same question.

The conclusion I'm leaning towards is that the Saas version should, on top of
the hosting/maintenance, offer some distinctive features ( it depends of your
product, but on an Saas model, your architecture can be more complex than a
Backend/Frontend/DB architecture, thus allowing more advanced features ).

In my view there is three layers, that could be seen as three steps ( but
maybe I'm wrong ) : open source ( great for WOM if well managed, great to
harden the software ), enterprise-behind-the-firewall license to make
recurring revenue and build a sales pipeline, Saas once the architecture is
stable enough to handle hundreds/thousands of customers with acceptable costs
of operations.

Someone can take your code and set up in competition to you using the OSS
version, just changing the logo. But the software is at the end only 30% of a
company. What makes a great company is how it evolves with its market to serve
and nurture better its customers. Economy is not about selling products, it's
about exchange between humans. The real product is in the experience ( the
software, the tone, the customer service, the email, the documentation, the
ads... every little byte, pixel, sound that your company emits ). A company
that steals your OSS and monetize on it without making it a new experience is
just like a guy around the corner selling Rolex replicas.

~~~
themartorana
And let's be clear - you can open source license it however you want. So you
can, in fact, allow corporations to run their own installs while still
disallowing those companies from reselling the software.

~~~
rmc
_disallowing those companies from reselling the software._

No licence that is recognised as open source/free software by the Open Source
Initiative, the Free Software Foundation, or the Debian Project, etc would
allow that restriction.

You would have to write your own licence for that, and you may call it "open
source" if you like, but that would be misleading and you'd almost certainly
get called out for it.

~~~
themartorana
Anyone that wants to "call you out" for making source code available, for
free, to what was a closed-source application is petty at best.

I get the pedantic nature of calling it "open source," but the idea that OP
has to not only make the source available, but also allow others to resell it
in order to be a good citizen in the OS community is disappointing to me.

Your point is well taken, I just find it unfortunate that people think this
way.

~~~
rakoo
There is a _huge_ difference between an "open source" code and an "available"
code. The whole point of open source is that you can reuse, modify and
redistribute the modification on the code, so that the community's knowledge
in the domain can be globally increased. It's all about improving the way we
work as a community.

Now, of course, I am free to _not_ want anyone to reuse my code, even if it's
publically available. That is just not Open Source.

To be clear on the "calling you out", it's not about calling you out because
you made your code available only instead of full OSS, it's about calling you
out because you made your code available only _and_ you pretended it's OSS.
That is just a lie and calling you out on this is perfectly justifiable.

------
beck5
We did exactly this with ShareLaTeX.com
([https://github.com/sharelatex](https://github.com/sharelatex)) we are a
bootstrapped SASS business that started a couple of years ago and now supports
3 people full time.

We have open sourced 95% of our code, which gives people a really great
product they can install on their own servers. Along with our hosted version,
we have a premium self hosted version with a few things that only the big
users would want. I would not personally want to build my business around
support/contracts as it is really pretty close to being a contractor.

We were already an established company before we open sourced so I can not
speak for how many users it got us. I don't think its foolish todo but at the
same time it is not going to make your business.

Be aware open sourcing will add extra burden to everything you do. But
starting open source is going to be easier than doing it retrospectively.

discourse.org started life open source and they are doing very well but have
some big hitters and finance.

~~~
hoodoof
I'm interested to hear more of the story.

How long did it take to start making money?

Do many people download and install?

Have you ever felt concerned you'd be forked by competition?

Where does the income come from primarily?

~~~
beck5
We didn't start charging until we had been live for about 10 months, this is
where it went from a cool side project to realising that we had something
here. Once we started charging we were making a tiny amount of money straight
away because we already had a lot of users.

A lot of people do run their own versions, these are generally universities
who do not want their data going to 3rd parties. Its impossible for us to get
exact numbers on it though.

We were worried about other people stealing our code, some other people do run
our site however your self hosted version is always going to be best, it will
have all the SEO, more users, get the updates quickest.

