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GNU is Not Unix The Almighty Buck

Making Money Using Open Source Software? 540

GamblerZG asks: "As many of us probably know, convincing people to run Free Software can sometimes be a tedious task. However, there are a lot of factors that help us in that regard, and, perhaps, the biggest of them is a simple truth: Free Software is free. It's hard to argue with such statement. I know it, because I faced it today, trying to convince my fellow co-worker that it is possible to profit by writing GNU-licensed code. 'How company can make money, if its products are available for free?' That was a valid question indeed, and I could not find any simple answers to respond with. That makes me wonder, whether there are articles on the Internet, which explain and analyze how Open Source business models work? Do you know any ways to prove that such models can be profitable?" It can be done, you can check out a recent interview with an Open Source Entrepreneur on NewsForge for some hints. What other ideas and business plans do you think would be a good match for a business with an Open Source core?
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Making Money Using Open Source Software?

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  • is it true? (Score:5, Funny)

    by TedCheshireAcad ( 311748 ) <ted&fc,rit,edu> on Wednesday March 09, 2005 @01:56PM (#11890663) Homepage
    Have we finally found the Second Step?
    • Step 1: Write open source software

      Step 2: ...

      Step 3: Profit!

      • Actually it is:
        Step 1: Select already released open source software
        Step 2: Package software as your own
        Step 3: Profit!
    • by Anonymous Coward on Wednesday March 09, 2005 @02:18PM (#11891001)

      I thought the second step was obvious - patent ellipses.

    • by Petersko ( 564140 )
      Have we finally found the Second Step?

      But I don't have a problem. I can quit any time I want to. I just don't want to right now.
  • No-brainer (Score:5, Informative)

    by Qzukk ( 229616 ) on Wednesday March 09, 2005 @01:57PM (#11890684) Journal
    See www.redhat.com, see www.sendmail.com, and so on and so forth. These people sell opensource product support, and make money doing it. This doesn't require paying some "analyst" $50k+ to write you a white paper on how to make money.
    • Re: (Score:3, Insightful)

      Comment removed based on user account deletion
      • Re:No-brainer (Score:3, Insightful)

        by tashanna ( 409911 )
        So... Many... Quotes...

        No one ever went broke underestimating the intelligence of the American public
        Make something idiot proof and the world will make a better idiot

        I checked with my company's IT guy - he's in full agreement. I must admit, it's fun listening to him teach the executives how to use e-mail.
      • Re:No-brainer (Score:5, Insightful)

        by operagost ( 62405 ) on Wednesday March 09, 2005 @02:33PM (#11891208) Homepage Journal
        Offer customization services. Then you will be able to sell maintenance agreements. If someone wants to have your software integrated with their funky app, they won't necessarily have the expertise to do so. Get the specs and make the modifications for them (then release the source code and binaries to them).
    • Re:No-brainer (Score:3, Interesting)

      by WARM3CH ( 662028 )
      These people sell opensource product support
      Good point. It seems that those companies basically are selling support for the programs they have not written themself. Frankly, I don't think this is going to be the answer to the question: How can you make money by writing open-source programs.
      • Re:No-brainer (Score:3, Insightful)

        by Qzukk ( 229616 )
        LOL.

        Here, have a clue on the house. The people who run sendmail.com? It's CTO is the original author of sendmail [sendmail.com]. How's that for making money writing open source software?

        As for redhat, are you saying that having someone who knows how to make 50 software packages work together across 2000 seats in an enterprise situation isn't worth the price of admission to Red Hat Enterprise? Do they need to have written all that software themselves in order to make money off of it? Apparently not, or they'd be out
    • by Chode2235 ( 866375 ) on Wednesday March 09, 2005 @02:41PM (#11891319)
      I attended a chat last night with someone who works for a very large medical device company. They talked about how important intellectual property was to them and that it is their life blood. So they patent as much as possible and lock up everything as tight they can to get a competetive advantage on the competition.

      However, he also stressed "living the mission" where there mission is to essentially alievate pain, help people live longer better lives." And in his next breath he said that his company would sue anyone who copies their ideas to do remote patient check ups on pacemakers etc.

      So I asked, doesn't this contradict the mission, how can you on one hand be for helping people but writing proprietary software that maximizes your revenue? Why don't you open source it all, wouldn't that be a better fulfillment of the mission? He responded by saying that it is essential that the company do this to ensure that it can be financially healthy to continue to provide these services and develop new ones.

