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The Almighty Buck

Earning Money with Open Source Software? 279

Posted by Soulskill
from the sweat-of-my-brow dept.
An anonymous reader writes "I've been working on a financial application which I've decided to release to the public. I want to make some money from the application, though I certainly don't expect to become a millionaire. The problem is that I'd like nothing better than to open-source it. There are many aspects of the application that I don't have time to refine, and other developers could definitely improve upon my work. However, I don't know how I earn money from something once I've made it open source. How have you dealt with trying to turn a reasonable profit on your work while remaining open-sourced?"
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Earning Money with Open Source Software?

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  • Are you new here? (Score:5, Insightful)

    by jawtheshark (198669) * <slashdot@nospam.jawtheshark.com> on Sunday January 13, 2008 @01:09PM (#22026502) Homepage Journal

    FSF view on selling software [gnu.org]

    Also: Software as a service

    Finally, there is also consultancy for your own project. You need help installing it? You want a feature? Hand over the cash!

    No, I haven't done it. Mainly because I'd rather not be my own boss. The payoff is high, but so are the risks. I'd rather be a wage-slave and let my boss bear the risks.

    • by ShieldW0lf (601553) on Sunday January 13, 2008 @01:34PM (#22026746) Journal
      Free software is by and for people who are scratching their own itch.

      Your question could be reduced to "I've invented a new hammer that works much better than old ones, but anyone can make a hammer just like it. How am I going to make money off my hammer?"

      The answer is simple. USE your new hammer to build things instead of calling a halt to your problem solving career and trying to open a hammer store.

      • Re: (Score:3, Insightful)

        by thejam (655457)

        The answer is simple. USE your new hammer to build things instead of calling a halt to your problem solving career and trying to open a hammer store.

        Are not these "things" to be built with this hammer themselves potentially hammers for still other things? Re-applying your argument, potential-hammers shouldn't generate revenue either (or at least their potential hammerness should not generate revenue). So it's primarily the things one makes that aren't themselves useful (by having a hammerness property) that generate revunue, i.e., one should be paid to create useless things!

        Gotta admit that's a pretty fair assessment of the appeal of most consumer go

        • by ShieldW0lf (601553) on Sunday January 13, 2008 @02:43PM (#22027346) Journal
          You get enticed to solve problems, not invent tools. Money is enticement.

          If you can't find a single person out there who has a problem that needs solving and involves your new tool, your new tool is useless.

          A tool is a means to achieve a goal, not a goal in itself. If there is no goal at the end of the train, then yes, your whole pyramid is built of meaningless crap.

          Being that this is finances he's talking about, all of it is meaningless. The value of financial software is in how close to zero you can bring the time you spend working on it, because it's all administrative overhead and no productivity whatsoever.

          Financial stuff gets stale fast as laws change, so I might suggest something along the lines of:

          1) Give it away, and sell its advantages strongly far and wide
          2) Make it update itself to the suit the latest legal/financial environment from central servers with new data, but only for paying customers
          3) Create a business model around being "The guys who watch the laws and make sure our software still suits them."

          In other words, don't trap them, empower them, and make money dealing with the ongoing bullshit that's closer to your skill set than their own.
          • Re:Are you new here? (Score:5, Informative)

            by electroniceric (468976) on Sunday January 13, 2008 @03:32PM (#22027724)
            I think this is generally good advice. I would add to this that in terms of building a business around the software you've created, your licensing decision comes much later than many others. The principal assessment your business plan needs to make is: what need am I meeting? How can what I have or can create be traded to people in such a way as to meet that need? In other words, what's your market and product position? From that you can make determinations such as whether to sell your domain knowledge embodied in a package (which as the parent wisely points may put you at risk of having stale specifics embedded), you can sell it as consulting, you can sell it as a service, etc. None of us here on /. (except those who happen to have experience with product positioning in finance) are particularly well qualified to answer that question. You yourself may not be that well qualified to answer that question, since software engineers are often not that conversant with marketing strategy and techniques. So I'd say your first step towards making some money off that effort is to figure out the question of how to line your work up with what the market wants and can make use of.

            Many here have noted that using OSS as a credibility-building towards consultancy or employment based around your domain knowledge is a common strategy. From observation (but not really personal experience) it is probably the one with the greatest likelihood of success - don't ever underestimate how useful it is to have somebody who knows the domain involved in non-business project roles such a software developer - and a clear history of building a useful piece of domain software is an excellent way to indicate that you know what the domain's issues are and can find ways to make useful solutions for them. The other methods (SaaS, package -OSS or otherwise, etc) offer the sometimes-enjoyable (and always-exhausting) possibilities of entrepreneurship - if that's your cup of tea, I'd seek out people who can complement your knowledge (not to harp on what I said above, but number one among these is a product placement person) in building a product or service around your efforts.