Most of our income is via self hosted.

~~~
hoodoof
Do you have any qualms about having the name of the open source project in
your company name?

How did the LaTeX project owner feel about the project name being in your
company name? Did it ever come up?

------
js2
Sentry is both SAAS[1] and open source[2], but has an interesting history.

It was originally started as an internal tool at Disqus[3]. Its developers
were able to open-source it, and spin it off into a side business. The
developers then moved on from Disqus to other companies but kept getsentry.com
running till it was profitable enough them to go full-time on it.

I'm using the open-source version as part of a solution at $dayjob. So how
does this benefit getsentry.com? Well first of all, I'm talking about it here.
They could also potentially sell my employer a professional services contract
if I needed some level of customization that I can't do myself. Finally, I've
contributed bug fixes and code changes which benefit my use cases, but also
make it a better product for other sentry users.

So, win/win.

As an aside, the sentry developers are great to work with. Very responsive to
issues on github and they seem to be available on the sentry IRC channel
almost all the time.

[1] [http://getsentry.com/](http://getsentry.com/)

[2] [https://github.com/getsentry/sentry](https://github.com/getsentry/sentry)

[3] [http://blog.getsentry.com/2013/07/17/sentry-at-
disqus.html](http://blog.getsentry.com/2013/07/17/sentry-at-disqus.html) and
[http://stackshare.io/posts/founder-stories-how-sentry-
built-...](http://stackshare.io/posts/founder-stories-how-sentry-built-their-
open-source-service/)

~~~
jbrooksuk
Thanks! I've just updated my applications license to match Sentry's since it
seems to cover everything you'd need being in the same situation?

------
Mahn
> Is there any examples out there of companies that have actually made money
> taking this approach?

There are many, whether it fits depends a lot on the product but this open
source first, business second approach is definitely not new. See for example
MongoDB, WordPress, Vanilla Forums or Discourse.

Or here: [http://en.wikipedia.org/wiki/List_of_commercial_open-
source_...](http://en.wikipedia.org/wiki/List_of_commercial_open-
source_applications_and_services)

And see also:
[http://en.wikipedia.org/wiki/OpenSaaS](http://en.wikipedia.org/wiki/OpenSaaS)

~~~
hoodoof
+1 for the Wikipedia link.

Mongodb uses the Affero GPL license which is distasteful to many and my
concern is using Affero would not REALLY be going open source but would be a
way of trying to protect my business/my source code from being hijacked and
renamed. Thoughts?

~~~
palmer_eldritch
How is using AGPL not really open source? Or do you mean it in the "open
source" vs "free software" sense? Even then I don't see how it doesn't fit in
the OSI definition...

The AGPL is an open source license: you give people access to your source code
and they're free to modify it and redistribute it as long as the code stays
under the same license.

The main (only?) difference with GPL is that providing a service based on AGPL
code is considered the same as redistributing the software so you can't make
proprietary changes to the code and say "but I'm not redistributing the code,
I'm only running it on my own hardware so I don't have to make the source code
available" as you can with GPL code. I believe the OSL3 allows protection from
that too btw.

Businesses are still free to take your code and provide a service based on it,
they just have to contribute back if they make changes which seems only
natural.

Just like the GPL, it's there to ensure that the code stays free. It's only
plugging a loophole which makes the GPL less relevant in the age of services.

------
nmarcetic
Your developing process with opensource model will be much faster, you will
always be few steps ahead with your community. Theoretically yes, but those
people who will fork and "steal" your project are not your clients you are not
targeting such audience, they will never pay for your product (hosted service,
support etc...). If they are capable to fork you project, improve and change
you code, develop the product faster then you, become your competition, you
should hire them :). This is a signal you are failing, something is wrong in
your organization/team and you should quit.

Ask your self,Do i ever heard for such story ?

------
alexggordon
Open-sourcing your code is a big step, and in doing so, you're essentially
gambling on the fact that the services you provide are what's worth money, not
the platform you do it on and even if someone else had your tools, you could
still do what you do better.

Additionally, I think it depends on how likely your clients are to use that
code, IE the model of your business. For example, if you have a time tracking
software, a good portion of your clients are probably not strong technology
companies. In this case, open-sourcing it, while continuing to develop it,
could create an excellent open-source project that is maintained through
paying subscribers.

A few examples:

OpenStack[0], is a huge open source[1] cloud operating system. Rackspace runs
on them. They've fostered a huge community, all through original backing by
Nasa and Rackspace[2]. Essentially, OpenStack is now used by Rackspace to fund
their for-profit business, while OpenStack is being actively developed by
thousands of people.

