
Open-source infrastructure is not venture-backable - panic
https://medium.com/@nayafia/how-i-stumbled-upon-the-internet-s-biggest-blind-spot-b9aa23618c58
======
jondubois
I don't know anyone who has raised VC funding for an open source project.

The most surprising example of this for me is Socket.io
([https://github.com/socketio/socket.io](https://github.com/socketio/socket.io))
- This is a hugely popular open source project; but it was never able to get
funding on its own merit - To the VC world, it was always seen as a 'side
project' of another startup - Not as a fundable project in its own right.

The archnemesis of open source infrastructure software are services. By
funding services exclusively, VCs have been actively pushing the adoption of
services to the detriment of open source... For example, instead of
encouraging startups to run their own open source database engine (which is
quite feasible), startups may be tempted to use a hosted database-as-a-service
instead (because it was advertised to them). Instead of using an open source
CMS and host it themselves, they will use a hosted as-a-service solution (even
though it's more expensive and often doesn't make sense for this startup
economically). Instead of doing their own performance monitoring for their app
(using an open source tool), they will use a service instead.

Not so long ago, the 'as-a-service' companies which did well were the ones
which had roots in open source and actually did a lot of OSS work themselves
(E.g. Wordpress, Red Hat). Now you have a lot of as-a-service startups which
came out of nowhere, raised a boatload of VC funding and are stealing all the
limelight away from smaller OSS (pioneering) projects who have been working
towards a specific vision for many years.

~~~
ageek123
It's totally untrue that VCs are "funding services exclusively." Just within
the Hadoop/Spark ecosystem there are Cloudera, Databricks, Hortonworks,
Tachyon Nexus, and others. In storage there's MongoDB, Couchbase, Cockroach
Labs, etc. In every infrastructure area there are many very significant VC-
backed open-source companies.

~~~
lmeyerov
The Spark companies are services companies of all flavors. (Interestingly, a
lot of drama around their later-stage treatment of open source vs. paid, but I
won't get into that here.)

------
nzoschke
We're working on open source cloud infrastructure at Convox (YC S15).

[http://convox.com/](http://convox.com/)

[https://github.com/convox/rack](https://github.com/convox/rack)

The current technology goal is to build a high quality "batteries included"
way to setup and operate AWS for engineering teams. We are working for a low
complexity, high reliability system:

* 1 command installer to provision a VPC, container cluster, and other important AWS services

* 1 command to deploy apps to the cluster

* Following best practices for cloud architecture (immutable infrastructure, automated updates and rollbacks)

* Leveraging AWS's reliability and scalability (apps are ELB -> instance, nothing experimental)

I'm heavily biased, but it does feel like important work that could have a
huge impact.

Companies could save a tremendous amount of time, energy and money if they
don't have to re-invent the wheel and build bespoke tools.

Programmers just getting started deserve a way to learn and use AWS without
needing to know the intimate details of 20+ services.

Docker is a great example. We really couldn't build our project without
Docker. The amount of expertise that's encoded into the Docker API,
documentation and growing ecosystem is amazing. When every computer and server
talks the Docker API, we all can focus more on our business and less on the
systems that run it.

~~~
bobwaycott
Doesn't running on AWS make this decidedly and automatically _not_ open-source
infrastructure?

[edit]—typos

~~~
nzoschke
The article is also talking about the software tools that glue everything
together.

> Open source infrastructure refers to all the tools that help developers
> build software. On a deep level, it includes physical things like servers,
> but closer to the surface, it also includes things like programming
> languages, frameworks, and libraries.

I also don't follow the AWS -> not open logic.

I lease resources in someone else's data center. I use proprietary software
services when they make building my business software easier.

AWS is not an turtles all the way down open stack, but their docs are good,
have open source clients for all their APIs, and offer up standard Linux and
Docker systems.

Convox is open source software. It makes setting everything up easy and
ensures total access and visibility into your resources. It also adds open
protocols like we hooks and syslog to integrate with your other systems.