      It seemed pretty logical to me, but I want to hear what the /. crowd and the fsf folks have to say as this is a lot of what I hear coming out of this company and even other tech companies. So its a huge obsticle to overcome for the open source/fs movement.
      • I say if their mission is truly something besides get rich/make money they should embrace that other mission.

        They should look at their costs, and their income. Does it take locking something up 15 years that was probably trivial to come up with? (I don't mean the programming just the basic concept that is patented). How much of their cost is on patenting everything? That cost needs to be looked at too.

        I would imagine cutting pay at the top to something that is still plenty high (speculating, maybe the
    • Re:No-brainer (Score:3, Insightful)

      by c0d3h4x0r ( 604141 )
      The problem with a support-based model is that it creates disincentive to make the software easy to use and trouble-free.

      The only open-source model I've been able to dream up which would actually be long-term sustainable and which would actually align business incentives with the humanitarian goal of producing better-quality free software is the "contract programming" model. In other words, you pay me to write some particular software you need, and when the "final" version is delivered to you per contract
  • by spookymonster ( 238226 ) on Wednesday March 09, 2005 @01:59PM (#11890706)
    Charge for support, customization, and installation. Show the customer that your value doesn't end when the code goes gold.
    • Commoditize software.

      in oppposition to what Microsoft is trying to do, Commoditize Hardware.
  • Support! (Score:5, Interesting)

    by Raypeso ( 851771 ) on Wednesday March 09, 2005 @01:59PM (#11890707)
    I am a big fan of making the source free but charging for support. This gives the user/customer so much more power. They can work on your application all they want, if they get stuck or need help, they call and pay you. You can offer initial setup and configuration. Many large companies charge quite a bit for support contracts. You can as well, with the advantage of having a lower TCO for your customers.
    • "You can as well, with the advantage of having a lower TCO for your customers."

      A lower TCO for your customer means less money for you. And here's the big kicker, if you open source your code and expect to make money off of support, what is going to prevent other companies competing against you on support? Look at IBM and redhat, they make money off supporting OSS projects, but you can't say they are main developers of these OSS projects. Whats to stop redhat bundling your product and offering support fo

      • Re:Support! (Score:3, Informative)

        by ThogScully ( 589935 )
        Business is competitive. You make it sound like it's a bad thing that you cannot maintain a monopoly on support of your product. Compete to be the best support available for your product (or other's products). In the end, it only improves things for everyone.
        -N
        • Re:Support! (Score:2, Insightful)

          by Raypeso ( 851771 )
          Agreed. Innovation is what keeps people afloat, not closed source code. If IBM or Redhat rebundels your stuff, find a way to one up them. This is no different than any other line of business. Lots of companies make widgets, the successful ones find better ways to do it.
      • Re:Support! (Score:3, Insightful)

        by kfg ( 145172 )
        "what is going to prevent other companies competing against you on support?"

        You mean like I make a decent penny now and again by supporting Windows, even though I didn't write it and MS doesn't get dime one of my fee?

        Jeezum Crow, even Billy hasn't figured a way around that one yet, it keeps him up nights working on it, but he still hasn't found the answer.

        Still, there are people who call MS for support instead of me, because it's an MS product, yes? And there are still people who call me because I give t
  • One Possibility... (Score:5, Insightful)

    by bloggins02 ( 468782 ) on Wednesday March 09, 2005 @02:00PM (#11890712)
    Make software that is VERY extensible. So much so that the open-sourced "guts" of the software are pretty much a framework for the extenstions.

    Then, sell consulting to design, write, install, support, and maintain those extensions.
  • Again? (Score:5, Funny)

    by TheWanderingHermit ( 513872 ) on Wednesday March 09, 2005 @02:00PM (#11890713)
    Couldn't we have summarized this as:

    Okay, it's been 2 weeks guys, so we have another programmer who wants to make money programming, but has no idea how to create a solid business model, so let's all put in some work and tell this guy how to make money with FOSS instead of those of us who have figured it out running our own businesses.
  • It's possible. (Score:5, Insightful)

    by rafael_es_son ( 669255 ) <rafael AT human-assisted DOT info> on Wednesday March 09, 2005 @02:00PM (#11890719) Homepage

    Just take a quick look at IBM announce today they're making 38.8 million off Open-Source-based services [blogspot.com] on a single location in the span of four years.

    If that is not money, I dare not fathom what is.

    • Re:It's possible. (Score:5, Insightful)

      by Money for Nothin' ( 754763 ) on Wednesday March 09, 2005 @02:26PM (#11891126)
      Sure, but did they make $38.8m off of open-source based development?