Sidekiq[3] is an background job processor, that sells a pro[4] version on top
of the open source library. This pro version provides additional user
functionality at a cost, allowing funding for future development of the open
source library.

Essentially, both these platforms use open source to sustain for-profit
businesses, and both had a long term plan for _why_ they wanted to open source
a big part of their business. While I think a lot of planning needs to go into
open sourcing it, it's definitely sustainable and doable.

[0] [https://www.openstack.org/](https://www.openstack.org/) [1]
[https://wiki.openstack.org/wiki/Getting_The_Code](https://wiki.openstack.org/wiki/Getting_The_Code)
[2]
[http://en.wikipedia.org/wiki/OpenStack#History](http://en.wikipedia.org/wiki/OpenStack#History)
[3] [http://sidekiq.org/](http://sidekiq.org/) [4]
[http://sidekiq.org/pro/](http://sidekiq.org/pro/)

------
caw
It depends on the business. That model definitely works, and another variant
on the model where paid solution users get additional enterprisey features
also works (single sign on, Active Directory integration, etc). Take for
example Chef, which has a paid version and an open source version. Paid Chef
comes in 2 flavors, hosted and on-prem. There's also Nagios and several other
IT monitoring solutions.

You may want to double check on which license is best to use in this scenario,
but it definitely is possible to grow a business using it.

~~~
bhouston
Does Chef make money though?

------
sytse
GitLab B.V. CEO here, our business model is to charge the largest
organizations that run GitLab on their servers. Our SaaS GitLab.com is free to
use for almost all (there is a plan if you want personal support). More than
100,000 organizations use the open source version for free. But our paid
offering that offers features that are most useful for organizations with more
than 100 people is where we generate revenues. Don't underestimate the needs
of larger organizations to run software on their own servers.

------
williamstein
In December, I open sourced SageMathCloud
([https://cloud.sagemath.com](https://cloud.sagemath.com)), after it had been
closed source for years. SageMathCloud (SMC) is a "SaaS product" in which you
collaboratively edit IPython notebooks, LaTeX documents, Sage worksheets, R
code, etc., in a browser. It is not yet a business, though it may become a
business soon. Here's what happened with open sourcing.

It was politically contentious for SMC to be closed source, due the connection
with the Sage open source math software project (see [1] for a big thread
attacking SMC for being closed, and [2] for a rebuttal). SMC was closed source
for years, primarily because my university commercialization office wouldn't
work with me unless SMC was closed source.

In December 2014, I discovered that SMC had received some development support
from NSF grants that had explicit requirements that all code written under
those grants be released under the GPL (very few NSF programs have open source
requirements, but the SI2 NSF program recently added them [3]). As soon as I
realized this, I complied with the conditions of those grants and open sourced
everything. This has had no real impact on SMC development. This didn't
surprise me -- many of the other responses in this thread express the same
expectation. I wasn't surprised because I started the Sage math software
project back in 2005, and grew it from 0 to hundreds of developers (over many
years), so my expectations for what it would take to get useful contributions
to SMC were realistic -- massive, insanely hard work over many years, many
workshops, writing lots of documentation, recruiting developers, arguing for
why my project is better to contribute to than the many competitors, etc.
Building an open source project is like building a company -- you have to
recruit and train every new "hire" (contributor), build up process, sell a
vision, etc.

My situation is unusual, since I am balancing simultaneously being both a
(tenured) mathematics professor at a university and founding a company.
Technically the university can assert ownership over anything I write using
university resources (see [4]). However, due to the viral nature of the GPL,
it doesn't matter who owns what I write, since I (and everybody) can still use
it. I didn't want to use the GPL for SageMathCloud (I much prefer the BSD
license), but technically I have no choice.

[1] [https://groups.google.com/forum/#!topic/sage-
devel/ojLOJaxIh...](https://groups.google.com/forum/#!topic/sage-
devel/ojLOJaxIhgA) [2] [http://sagemath.blogspot.com/2014/08/what-is-
sagemathcloud-l...](http://sagemath.blogspot.com/2014/08/what-is-
sagemathcloud-lets-clear-some.html) [3]
[http://www.nsf.gov/pubs/2014/nsf14520/nsf14520.htm](http://www.nsf.gov/pubs/2014/nsf14520/nsf14520.htm)
[4]
[http://www.washington.edu/admin/rules/policies/PO/EO36.html](http://www.washington.edu/admin/rules/policies/PO/EO36.html)

------
swirlycheetah
Ghost is probably a good example to investigate.

Their software is open sourced and easy for anyone with a server and some
technical knowledge to get up and running. They offer a paid for hosted
product which is reasonably priced and offers automated updates.

Here's[0] a report on their progress in 2014, as you can see their model is
working very well for their product.

[0] [http://blog.ghost.org/2014-report/](http://blog.ghost.org/2014-report/)

~~~
avinassh
btw Ghost is a not for profit organisation. Does that make any difference?