You can't get the source to AWS to run it yourself, and you have to accept
Amazons pricing, but it's still a very open ecosystem.

~~~
23david
Providing open-source clients does not make AWS an open ecosystem. If
anything, my sense is that the overall direction of the AWS platform has been
to get more and more proprietary and closed with initiatives like Lambda and
Redshift that can't exist at all outside AWS. Rather than being some
indication of the openness of the platform, I'd say that having open-source
clients and sdks simply makes good business sense.

Once you're up and running on the AWS platform with any significant
infrastructure setup, you're basically locked in for life. I hope there are
counter-examples, but I'm unaware of any significant migrations off of AWS in
the last few years. Some of that is due to their overall pretty high service
level, but it's also incredibly hard to replicate the AWS infrastructure on
your own because the tooling either doesn't exist or is immature.

I think there's a really under-served niche of startups with AWS spends of
greater than $200K/year that would love to move some or most of their infra
off of AWS to achieve greater cost saving or unlock different product
possibilities that can come with running in a datacenter or across different
cloud providers. And would be willing to pay for services and tools to fill
that need. I'm finding myself in that situation now, and even though we've
been careful to not get tied in to most of the managed AWS services, we're
still facing lock-in due to heavy integration with cloudformation. Without a
good open-source or managed service alternative to just cloudformation, we're
basically faced with needing to completely re-architect our systems if we move
off of AWS. And full re-architecture initiatives tend to stay near the bottom
of the Devops backlog if things are working.

~~~
nzoschke
Redshift is Postgres 8 something. It has proprietary extensions but I've had a
really easy time getting data in and out in my limited usage.

I saw a local Lambda emulator today on HN.

But I do understand your concern. Software on AWS has an serious gravity and
is hard to move.

I totally understand the CF challenge. I'm locked into that tool too.
Terraform is great but doesn't really offer anything to replace the deepest
parts of CF.

Which brings us back to the article. More funding for tools in the space would
be huge for all of us.

------
freshhawk
This is a type of discussion that comes up often. There are some very
important things to consider to avoid causing unintentional harm.

First, understand the difference between social norms and market norms (I like
this overview: [http://danariely.com/the-books/excerpted-from-
chapter-4-%E2%...](http://danariely.com/the-books/excerpted-from-
chapter-4-%E2%80%93-the-cost-of-social-norms/)) and how the introduction of
market norms crowd out social norms (this is a good overview:
[https://natewkratzer.wordpress.com/2013/07/23/market-
norms-a...](https://natewkratzer.wordpress.com/2013/07/23/market-norms-are-
crowding-out-social-norms-and-society-is-poorer-as-a-result/)).

Now that you have the necessary context, you can understand why I'm extremely
doubtful that VC's can realistically have a large positive impact on the open
source community.

Open source projects need donations in talented engineer time, not in money.
There isn't enough money available to compensate for the man-hours invested in
open source projects.

Open source projects are successful because they motivate contributors with
social capital rewards of some kind and because they allow many different
actors to combine human resources to eliminate shared costs/problems.

If some kind of wealthy supervillain wanted to destroy open source the best
way to do it would be to inject a lot of money into the system, get everyone
to start thinking in terms of how much they will be paid per hour to
contribute to the project. It would be peanuts. Now the market norms would
eclipse the social ones and they would mostly stop contributing. It would
probably also be useful to use the funding power to steer projects towards
architectures useful to you and less useful to others, if some of those others
are your competitors then it may be your duty to do so.

This overlaps quite a bit with the existing naive view of the open source
community as a big group of untapped future unpaid interns to exploit as well.

This, of course, doesn't mean that there isn't promise in funding
infrastructure projects developed by paid contributors that are donated to the
public on completion. Just that mixing the two models almost certainly won't
work.

~~~
jldugger
> Open source projects need donations in talented engineer time, not in money.

As a infra provider to many open source projects, I have a very solid way of
converting money into engineer time: I hire and train them.

~~~
freshhawk
Sounds right to me, I was talking more about Patreon or bounty type methods of
converting money to engineer time.

Since you have the experience I am very curious about one aspect of this, does
the fact that some fellow contributors are paid have a noticeable effect on
volunteer contributors. As in "Why would I do this for free when Alex gets
paid?" or "Fuck this, I'll let the paid guys do this annoying part" or even
just a cultural divide between paid/unpaid or a drop in volunteer contributors
in general?

The theory says there would be a small but noticeable effect along those lines
_if_ people are thinking about it.

