

You Can Make Money with Open Source - shawnjan8
http://blogs.hbr.org/cs/2013/01/yes_you_can_make_money_with_op.html

======
jasonkester
Indeed. That's never been in dispute. You can also make money playing violin
in the subway.

The thing is, if you want to make money, there are a lot _better_ ways to make
money than playing violin in the subway. And if you want to make money with
software, there are a lot better ways to do it than to give your product away
and hope that some of your users will give you charity or pay you for support.

Wait until we see a case study come through about a company selling a SaaS
product who decided to stop charging subscription fees and instead open source
it and charge for support, showing how that was the key to how they made their
fortune. Then maybe we can talk about this as an option worth recommending
over simply selling your software for money.

~~~
elviejo
Mmhh how about Automatic with wordpress?? They give their product for free and
yet have a SaaS ?

Or how about OnVelocity? They provide a source code repository and have hosted
version.

Or SugarCMS ?

Or couchdb with couchbase?

It seems to me that there are plenty of Saas companies that share their
products as open source.

~~~
rmason
Automattic venture round [http://gigaom.com/2008/01/22/wordpresscom-creator-
raises-29m...](http://gigaom.com/2008/01/22/wordpresscom-creator-raises-29m/)

SugarCRM venture round <http://www.sugarcrm.com/about/sugarcrm-investors>

CouchBase venture round
[http://www.venturecapitalupdate.com/funding/08/16/couchbase-...](http://www.venturecapitalupdate.com/funding/08/16/couchbase-
raises-14-m-of-series-c-funding.html)

If you raise tens of millions of dollars you can put off the need to become
profitable for quite some time ;<).

------
rburhum
I am just surprised that in 2013 we are still having this discussion.

There are several ways "to make money with OS"; Service-based models (like
support), Dual-licensing models (think Qt, MySQL, etc), Community vs
"Enterprise" packaging, Extensions to popular packages, Consulting, Platform
ownership, etc etc etc. Why such big surprise?!?

~~~
ArbitraryLimits
Hacker News and the Harvard Business Review aren't really the same "we."

------
kyle_t
I know this article is focused on the business level, but I'm finding this to
be true on a personal level as well. Contributing to open source not only
leads to personal improvement but it essentially creates a public portfolio of
your work. This can lead to more exposure which in turn can lead to more
opportunities (and better paid ones too).

Open Source might not yield immediate benefits (i.e a paycheck) like say
freelancing, but it is an investment in your future.

------
mindcrime
Our[1] entire model is based around open source software. And I mean _real_
open source software... developed in the open, with an open bug tracker,
discussion on public mailing lists, etc.

Now, we don't have a lot of outside contributors at the moment, but we're
certainly open to them and the code, bugs, etc. are already "out there". And
all (or almost all) of our stuff is (or will be) Apache License V2 licensed.

Eventually we'll have a mix of both "productized" versions of existing
projects (somewhat akin to the way Red Hat "productize" Linux) and projects
that we started and wrote the bulk of the code for from scratch. Our goal is
to very much follow the Red Hat model with subscriptions being a major part of
our revenue stream, and then complemented by professional services, training
and other add-ons.

In the end will we "make money with Open Source"? I don't know, but we're
going to try, because A. it's what we believe in, B. it's The Right Thing To
Do and C. it makes the world a better place whether we succeed or fail.

[1]: <http://www.fogbeam.com>

------
rmason
This story is a bit misleading. If you study the successful companies using
open source as a business model you will find they all raised large amounts of
venture capital. That was during the window when open source as a business was
a brand new idea.

That window has now all but closed and it is exceedingly difficult to find
examples of successful companies that bootstrapped their way to success
running an open source business.

~~~
pm90
Check out Enthought <http://www.enthought.com/>

They create some of the most used open source scientific computing software,
and still manage to make money (also, a great place to work in, lots of really
smart people)

While this model might not work for everywhere, its possible, it just takes
more effort though.

~~~
pretoriusB
> _Check out Enthought<http://www.enthought.com/> They create some of the most
> used open source scientific computing software, and still manage to make
> money (also, a great place to work in, lots of really smart people)_

Sounds like an outlier that proves his rule. How many more companies make far
more money each with proprietary products in that domain? Mathematica, Maple,
Matlab, SPSS, ...

------
paulhauggis
Can you? yes.

But it's going to be very difficult.

Let's say you have a really popular open source project with an enterprise
version (which pays your bills). Anybody can start up a competing app with
similar features and either give it out for free or charge, making it more
difficult for you to make money and stay in business.

The alternative is to have a service-based business. For one or two people,
this isn't very scalable.

------
jeffh
Disclaimer: I work at ActiveState, named in the article.

I'd just like to point out that ActiveState is not VC funded and is
profitable. We are able to grow other parts of the business from core products
that are enhanced open source (much, but not all, of which is contributed back
to the core open source projects). Most of this is in support and services,
but we also have highly regarded tools products and a popular IDE (Komodo, of
which we fully open sourced the core editor).

Not sure why there are so many negative vibes to this article.

------
mgk
Our main product is a desktop application built on top of the Firefox web
browser. It is triple licensed GPL/LGPL/MPL. We make money by selling add-ons
and a plus version, all of which is also sold under an OSS license (modified
BSD). Similar to what Red Hat does, we modified the BSD to prohibit the use of
our trade name (International registered wordmark) in any secondary distros of
our OSS. In the end, all you have is a brand. Protecting that, protects the
revenue stream.

------
cardine
Just because you can make money with open source doesn't mean it is a good
business model.

~~~
mindcrime
Open Source _isn't_ a business model anyway, and it never was. It's a
development model. Building a business _around_ Open Source implies the need
to develop a correspondingly suitable business model, but "open source" per-se
is not a business model.

------
Avshalom
Also note that for any thing that relies heavily on art assets, specifically
games, open source is largely irrelevant.

------
dedsm
is this a 1994 post?