      No, IBM did not. They made that money off of support, not development.
    • .04 percent (Score:3, Interesting)

      by way2trivial ( 601132 )
      38.8 million, on 96.5 billion
      (with a b) in sales in 2004

      what percent is that?
      %.0402
      or .000402 of sales..
      less than 1 half of 1 tenth of one percent
      oh, I'm sorry, that's over four years?
      about 1 tenth of 1 tenth of one percent of sales

      Is that fathomable? I laud IBM for it's participation in FOSS, but- it's not even a drop in IBM's revenues...
  • Well... (Score:5, Funny)

    by Zardus ( 464755 ) <yans@yancomm.net> on Wednesday March 09, 2005 @02:00PM (#11890721) Homepage Journal
    Its easy to make money off of Open Source! Slashdot just posted a story [slashdot.org] on it!
  • It's very easy to make money [mxsinc.com] with OSS but people always complain later ! So much for pretending being "open"...
  • We at openflows [openflows.org] make money supporting open source. We provide professional services to all sizes of organizations and in so doing promote and deploy open source solutions. We put up a site called Why Open Source [openflows.org] that helps explain to our clients, who may not know a thing about it, why we embrace and encourage the use of open source. We work on the front lines of organizational use of computing to help get open source in use by all means necessary.

    Check out this other article about making money and open so [indicthreads.com]

    • So in other terms, you take a product that you haven't written and offer support services. How do the developers get compensated in this scheme? The article submitter is a developer, What is to prevent your company from picking up his product and offering support for it, thus leaving him out of the money loop?
  • by CrazyJim1 ( 809850 ) on Wednesday March 09, 2005 @02:02PM (#11890760) Journal
    If you use this product commercially, and feel its been of monetary value to you. Please donate a fraction of the value of the software. The value of this software is different for each person and company, please be fair. Thank you.
  • This book addresses that issue, to some degree anyway. One of the things I recall (it's been a while since I read it) is about support. Let's say you develop some Open Source software that becomes popular. As I recall, Eric Raymond argues that you can essentially make money from support related to that software. For example, assume you had developed Apache. You could advertise that no one else is as capable as you at implementing somethng which uses Apache, since you (presumably) know it better than a
    • Many people would rather have a high paying job in a corporation, with benefits and such (e.g an acolyte of the Cathedral) rather than scrounge around in a bazaar surrounded by hippies shysters and knockoff artists.
  • If you sell the code along with your product then your project is still open source and you make money.
    Open doesn't always mean free.
  • OSS piracy (Score:5, Funny)

    by bonch ( 38532 ) on Wednesday March 09, 2005 @02:03PM (#11890774)
    One thing threatening Open Source today--piracy.

    As we have already seen today [slashdot.org], the GPL is under attack from evil forces known as "pirates." These shadowy folk silently steal source code and violate the GPL, infringing on the rights of GPL authors. They are nothing more than thieves getting a free ride off the work of others, and I for one am disgusted at the idea of it. As you can see in the previous article, clearly Slashdot is also sickened by the idea of copyright infringement and piracy.

    Some have even called for a lawsuit against these pirate thieves. Suing individual infringers has always been a position that Slashdot and its readership has supported, so it's only fair that the original GPL authors protect their rights and safeguard their material from being stolen in the future. I think we should all support any lawsuits against these infringers to protect the rights of GPL authors everywhere.

    I appluad Slashdot and its readers for always taking a proactive stance against piracy and copyright infringement in general, and I would like to join the cause against this "source code theft." Piracy is a major threat facing OSS today.
    • "Suing individual infringers has always been a position that Slashdot and its readership has supported"

      Unless it's industry-backed media or software written by EVIL corporations. Then it's called "going after grandma and 12-year-old girls".

  • In the world of educational CMSes, Moodle is pretty much king of the roost. Not only has Martin Dougiamas helped build and direct a quality system [moodle.org] that has a presence in over 100 countries (nearly 3000 registered sites), but he is successfully parlaying his expertise in service and support [moodle.com], providing the opportunity for others to become support "partners."