I've seen similar effects with Patreon type contributions, once the money
comes once things change and once the money is spent work stops completely
until there is more money. Most never come back. That and you get promising
fun projects dropped in favour of the stagnant projects with better name
recognition, which doesn't last because fixing legacy bugs for less than
minimum wage is not a fulfilling way to spend your personal time.

I'd also be interested in how you'd feel having a donation of skilled engineer
20% time compared to money to hire someone less experienced but full-time.

~~~
jldugger
> Since you have the experience I am very curious about one aspect of this,
> does the fact that some fellow contributors are paid have a noticeable
> effect on volunteer contributors.

I realize now that we're talking about different meanings of the term
infrastructure. My organization offers co-location and hosting services to a
variety of open source projects. You can think of us as sysadmin to the open
source community. And for all the talk about funding developer time,
discussion about the operations side is notoriously quiet. There's a few good
actors that help us out, and we're trying to raise awareness of the issue.

Within our org, we try to contribute to open source as we go, and we have a
software development team, but we're not paying people to write software for
specific external projects. AFAIK, nobody is demotivated by our existence. You
just don't see a lot of volunteers to get paged in the middle of the night
when the website is down.

The open source software we fund development of is largely to suit our
operations team needs. They're not the sort of software projects you'd expect
people to volunteer for, which is why we allocated student developers to start
them. It's hard to separate the compensation effects on volunteers from the
general 'I don't run this software' effects, and since we didn't inject money
into existing projects, there's no debates about the inequity.

There's another unstated funding challenge: if you want to maximize value your
money brings to open source, you want to find someone who can escalate their
contribution. If you assume the Steve Hansons of OSS are already spending all
their time contributing, handing them money supports the status quo, but
handing money to students who would otherwise be flipping burgers brings new
faces, and additional effort to projects. In a sense, it matters whether your
charitable goal is to reward lifetime contributions, or to gift the community
better software, and in small ways these can be contradictory. Especially if
continued funding relies on demonstrating return on the gifts, merely
perpetuating the status quo is a problem.

> I'd also be interested in how you'd feel having a donation of skilled
> engineer 20% time compared to money to hire someone less experienced but
> full-time.

So our model is to hire student employees. They're cheap, and we can be
flexible around their schedules in ways other potential employers cannot. We
participate in GSoC, and are open to contributions, but generally speaking
what we develop is not relevant for home use. On the operations side of
things, we participate in the Chef ecosystem, but there's a level of access
and such that open source infra teams prefer to control access to. Do you want
to publish what exact version of nginx you're running?

~~~
freshhawk
Ah, in retrospect that makes sense and I misunderstood.

> And for all the talk about funding developer time, discussion about the
> operations side is notoriously quiet. There's a few good actors that help us
> out, and we're trying to raise awareness of the issue.

> You just don't see a lot of volunteers to get paged in the middle of the
> night when the website is down.

That's a great point, that's some good work you are doing and I'll admit that
I needed my awareness raised on that issue as well. Thanks.

> In a sense, it matters whether your charitable goal is to reward lifetime
> contributions, or to gift the community better software, and in small ways
> these can be contradictory. Especially if continued funding relies on
> demonstrating return on the gifts, merely perpetuating the status quo is a
> problem.

Well put, I'm a believer in the end goal being better free software and
rewarding contributors is a (complex and risky) means to that end.

Good points about the benefits of bringing in juniors and the subtle but
important differences between openness at different architectural layers as
well.

------
mwpmaybe
From the article:

"But hardly any founder, VC, or big tech employee was aware of the issue, even
when they used or benefitted directly from these projects."

I just can't wrap my mind around this. As a former "big tech employee" and
current founder I am constantly cognizant of the free software that shapes my
working day and every solution I implement. From kernels and userspace tools
to compilers and interpreters to IDEs and VCS to frameworks and protocols to
online services and communication tools... it's nuts how much stuff we all
use. I'm living on ramen now but one of my personal goals is to be successful
enough to give back in a substantial way to these developers and projects that
have been so instrumental to everything we're doing.

