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.
Exactly. RedHat was able to grow into a publicly traded company because they happened to be in the right place at the right time and were lucky and were smart.
In the years since, people have made money on FOSS. But nobody has come close to making money from FOSS at the scale of RedHat. Making money in a way that scales off FOSS is hard enough that it put Sun out of business.
>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, ...
>There have been only 3 successful open source companies ever: MySQL, Jboss, and Redhat
See now, there's just no reason to go around saying things like that. Even if that were true (it's not), how would you know that it's true? Do you have a complete database of profitable businesses in your head? I doubt it. A significant number of open source companies are privately held, and there's really no telling how successful they are.
Anyway, right off the bat, you missed Mozilla Corporation.
Beyond that, the question of whether a company that does nothing but develop FOSS is irrelevant. The important question is whether developing FOSS can be a major part of a successful business strategy. You might start by asking Google and Apple.
Mozilla Foundation is non-profit. Mozilla Corporation is for-profit, and makes most of its revenue by selling the default search engine slot in Firefox to Google.
>I think the companies listed only develop Open Source software and sell services.
That's true, but I think it's looking at the situation completely wrong. It's sort of like saying that making left shoes is unprofitable because there are so few successful businesses that exclusively manufacture left shoes.
Bootstrapping to success is difficult, period. I think it would be hard to find examples of companies that bootstrapped their way to success running almost any kind of business (some SaaS apps and mobile app things, maybe).
Nonetheless, I think it's entirely possible, and we [Fogbeam Labs] are certainly working very hard on a new "Open Source company". The thing is, you're right that "open source as a business model" is no longer a new idea, and simply being open source isn't enough to guarantee a certain level of buzz and attention. So it's harder now, but that doesn't mean it can't be done. To us, being "open source" is a differentiator, but it isn't necessarily the main thing that separates us from our competition. We think it's important, we think it's The Right Thing To Do, but we still have to deliver more value than the other guys at the end of the day and we're going to have to learn to out market the other guys.