    I have never been one to believe that's it's criminal to make a living off F/OSS. I think you can have it both ways, and Martin does a great job at pro
  • This is easy (Score:5, Insightful)

    by Tom7 ( 102298 ) on Wednesday March 09, 2005 @02:03PM (#11890787) Homepage Journal
    This is easy: Charge for the things you do. Making software isn't easy--it takes time and effort--so you should be paid to make software. Supporting software isn't easy, either, and so you should also be paid to do it. (Making copies of software is easy, so it's not fair for you to be paid to do it.) Neither of these sources of income are incompatible with free software. It's simply a matter of compensating people more directly for the services they provide.
  • Er (Score:5, Funny)

    by cca93014 ( 466820 ) on Wednesday March 09, 2005 @02:04PM (#11890799) Homepage
    'How company can make money, if its products are available for free?'

    In Soviet Russia it's a valid question, my friend, but not in English.
  • Look at Linksys and TiVo. Well Linksys anyway makes good money off of Linux products.
    It really depends on the market. Odds are pretty good that you will not make money on a spreadsheet, database, or game You may make good money on a vertical or embedded system. How many people make good money using GCC?
  • As they say ... (Score:2, Insightful)

    by FnH ( 137981 )

    Open Source is only free if your time is free.

    There's alot of truth in that statement. It also means you can make money by setting up opensource systems for other people (and perhaps you'll have to add a feature or provide support to make the sell)

    You could also get paid for simply adding a feature. You could only sell this feature once, which is a big difference with the proprietary model. You can respond to this by simply asking more money off course.

    Overall, it's true that Open Source forces you to

  • by Doc Ruby ( 173196 ) on Wednesday March 09, 2005 @02:06PM (#11890828) Homepage Journal
    Successful companies do not produce "products" so much as we produce "customer satisfaction". Products are necessary props in producing satisfaction, but they're not the only necessary props. Software is used to produce that satisfaction. The programmer's dream is to work only with our computer, producing that "killer app", and publishing it for the hungry masses to consumer. The reality is that customers must be sold tom if they are to pay, and that software is part of the sales process. So keeping the source closed is really sleight-of-hand, a way to protect inferior code from competition. Binary-only software is no less piratable than source code, especially with so many architectural layers that can be replaced with rebranded wrappers. Profit measures the surplus value in the *relationship* between vendor and purchaser. So open source is no different from closed source software in its role in making money. If anything, open source is advantaged in improving the relationship, and in offering more opportunities for satisfaction, as well as reducing the costs of delivering that satisfaction - hence more profit.
    • Successful companies produce "profit" not necessarily "customer satisfaction". There are plenty of sucessful companies that produce a crappy product and have angry end users, but a company that makes everyone happy and doesnt collect a dime wouldn't be considered "sucessful" by many...
  • This is an industry where you can make money off OSS. Not just supporting OSS, but if you can develop a package of useful OSS apps and offer the to businesses too busy (or focused elsewhere) to implement & maintain themseleves, you can make a tidy living.

    For example, if you developed an easy-to-use & maintain (think GUI for the receptionist) Asterisk PBX, you could probably sell that into a lot of small businesses. Sell some maintenance on top of it and after a while you have a nice recurring rev
  • It isn't open source, but its free...and they are making beaucoup bucks giving it away!
  • I'm a CS major, but a professor in the Business college here wanted my help designing syllabi for an advanced website development course.

    I recommended we endorse the AMP (Apache/MySQL/PHP) platform over ASP.NET (which is what he had in mind), and his main reason for not taking that route was that "Apache is open source, and you can't make money with free products. Here in the business college, we're only interested in products that can make money."

    I promptly never spoke to the dumbfuck ever again.
  • by dfn5 ( 524972 ) on Wednesday March 09, 2005 @02:09PM (#11890864) Journal
    You could take the approach that TrollTech [trolltech.com] did and have 2 licenses. One license is an opensource one, in which you are free to use the product if your product is opensource. If your product is not opensource then you must purchase a commercial license. This is saying, if you are making money from my product then I can make money too. Seems to work for them.

    • But, the thing is, they're not making money off open-source software. They're making money off of the closed-source libraries they sell. It is indeed a cunning business strategy, but I don't think it fits the ideal picture of a free software world.

      Compare this to Red Hat, which has no closed-source stuff in their distributions, and is obviously making money hand over fist in comparison to TrollTech.

      -Erwos
  • The Apple Model (Score:3, Informative)

    by mgaiman ( 151782 ) on Wednesday March 09, 2005 @02:09PM (#11890875) Homepage
    Apple has been using Open Source and making money from it for a few years now. Their model is to have open source and freely available core components (Darwin, Webkit, etc) then build value on top of it and charge for that.