Do people really take all this for granted? Are we as a community not doing a
good enough job of teaching/explaining it?

~~~
adekok
Absolutely, many non-engineers are unaware (or in denial) that they benefit
from open source projects. In one previous company I worked at, a VP told me
how terrible it was that an open source project was competing with them, and
that open source (in general) was against capitalist principles.

I had to explain very slowly that if he couldn't compete against an open
source project... perhaps his company with tens of millions dollars in VC
funding didn't deserve to succeed. And, that the company's product _depended_
on using dozens of open source projects for free.

Needless to say he wasn't pleased.

------
amlgsmsn
Mozilla with it's hundreds of millions of dollars a year in revenue comes to
mind as a steward of such a initiative. But they seem to have been spending
the money in pursuing project without a chance to succeed like FirefoxOS and
expensive office and perks.

E.g. [https://ryanseys.com/blog/summer-at-
mozilla/](https://ryanseys.com/blog/summer-at-mozilla/)

>Interns at Mozilla, myself included, are truly spoiled rotten. Competitive
pay, free travel/housing, free snacks/drinks and catered lunches every week
were really just icing on the massive cake that was my internship!

>Oh, and did I mention that Mozilla also sent me to Paris, France?! Yeah, it
happened. For my final working week, myself and a handful of the Identity team
met up in the Paris office and hacked on Persona, and ate… and drank… a lot!

[http://www.businessinsider.com/inside-mozillas-amazing-
offic...](http://www.businessinsider.com/inside-mozillas-amazing-office-space-
in-san-francisco-2012-3?op=1)

[http://ngokevin.com/blog/mozilla-day-one/](http://ngokevin.com/blog/mozilla-
day-one/)

~~~
shawn-furyan
It's not surprising that compensation and perks of non-profits converge with
those of for-profits in the same industry. They are hiring from the same
talent pool.

Also, at the margins, I tend to think that perks allow organizations to hire
more cheaply than wage increases.

~~~
marvy
> perks allow [hiring] more cheaply than wage increases

That sounds like the kind of thing some bored economist must have done some
kind study on at some point. I'm too lazy to look for it, so maybe someone
else can volunteer. I'll just say that sounds very likely to be true.

~~~
infinite8s
Doesn't even need an economic study. Just some back of the envelope math. Free
daily lunch would probably be about $10-$15 per person (especially if ordered
in bulk). There are about 250 working days a year (50 weeks * 5 days) so
that's only an extra 4k a year in expenses (and perks can be written off as a
business expense and not incur income tax expenses). Free daily lunch sounds
much better as a perk than a few extra grand salary.

------
agibsonccc
There seems to be a lot of confusion around open source projects vs companies.

There are plenty of for profit companies around open source software that are
venture backed:

Mesos(mesosphere)

Spark(Databricks)

Flink (Data Artisans)

Zeppelin (NFLabs)

Scala (typesafe)

Linux (Red hat)

Hadoop (Horton, Cloudera, MapR)

Elasticsearch (Elastic)

PredictionIO (PredictionIO Inc)

Meteor (Meteor Inc)

Deeplearning4j (My company skymind)

RethinkDB(RethinkDB inc)

Redis (Redis Labs)

Wordpress(Automattic)

Drupal(Acquia)

Docker (docker inc)

Coreos (coreos inc)

NGINX(nginx inc)

and the list goes on!

Acquired companies also include springsource (VMWare) , jboss (redhat), and
ansible (redhat)

Lastly, there's open source from companies such as facebook where the goal is
likely hiring. By open sourcing internal tools, it's easier to onboard new
devs for recruiting. If you like their tools why not work there?

The key distinction people are missing is that these companies don't monetize
open source directly. Instead open source is used as a means of building a
user base that will indirectly generate revenue in other ways such as support,
licensing solutions around or on top of the software (open core), or through
some form of consulting.

FOSS such as the GNU software is a different beast where the goal isn't
profit.

I think the confusion is: we can all use the software provided by these
companies for free (depending on the context/license) without paying them and
contribute back in other ways such as bug reports and the like.

The other thing here is individual devs monetizing their singular github
repos. There's no reason you can't charge for support or consulting. Radim @
gensim does exactly that and he does fine.

Just because you can git clone a repo doesn't mean you can use it effectively.
You typically seek support via community or commercial. There's no reason both
can't exist and they both do.