------
simonswords82
Like the other responder caw I think it depends on your business, and it also
depends on your target audience.

Open sourcing the wordpress blog platform? Sure that makes sense, the target
audience for wordpress are largely technical (to a greater or lesser degree),
and want to see what they're putting on their servers. More importantly they
want to customise it without limitation.

Open sourcing a productivity application? Hmm, not quite so clear cut. If the
majority of your users are technical that's good. But are your users going to
want to fiddle with it to the extent that they want it open sourced? I'm
really not confident that they will unless you know something about them that
I don't? In other words, what is the benefit to your customers in your app
being open source?

To answer your other questions...I don't think that you'll get more press
coverage about your project just because it's open source. Open source isn't a
new thing.

My personal view is that I would launch your app paid for using one of the
standard pricing models. See if you can gain traction on the benefits of the
app alone, rather than trying to put an open source twist on it at the outset.

------
icebraining
(Disclaimer: I work for one of partner companies)

Odoo[1] (an all-in-one platform for companies) has been having plenty of
success using the open source model. There's a community of partner companies
which contributes bug reports, fixes and modules, and builds upon the base
platform, and then when selling those solutions to other companies, those
contracts often include an yearly support fee for Odoo (the company) itself.

Regardless of the technical merits of the platform (I think it's actually
pretty decent, but some disagree), the business model has been working. Some
of the clients using it for core business functions include companies with
revenues in the hundreds of millions, as well as official organisms.

Odoo (the company) has also recently raised $10M from European VCs.

[1] [https://www.odoo.com/](https://www.odoo.com/)

------
JonoBB
There are plenty of businesses running on this model. Wordpress is probably
the biggest.

------
davidroetzel
I always wanted to try and test this approach, as I am convinced that a lot
(most?) of the value in SaaS is in hosting. Operating your own servers is a
huge hassle, and many people will gladly pay someone to do it for them.

Also if you open source your code and offer customers a full export of their
data you have two advantages over closed source SaaS: Customers do not need to
worry about vendor lock-in. And they can depend on being able to continue
using your software even in case you ever go out of business.

------
sredfern2
For the Open Bank Project (
[http://www.openbankproject.com](http://www.openbankproject.com) and
[https://github.com/OpenBankProject/](https://github.com/OpenBankProject/) )
we use AGPL + commercial + Harmony CLA. We have tech partners but so far we've
done most of the master development ourselves. Time will tell if this is a
good approach! :-)

------
ig1
I wrote a piece on open source business models that you might find useful:

[http://blog.imranghory.org/open-source-business-
models](http://blog.imranghory.org/open-source-business-models)

The big risk with your suggested approach is that you have no defensibility as
there's nothing stopping someone else offering a hosted version of your
software. Because of this it's hard to maintain the high-margins typically
required to grow a software businesses.

Open sourcing your product also isn't going to magically make it more popular;
unless there's strong reasons why a customer would prefer an open source
version (i.e. if you're making infrastructure software which you're asking
your customers to bet their business on) it's unlikely to have a significantly
greater marketing impact than other freemium strategies.

It sounds like what you really need is a go-to-market strategy. Most SaaS is
sold through traditional online marketing (ads, seo, whitepapers, etc.) and
sales and those are probably the main options you should be evaluating.

------
rakoo
Are you selling _Service_ as a Service or _Software_ as a Service ?

If you're selling _Service_ , you're selling the infrastucture, the ease of
use, the support, the knowledge in the domain, and the scale you have as being
the original player gives you insight into the changes needed in the software.
At this point the Software is only a tool for your business, but that's not
what your clients want.

Maybe some people will use the Open Source version without paying you. Maybe
they will install it for their pet project, or for a prototype at $dayjob. And
maybe one day they will want to go in production, won't want to be hassled by
all the sysadmin gory stuff associated with running their own machine, and
will just come to you.