    I think we'll start to see this model adopted more and more.
  • Some companies need software, but don't make money by selling or supporting software. A company might need some tools that don't exist. If those tools are useful to other companies, and don't necessarily provide a competitive advantage, Open Sourcing it might be wise. For instance, if as a part of my business, I have to, for some reason, rip and tag a lot of CDs through a Web App, I will need some kind of plugin or applet that will allow my App to ask the user "Please Insert a CD". This might be a proje
  • by Solder Fumes ( 797270 ) on Wednesday March 09, 2005 @02:10PM (#11890901)
    Not that difficult, really. All you'd really need is The GIMP to modify serial numbers. Plus a good scanner, nice dye-sublimation printer, and the right paper.
  • Wrong question (Score:5, Insightful)

    by JimDabell ( 42870 ) on Wednesday March 09, 2005 @02:11PM (#11890910) Homepage

    'How company can make money, if its products are available for free?'

    Simple answer: it's extremely dificult to do so.

    The question you should be asking is 'How can a company make money, if it gives away software for free?', and the answer should be more obvious - it can do so if its product is not the software it's giving away.

    For instance, IBM's "product" is the tailor-made services and consultancy it provides. The software is merely a tool they use to provide it.

    You might argue that keeping such tools to yourself is a commercial advantage over your competitors. That's true to an extent, but there are also downsides - e.g. if you provide your own proprietary operating system instead, you don't get benefits contributed by the community, and your competitors are more attractive because there is no lock-in.

  • I do this now (Score:4, Insightful)

    by Safety Cap ( 253500 ) on Wednesday March 09, 2005 @02:13PM (#11890934) Homepage Journal
    I use OSS to augment and supplement my own code that I then sell to others.

    Recent examples include things like displaytag library [sourceforge.net], Hibernate [hibernate.org] and HTML Area [dynarch.com].

    Of course, this means I must take a wide berth around GPL'd code, but there is enough stuff under BSD/Apache/whatever to get the job done.

  • If your project lends itself to this method, you can distribute the source code for your software but charge for the media, like some games do... you're welcome to download the code and compile it, but you don't get all the maps, images, audio, etc.

    A more evil solution might be to GPL your program but distribute the code in such a way that it's difficult to compile, or needs proprietary tools, etc., thus discouraging homegrown solutions. Don't do this though.
  • The traditional approach is to sell a service instead of a product. Typically, the service is packaging or integration. This is what Redhat does. Customization work is also an option. JBoss tried to go this route.

    Another approach is to code a proprietary app that runs on Linux and sell the whole thing as a turn key network appliance. This is what Sun tried to do with their Cobolt server appliance.

    Another approach is to give away the "basic" version of the program and sell the "advanced" version. This

  • by jtwJGuevara ( 749094 ) on Wednesday March 09, 2005 @02:16PM (#11890975)
    http://www.sakaiproject.org/support.html [sakaiproject.org]

    In brief, the Sakai project was started by a few large institutions who were tired of buying into the licensing fees of other learning management system products like WebCT and Blackboard. They decided to create their own and make it open source - both free as in beer and speech. However, the support for Sakai comes at a price, albeit a much lower price than the aforementioned commercial products were offering.

    In the end, you recieve a completely open learning managment system created and maintained by developers at these institutions and supported by commercial interests.
  • Longtail vs. Lessig (Score:3, Interesting)

    by KrackHouse ( 628313 ) on Wednesday March 09, 2005 @02:16PM (#11890980) Homepage
    From The Longtail Blog [typepad.com]
    "What's changed is the presumption that the primary rights-holder is the best at extracting the commercial potential of creative material. Instead, anyone can do it: the advertising company that remixes an old movie to sell a car; the Linux t-shirt done Warhol-style, or just plain old DJ magic. "

    "Let them eat cake" Well now that cake is actually free and we all want to sell it. Now if you can put a custom birthday signature on that cake you might have a business. This is one of the reasons film school is starting to see a new wave of interest. Communication and creativity, not business processes, are going to be the only things left after the so called Web2.0 is done modernizing commerce.
  • I work at a Civil Engineering firm. We do Civil engineering projects of various sizes. To do all our drafting, we use AutoCAD. We currently run AutoCAD 2005, which runs like $2-3000 a copy.