I hope that helps a bit!

~~~
ageek123
> The key distinction people are missing is that these companies don't
> monetize open source directly. Instead open source is used as a means of
> building a user base that will indirectly generate revenue in other ways

This isn't a distinction, it's the definition of open source. By definition if
you have an open source company, you're making money through some channel
other than keeping the software proprietary and selling binaries of it. So
your list quite rightly invalidates the author's claim--it's not just some
subtle distinction that was ignored, it's proof that you can indeed make money
from open source software.

~~~
agibsonccc
Well that depends. You can make money from open source. It more comes down to
HOW which is rather than licensing code or subscription licenses BECAUSE the
software is closed.

I agree at what you're getting at though.

~~~
lmeyerov
Most of these companies are a freemium variant of open source. You get a bit
free, and then pay for proprietary bits, e.g., admin tools and not getting
hacked.

This has been a big question for our company. Ultimately, one of our
viewpoints has been that the current breed of open source companies,
especially with VC pressure, struggle to align with the community after a
couple years and reality sets in.

~~~
agibsonccc
Right. We're open core ourselves. In our case the algorithms which researchers
can benefit from aren't the same as what the businesses pay for (GUIs,
integrations,support,..) which allows us to serve both fairly well.

~~~
lmeyerov
So let's play this out:

Community user: this is awesome, let me add this bugfix

Company: bugfix tweaked/improved & in mainline. Come speak at our conference!

Community user: cool. Now here's this admin tool.

Company: uh,no,sorry,please keep that out of the main repos.

Community user: but admin is pretty central...

When the center of the community actively dissuades core contributions, which
is what we see, the alignment isn't working.

~~~
nickpsecurity
This is a worry that's mentioned in any article of business models. Do you
know if anyone has collected actual data on how often a community version got
parity with enterprise edition and significantly burned the sales?

It's a good hypothesis but I'm not sure it happens often in practice. Most
companies I found that had a premium model still have a premium model. Mine
wasn't a large sample, though.

------
ErikAugust
"My Free Software Runs Your Company", reads the shirt that Aaron Swartz used
to sport:

[http://i.huffpost.com/gen/1253014/thumbs/o-AARON-SWARTZ-
face...](http://i.huffpost.com/gen/1253014/thumbs/o-AARON-SWARTZ-facebook.jpg)

~~~
toomuchtodo
Can this tshirt still be purchased somewhere?

~~~
striking
This was a Xen T-shirt around 2013-2014
([http://wiki.xenproject.org/wiki/Xen_Project_Swag#Hall_of_Fam...](http://wiki.xenproject.org/wiki/Xen_Project_Swag#Hall_of_Fame))
but it seems to be missing from the xen.org store unfortunately
([http://www.cafepress.com/xen_org](http://www.cafepress.com/xen_org))

It seems simple enough, though. Make your own!

~~~
xorcist
The sleeve says "Best Practical", makers of RT, so that's presumably where he
got his.

------
ralmidani
I'm the founder of a startup working on free software applications.

Making money off free software infrastructure is hard, because infrastructure
is meant to be used by developers. A developer knows (or can learn) how to
implement, manage, and maintain your piece of free software infrastructure, so
how can you convince a developer to pay you for support?

Applications, on the other hand, can be targeted at non-developers. These
users can convince themselves or their bosses that your free (as in freedom)
application is worth paying for, so you can make it run smoothly and let them
focus on running their business.

The only solution I can think of is for free software infrastructure
developers to set up foundations which can take donations, and for application
developers to support the infrastructure projects they depend upon.

One of the best examples of this is the Django Software Foundation. I made a
donation last month, and I haven't even started making money.

~~~
nzoschke
I agree with your general explanation of the challenges.

I like the example Automattic sets. They give away the WordPress engine, but
also run it as a subscription service.

Running software is hard, and there are plenty of people that will exchange
money for an SLA, both service availability and support response time.

------
rdlecler1
I'd love to see something like NIH grants for open source.

------
wildmXranat
So I like everything that Zed Shaw wrote on this topic before. Whether his
points were mostly or somewhat correlated with her point of view, I don't
remember, but it was full of great ideas.

