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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:



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)



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!

> 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.

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.

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.

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.

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.

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.

Right. I'm talking about for our particular industry. This definitely isn't true of all.

I think Open Source has been overloaded to mean something else so that profit can be made while being morally superior.

IMO Open Development is what open source originally meant. Open development is only sustainable if devs == users, otherwise devs going to burn out eventually. Open source companies (as per your defintiton) are profitiable because the oss is not the primary product but a feature. Their primary products are indeed closed.

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