    I work in a small company, so we don't do any real training for new versions. For example, we were using version 2000 of AutoCAD until about November of last year. We we upgraded, the new changes in software were left up to us (mostly me) to discover and incorporate into making the job easier. Now this wasn't so hard, si
  • Some Resources (Score:5, Informative)

    by dexterpexter ( 733748 ) on Wednesday March 09, 2005 @02:21PM (#11891051) Journal
    Using Google search terms "make money using open source" [google.com], I came up with the following:

    -101 Ways to Make Money off Open Source [manageability.org]
    -How to make money with Open Source Software [lathi.net]
    -Making an open source living [builderau.com.au]
    -eWeek:How to Make Money Off Open Source [eweek.com]

    I am not intending to be snitty in suggesting that you search Google; there were tons of other seemingly-good resources contained within it, and it might just be a case of different search terms. You might be able to team the information gained there with the advice of people here.

    Also, if you can gain access to the class papers from the Boston Embedded Systems conference, particularly those from Bill Gatliff in 2003, there were tons of developers there who lectured on this very thing, citing examples and explaining the ins and outs of open-source licensing. I thought Bill Gatliff did an excellent job, and you may be able to contact him through his website for some resources.
  • 'How company can make money, if its products are available for free?'

    Is your co-worker named Oog? If he is, tell him Frylock wants his computer back, ok?

  • by grumbel ( 592662 ) <grumbel+slashdot@gmail.com> on Wednesday March 09, 2005 @02:25PM (#11891117) Homepage
    The answer to the question how OpenSource business models work is that they don't. If you today are making money by selling boxes with your software going OpenSource will sooner or later make you go bankrupt.

    The reason why OpenSource works for Redhat and SuSE is because they don't write much OpenSource, the community does, they just pick the whole work of other, package it nicly, write some installer programms, fix some remaining bugs and then sell it. If there wouldn't be a large community to actually write the software they wouldn't have much of a chance, since there wouldn't be much that they could package. Supporting their products is another source for there income, for which their OpenSource activity is of course a great way to advertise it.

    So if you expect to write original OpenSource software and expect to get a large return from it, you can basically forget it. If everybody can download your software for free you won't stand much of a chance to sell it. If you however sell a service and not a piece of software there is a good chance that OpenSource won't hurt you, since people will still buy your service. There are also models which work by releasing older versions as OpenSource and selling the current version as close source.

    Overall making money by writing OpenSource doesn't work, what works however is using OpenSource as advertisment to services you sell. However selling services doesn't work for all kinds of software, so if your software doesn't require much service around it, you are out of luck. If you want to make money with your software there are probally better ways then OpenSource, you should see OpenSource as a way to ensure the users freedom, not to ensure yourself a larger income.

  • (1) Some software that comes with a fixed price, or a fixed recurring licence fee, with support included?

    (2) Some software that's free, but, uh, you can probably find someone to support it if you pay them, but, uh, they haven't quite sussed out their business model yet, so they don't really know how much to charge, or whether they'll still be in business towards the end of your planned eight year life for this system?

    Now, let's see. Fixed price means software quality is as high as they can get it, because
  • First, go read "In the Beginning was the Command Line". It's got some great insights about the software business.

    Now, about making money.

    1. Do like the Sveasoft guy: package some open source stuff together into a value-add. He ges paid for doing the integration work.

    2. Offer services around open source. Get pai for helping people install and run their software.

  • I think that's difficult to make money
    from OSS, I think a better question is "how can I make money with OSS".
    In other words, if your goal is to make money, then perhaps the best question to make is, how can you use OSS as a way to supplement your business model.
    Think of how OSS can be used to make a business operate more efficiently and at a lower cost.
    If your main business isn't IT related, then just appy this to your own business.
    If your job is IT, then think about how you can appy this to your clie
  • by lullabud ( 679893 ) on Wednesday March 09, 2005 @02:29PM (#11891158)
    There are other businesses where some parts of the theory behind OSS make them money.

    I pay plenty of bar tenders to make me "Open-source" drinks that I know damn well how to make on my own because I'm just no good at it or I don't want to take the time to go to the store or I'm too tired to make it etc. etc..

    People pay for hamburgers at restaurants all the time, even though even little kids know what goes in them, because they don't want to go to the store and buy all the stuff and they don't have the tools to prepare it or the skill to do it well. They just want to eat. It's a matter of convenience and skill and action.