You have to remember that you're selling a service, competitors will come and
challenge you _whether they have your code or not_. Make your service awesome,
the people will _still_ be coming for you.

------
pasharayan
As mentioned in the comments here, there are companies like MongoDB, Wordpress
& Spring Framework (of which its parent company was sold for 420 million
dollars) which have open source products at their core and have been
successful companies financially.

I would argue though, that many of these successful companies are more
platform providers than SASS.

------
hbbio
We are asking ourselves the same question.

We have developed for a few years a "more than email" server that we have
already licensed to one major customer.

The open source or not question is one main right now, and until we decide, we
have prepared a free to download offer based on Docker. If you're curious:
[https://github.com/MLstate/PEPS](https://github.com/MLstate/PEPS)

We haven't really launched yet, but think that open sourcing (using for
instance the AGPL license) might bring:

\- more visibility,

\- more confidence for the customers who would buy support and maintenance
instead of licenses,

\- the opportunity of creating a community (if not on the core product, at
least on extensions)

\- the loss of a few potential customers that would just use the open source
version instead of work with us.

------
Hates_
The example that springs to mind is Spree
([https://spreecommerce.com/](https://spreecommerce.com/)). Spree itself is
open source, but Spree Commerce make their money from support, implementation
and premium offerings.

~~~
tmikaeld
The issue with Spree is that they rely on Wombat for connectivity to other
systems and Wombat is NOT open source, it's a hosted SAAS solution. So by
choosing Spree, you are inherently locked into using Wombat as well.

------
julie1
A programm is made of code and setup/tweaking.

If you make a program for interconnecting element together (by definition a
complex system) it can yield chaotic behaviour. What will be important will
not be your code for doing so, but your setup.

You may not want to spread your specific setup, but you can release good brick
of your code that may benefit from externalities (the more it has adoption,
the more it enforces your position on the market). (virtuous cicle)

You can also release on purpose shitty free softwares blocking the devs from
easily be able to use their platform if there are not «pro» of your complex
solution... like systemd (vicious circle, the more it is adopted, the more you
block competitors)

------
flohofwoe
IMHO, your source code is not what makes your product special, it's your
service and support that counts and is valuable to customers. There's plenty
of examples where at least a core product is open source under very liberal
open source licenses, but a company behind it sells support, services,
extensions etc around the open source core product. I think that at least
companies are more interested in buying your services around the product
(guaranteed support response times, customization, training, ...). However I
mostly know infrastructure tools which follow this philosophy (e.g. Vagrant,
Chef, puppet, various database products etc...).

------
flowerpot
For an application to be ready for customers there is usually a lot more
around it. I've met the guys from codebox.io and gitbook.com and what they did
with codebox was, they open sourced the web-ide, however, all the
infrastructure they build around the SaaS offering was what actually made it
work. While users have the possibility to help improve the essential part of
your offering, it will still be a lot of work for someone else to be the
copycat.

------
beberlei
An example of this is Travis CI. Most of their platform is open-source, still
they are pretty successful with their companys SaaS and Hosted solutions.

------
subpixel
webhook.com is open source, and an amazing tool. Could a Russian or Chinese
developer basically recreate their service for a different market? Yes, but
not without significant work. And then, unless they are as committed to making
their product awesome as the webhook.com team is, they'll always be looking
over their shoulder. E.g as webhook.com internationalizes, etc.

Is it likely someone would try that in the English-speaking market? I just
doubt it. Technology that someone else is using and improving but also made
available to you will never be a competitive advantage.

------
jbrooksuk
I'm grateful for you asking this as I'm in the same scenario now.

------
krallin
This is exactly what we're doing at Scalr
([http://www.scalr.com/](http://www.scalr.com/)). Our experience has been the
following:

\+ An open-source version that folks can download, install, and trial is a
great way to get your software in as many hands as possible. However, that's
also more work for you: if folks download your software and it doesn't install
/ has bugs they can't troubleshoot, you're providing a very bad experience,
and that will reflect badly on your commercial offering.

\+ Research your market first. In our case, it's increasingly difficult /
unpopular today to provide developer / IT tools that aren't open-source. In
other words, being open-source is becoming a requirement.