His project Mongrel, allowed other for profit Ruby projects exist in the way
that the community needed.

A good analog of getting paid with 'free to use' theory are calculators. We
know that 2 + 2 is 4. The theory is free and out there. If you want a thing
that does the calculation for you, then you gotta pay $5 for a calculator.

CS theory is similar. Each tool or abstraction builds on a previous one. While
we can't charge at each step of abstraction, we can at least license
accordingly to encourage sharing of profits made from it's use.

~~~
nickpsecurity
Got a link to a comparable Zed Shaw post you were thinking about? I've only
read a few of his but enjoyed them.

------
dkuebric
What about chef? Mesos? Docker? Sysdig? Drupal? Mongodb?

Isn't there a lot of infrastructure software that is maintained or outright
developed by VC-funded entities?

------
diziet
Ethan Kurzweil at Bessemer and Puneet Agarwal at True both have done NPMs seed
and A rounds:
[https://www.crunchbase.com/organization/npm#/entity](https://www.crunchbase.com/organization/npm#/entity).
I've never met Puneet but I know Ethan has a thesis regarding
platforms/developer driven projects.

------
alexnewman
cloudera...?

------
dzdt
Bad headline. Article is about identifying open source infrastructure tools as
an overlooked category for venture capital funding.

~~~
sarciszewski
Thank you for that spectacular TL;DR.

No rational investor wants to invest in something that will absolutely not
give them a return. Most open source infrastructure tools lack a business
model to capture revenue from its users.

So one of several things will have to happen in order for open source
infrastructure to get funded:

    
    
        - Investors will part ways with their money, full knowing that they
          will not see a return. (Unlikely to happen.)
        - Investors will strong-arm infrastructure projects into restructuring
          into a for-profit model. (Unlikely to succeed.)
        - People other than investors will have to step up. (Plausible.)
    

"People" here can refer to independently wealthy individuals, successful
companies, the government, or a flash mob of donators (crowd-funding).

(Note: Return means capital return, not "social good" return.)

For the record, I contribute a little here and there to open source projects
(usually in the form of vulnerability reporting) and started several FLOSS of
my own (including several cryptography projects for PHP developers to use in
their projects).

To date, I've made $0 from any of it, and I don't see that changing in the
near future for me.

~~~
adekok
> Most open source infrastructure tools lack a business model to capture
> revenue from its users.

Like youtube videographers? Who start off doing it for fun, and then later
monetize it?

That evidence shows you're wrong.

~~~
sarciszewski
How do you monetize, say, OpenSSL?

~~~
adekok
Charge people for support?

It works for ISC. Why wouldn't it work for OpenSSL?

Heck, it works for me (FreeRADIUS). Why wouldn't it work for OpenSSL?

~~~
sarciszewski
That's not a bad idea.

------
gopi
I think top tech philanthropists like Zuckerberg and Gates should look into
this.

~~~
fijal
As you might have noticed, the problem with this thinking is that you (or I)
don't decide what Zuckerberg or Gates spends his money on - they decide.
However much you trust them to make their decisions, they're ultimately not
responsible to you or anyone else how they do it.

------
jamisteven
Having a really hard time with this article. What is the author getting at? Do
they not understand what "opensource" means? Are they suggesting we somehow
try to monetize the tools surround opensource development languages?

------
someguydave
She completely misses the fact that all of these open source tools run on top
of completely closed and secretive hardware platforms. It's true that Intel
(for example) is 'well-funded', but Intel has a track record of selling out
the user's best interest (even if it is just transparency) for a profitable
purpose. And Intel is among the better companies in the OSS world.

------
hwestbrook
Seems as though she undermines her whole point with the "Here’s what is true
about the “open source is really well funded” myth" section.

The open source projects that people/businesses _really_ care about are
funded. Isn't a non-funded open source project just one an open source project
that no one really cares about?

I think there is a really subtle line that she has missed by assuming all open
source projects developers use are really important. There probably should be
at least three categories: (1) really important projects (funded / managed),
(2) projects that are not really that important (not funded / managed by
community) and (3) those that are not important (not funded / not managed).

~~~
wmf
In recent years it has been discovered that OpenSSL, bash, and NTP (just off
the top of my head) were critically underfunded for years.