    You just have to choose the right market. When a bar tender is behind the bar she doesn't pay another bar tender to make her a drink that they both know how to make, but after her shift is over and she's dead tired, relaxing on the other side of the bar she will. Likewise, you probably won't be able to sell your OSS products to people who make their own OSS products. You sell them to people who need solutions to problems that you can provide using tried and true OSS code. To sound really cliche, if you're selling OSS stuff you're a "solutions provider" and your solution just happens to involve free software, but businesses will still pay you to solve their problems because you are doing work, your tools are just free.
  • This has been bothering me for a while. I found out about "the movement"(tm) a year ago and love F/OSS. I am in college right now, and me and some friends are beginning to work on our first video game. I want to release the game online and sell it with the shareware business model that made Doom so popular. The problem is... that we want to make it open source, and give our customers the freedoms they deserve with it, but we also want to get paid for our work. You can't exactly make money off doing tech sup
  • The really successfull open source applications (linux kernel, apache) exist in te same way that unix existed before the litigation started: simply share code and make a robust public infrastructure that everyone can use. IBM and others dedicate well paid people to developing platforms such as linux much like some trucking company might want to throw resources at improving public roads.

    The motivation of open software isn't profit, that's not to say it isnt possible to make good money packaging and support

  • 'How company can make money, if its products are available for free?' That was a valid question indeed,

    Only if Yoda were the one asking the question.

  • I find it kind of odd that people who are thinking about trying Open Source care whether the vendor is making money. If you could buy a car below dealer cost, would you ask questions, or just buy the car? As long as you can get support for the product, it doesn't matter whether the vendor is making money or not. I don't know if it's just out of curiosity that they ask the question, or if they're trying to make sure that they're not buying into a dead-end product. But we should really be asking why Microsoft
  • On a similar topic... I always wondered if there was a license which would let me write open source software with a condition that the software can be freely compiled on any operating system which itself was open source.

    All other operating systems would require binary version to be purchased, and it would be against the license to compile the software for those operating systems. Yeah it's not totally open, and sets conditions, but in some ways I think not only could it help fund the developers, it could h

  • Just have a talk with Gator..eh, Claria..

    Ohwait...

  • by Per Abrahamsen ( 1397 ) on Wednesday March 09, 2005 @03:00PM (#11891557) Homepage
    I, like most programmers, am paid for the time I spend developing the code, not for the code itself. The code is free, my time isn't. And if you don't pay for time, the code will not be developed.

    This work fine when there is a limited number of users, which is the case for far the most software.

    It actually also works for some software with more users. GCC developemnt is largely funded by people who hire one of the GCC development companies (there are several) to improve some aspact of GCC that is important to that customer.
  • by Orion Blastar ( 457579 ) <orionblastar AT gmail DOT com> on Wednesday March 09, 2005 @03:02PM (#11891597) Homepage Journal
    A hint, you won't make the money by giving it away. The free software will be a marketing ploy to gain publicity. You need to sell a product or service that the OSS is somehow tied to.

    For example, Red Hat has Fedora as a free Linux OS. If someone wants tech support for Fedroa, they can pay Red Hat for it. If they want a more advanced server version, they can pay for it.

    Some projects are based on OSS, but sold commercially, like Linspire, WineX, Crossover Office, etc. The OSS license can be released into a commercial license, in that the OSS developers make their money in selling licenses to release their OSS code into commercial products.
  • by Money for Nothin' ( 754763 ) on Wednesday March 09, 2005 @03:08PM (#11891668)
    Repeat after me: open-source software is not a business model, it is a softare development model.

    The blunt fact is that in IT, there are really 2 classes of people: users, and developers. This is fully analogous to any other industry, where you have a consumer (users) and a producer (developers).

    The users -- everybody from sysadmins and netadmins, on down to the secretary using her Office apps -- do not write code. They do not contribute anything beyond bug reports to OSS. Hence, their personal stake in the price of software is simply to get the cheapest software that will do the job. Given that OSS is free as in beer, users will naturally gravitate towards it and promote it. Just as in college, where there is free beer, there are students lined up around the block to get a drink.

    Then there are developers -- the software engineers and programmers. They *do* write code; that is their job. They contribute more than bug reports to OSS; they contribute the very code that is required to build the apps that the users use. The trouble for developers is that OSS, by not charging a fee for the time spent developing, makes the value of developers' time equal $0. Time = money, and if money = $, then time = $0 as well.

    When applied as a business model, that is how OSS works; there is no escaping this fundamental economic analysis. You cannot very long sell a product at a non-zero monetary sum that which one can get at zero monetary cost to themselves.

    Thus, the only way OSS can survive in the business environment is if the developers are working for a company which has some other revenue stream then -- be it support services for the code they write if they are a software company, be it some other service if it is a non-software service business (e.g. a marketing firm, law firm, etc.), or be it some tangible, physical good (e.g. in any hardware company, car manufacturer, grocer, etc.).