\+ Open-source offers reassurance to enterprise customers who might not have
considered your product otherwise (you're small, and they don't want to tie
their success to your survival, but if your product is open-source, this
concern is more limited). There again though, it depends on who're selling to.

\+ Our product hasn't been forked / used by a competitor. This wasn't really
ever a concern. Note that we're following a model where we do open-source
releases on a 3/6 month basis (we don't develop in the open); that's a reason,
too.

\+ We _did lose_ several prospects to our own open-source software, but we
also _acquired_ several customers who transitioned from the OSS edition to the
commercial edition. the only incentive at this time to choose the commercial
edition instead of the open-source one is "support and more frequent updates"
(which is good, but not always enough to get prospects to sign you a check).
Before you decide to open-source your product, think very hard about how
you'll differentiate your open-source and commercial editions (options include
delaying updates, differentiating on features, support...).

\+ Most of our revenue is now coming from the commercial single-tenant
edition, whereas it used to be the SaaS edition. This happened after we
pivoted to the enterprise, and made it much easier to deploy your own Scalr
installation (it used to be a pretty daunting task).

\+ We're not getting that many contributions (probably largely because of the
model I mentioned above), and because so far we haven't had the energy to
encourage them. In other words: just putting your product out on GitHub
doesn't mean some folks from the internet will suddenly start working on it
for free. That just doesn't happen. We did get a few very-well-thought-out bug
reports, though!

Ultimately, I'd conclude with saying that open-sourcing your product is a
solid way to get more attention. However, it's also more work: you're creating
a competitor (your own product) that you must somehow beat in deals, all the
while making sure that that competitor is solid enough that it doesn't turn
people off your product.

Hope this helps!

You can reach me at thomas@scalr.com if you have questions you think I could
answer!

\----

One last thing that isn't stricly-speaking sales related is people. We have an
open-source culture here at Scalr, and there are employees (including myself)
for whom that matters a lot.

------
brudgers
Foolish? That covers a lot of ground. So much that the only answer is "it
depends."

The first thing it depends on is where one is wandering on a spectrum from
Coca-Cola brown beverage trade secrets to full on Stallmanism. People can and
will disagree about "the right thing" using plausible arguments based on
reasonable assumptions [this doesn't preclude implausible arguments based on
unreasonable assumptions or the other corners of the 2x2 grid]. We all decide
what sort of person to be.

Since this is a common conundrum, Spolsky has encountered it and being Spolsky
has clearly thought about the issue. My understanding, and he can correct me
if I'm wrong is:

    
    
       1] open-sourcing should be done because it benefits users.
       2] open-sourcing doesn't always benefit users.
    

My gut says that Spolsky and Stallman more or less would agree on something
like the language of 1]. They don't on 2]. Spolsky takes the philosophically
utilitarian approach to "because": if it benefits users, then open source.
Stallman takes a philosophically deontological view of "because": Open source
always benefits users. There is no 2] for Stallman. For what it's worth, I
admire him greatly for that.

Wasabi is FogCreek's VBscript compiler. It performs a specific task. That task
doesn't require a math library so Wasabi doesn't have one. The only people who
need it are Fogbugz customers for the purpose of using Fogbugz. They don't
need Wasabi to have a math library. [wasabi]

The compelling rationale for not open-sourcing it is that it basically sucks
as a compiler for the way people usually use compilers. In the very limited
use case of Fogbugz, it doesn't suck. It's even good enough for Spolsky. If
someone wants to learn about compilers _The Dragon Book_ is better. If they
want to learn from example code, there are much better compilers in open
source. Is the world better if using Wasabi in the wild just plain sucks and
studying the source code leads to poor conclusions about writing compilers?
Probably not.

Why not just open source all of Fogbugz? It uses technologies which are
licensed under terms incompatible with various open source licenses. The same
is true of StackOverflow. They both have free as in beer options. It's a more
generous business model than used car lots operate under.

Since you are asking the question, you're in the land of utilitarianism.
Utilitarianism is hard because it requires weighing potential harms against
potential benefits. That's engineering for you.

I think the world is better for what StackOverflow provides right now than it
would be if it provided less but was entirely open source. The pace of
improvements that not having to patch bugs on other people's systems allows
outweighs the benefits of it going the route of PHPbb.

Good luck.

[wasabi]:
[http://www.joelonsoftware.com/items/2006/09/01b.html](http://www.joelonsoftware.com/items/2006/09/01b.html)