    It's an opportunity for creativity in business models to try and incorporate OSS into their business functionality, but from the developer's perspective, it's important to recognize this fact: because you are writing software which is being given away for free, your work is not directly making money for the company. Because your work is not directly making money for the company, you will be seen as "dead weight" in the company. Because you are seen as dead weight, you will have a hard time justifying your employment with management unless you can determine, clearly, how your work saved time somebody else in the company, or how your work drew in more customers for the company, or how your work generated more service contracts, and so forth. If you cannot do that -- and this will be difficult (though not impossible), given that you don't work in those departments -- you face job loss.

    Hence, it is generally in the best interest of developers not to write OSS. OSS coders are literally coding their way out of their own jobs.

    But all of the above largely assumes software is normally otherwise a product sold to people on store shelves, when in fact, most people already write code for internal use only anyway. What about those people?

    OSS is still a negative to developers in most companies, because, after all, if you are writing code that would normally be for use within your company, that is potentially a competitive advantage for your company. But if you're giving away that code, you're giving away that advantage for other companies - other competitors - to use. This is good neither for the developer, nor the company paying the developer who released the code as OSS. After all, if you employ developers who just spent 6 months writing control software for, say, a large manufacturing company, why should the company release that software to the public? So that their competitors can go out and buy the same hardware, leverage this software they did not develop (and have no intention of contributing back to), and produce the same or very simi
  • by dist_morph ( 692571 ) on Wednesday March 09, 2005 @03:32PM (#11891977)
    Trying to make a living from support eventually creates applications like WebSphere or Oracle or SAP. When the money is in selling help, you need to demonstrate that the users need help, otherwise they won't renew support.

    We've had this problem, so I'm not speaking theoretically. Most of our users bought support with the purchase of our commercial product, but after one year many of them didn't want to renew because they hadn't had any problems and didn't know what they were paying for.

    A business plan that is based on support is at direct cross purposes with creating high-quality, easy-to-use software.

  • The case of LaTeX (Score:5, Interesting)

    by miep ( 85391 ) on Wednesday March 09, 2005 @03:34PM (#11891995)
    The case of everyones favorite macro package for everyones favorite document typesetting system, LaTeX, might be most convincing for the stance that sometimes it's better to sell support than to sell software. From an interview with the author of LaTeX, Leslie Lamport:

    "GMZ: Was this always meant to be free software ? Did you ever try to "get rich" with it? Do you regret that you didn't?
    LL: At the time, it never really occurred to me that people would pay money for software. I certainly didn't think that people would pay money for a book about software. Fortunately, Peter Gordon at Addison-Wesley convinced me to turn the LaTeX manual into a book. In retrospect, I think I made more money by giving the software away and selling the book than I would have by trying to sell the software. I don't think TeX and LaTeX would have become popular had they not been free. Indeed, I think most users would have been happier with Scribe. Had Scribe been free and had it continued to be supported, I suspect it would have won out over TeX. On the other hand, I think it would have been supplanted more quickly by Word than TeX has been." (From TUGboat 22 (2001) [tug.org]

    Just a very succesful case of money made out of free/open source software that is often overlooked (and maybe one of the oldest cases as well!)

  • by RichMan ( 8097 ) on Wednesday March 09, 2005 @04:25PM (#11892741)
    Paths to make money of OSS

    1) Support. Provide support for the software. Fixing or adapting it to the customers requirements for money.

    2) Installation. Really a subset of support. Will install and train in the usage of OSS for money.

    3) Add/Create OSS for money. They customer wants something. You will code it.
  • by Esion Modnar ( 632431 ) on Wednesday March 09, 2005 @04:57PM (#11893207)
    How company can make money, if its products are available for free?

    Volume.

  • The Magic Cauldron (Score:3, Interesting)

    by Guillermito ( 187510 ) on Wednesday March 09, 2005 @06:03PM (#11893968) Homepage
    The obvious answer to the question posted is the well known essay "The Magic Cauldron"

    http://www.catb.org/~esr/writings/magic-cauldron /

    I can't believe nobody mentioned it before. (Yes! I actually checked it, so if someone did mention it, then Slashdot search sucks!)
  • by pjt48108 ( 321212 ) <mr.paul.j.taylor@NoSPam.gmail.com> on Wednesday March 09, 2005 @07:51PM (#11895042)
    I find making money with open-source to be a pretty straight-forward process. My only trouble has been with the TWAIN drivers I needed to scan the individual bills before I printed more.

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