            There are downsides to releasing your software as OSS - it can be forked or incoporated by those who already have products in the space, and unfortunately if the release itself is not carefully done, it can make you and your product look very amateur. If I happen to find a set of potentially cool domain libraries on sourceforge with no evidence of community interaction, no product description and no documentation, you can bet I'll move right along to the next product. To repeat what others have said, if you do opt for some sort of OSS-esque release, make sure to focus your efforts on community-building rather than just technical excellence: documentation, response to users/developers of your stuff, getting genuine domain users interested, etc. Or, if you want to focus on the technical parts, try to recruit someone else to do that stuff. Just remember that the community-building is what raises the profile of your software and thus your domain knowledge and skills, not really some badass recursion scheme.

            Hope some of that helps.
          • by Anonymous Coward on Sunday January 13, 2008 @06:17PM (#22029076)
            If there is no goal at the end of the train, then yes, your whole pyramid is built of meaningless crap.

            And then the whole stack of dominoes will collapse like a house of cards. Checkmate!
      • Re: (Score:3, Interesting)

        by Hognoxious (631665)

        Free software is by and for people who are scratching their own itch.

        What's that supposed to mean? Am I not allowed to use Apache because I never felt the urge to create my own webserver? That wouldn't be very free-as-in-speech now, would it?

        It's a nice soundbite, I'll give you that. The moderators clearly liked it.

        USE your new hammer to build things instead of calling a halt to your problem solving career and trying to open a hammer store.

        Why? Do hammer makers make good carpenters? Are violin maker

    • by riseoftheindividual (1214958) on Sunday January 13, 2008 @01:37PM (#22026776) Homepage
      Some other possibilities to add to those:

      Produce a printed manual sell it from the main site.

      Produce a lightweight but useful book and go into the software from more of a practical application standpoint than your standard manual/documentation, and sell it either dead tree or ebook format on the main site.

      Ads on the main site.

      Get a nice catchy logo for your project and arrange to sell logo'd tees, coffee mugs, etc... on your site. There are sites out there that will let you do this with little to no capital up front.

      This one will be controversial here, but hey futz it... talk to some Indian support firms and see about possibly hiring them to offer support, which you then sell from the main site of the application, where you will serve as "level 2" tech support.

      Most important of all, if you decide to do any of this, just freaking do it. Don't second guess yourself once you've decided. Move forward in total confidence, daily feeling/envisioning your goals attained.
      • A manual is a GREAT idea. Really good documentation is something I've paid for in an open source project, since it seems that many projects lack great (or good or ANY) documentation or the people willing to do such documentation.

        The original developer of the code is in a great position to do so.

        Good suggestion.
        • Re:Are you new here? (Score:5, Interesting)

          by ShieldW0lf (601553) on Sunday January 13, 2008 @03:23PM (#22027642) Journal
          A general manual that you sell isn't the best idea, because it relies on the copyright enforcers to create revenue after the work is done.

          A better idea would be to approach large groups and get paid in advance to help them write tightly focused internal use manuals.

          The #1 rule to making money, which everyone in the IT sector seems to forget, is this:

          Demand payment upfront.
    • by innerweb (721995) on Monday January 14, 2008 @08:35AM (#22033648)

      I'd rather be a wage-slave and let my boss bear the risks.

      I have always loved that illusion. What do you think happens to the people who work for a company that tanks (think Enron, Xerox, Auto-Manufacturers)? Their jobs and financial futures are not guaranteed. The truth is that we all shoulder some of the risk. The people at the top do not necessarily have more risk (and in fact most often, they have less).

      InnerWeb

  • by ehack (115197) on Sunday January 13, 2008 @01:10PM (#22026506) Journal
    I think that OSS doesn't make money as software for an individual, but it allows him or her to increase his or her visibility.
    • I think that OSS doesn't make money as software for an individual, but it allows him or her to increase his or her visibility.
      Ok, I don't think that you are looking at a sure fire solution here. I agree with the parent but he beat me to it so I'll post this as a reply.

      For whatever reason, people often assume a false dichotomy between open sourcing code and making money. This isn't the case. A simple example of this is the ability to donate to any project on sourceforge. So a simple effortless option is to sign on to SourceForge [sourceforge.net], register your project and make yourself the sole dev. Then you just need to sit back and wait for all those donations to roll in!

      Likely source of income? Not really.

      So let me tell you something that happened to me. I had, in one of my classes, built an interface to GOCR (not Jack Black's band but the Gnu Optical Character Recognition project). This was a while ago. It was in C and it was shitty. I mean really shitty. I didn't even open source it. The teacher liked it though, maybe she still uses it, I don't know. Whoop de doo, right? I made a GUI to a command line tool.

      Fast forward 2 years. I'm out of college and it's a bad market for developers. I show up for an interview with a company I had no idea was even into software. I show up in khakis and a button down shirt. Everyone else is in double breasted suits. I figure I'm screwed. But when I get into the interview, we started talking about open source and--wouldn't you know it--GOCR! The woman who interviewed me had used it on a project and started complaining about the command line. So I told her what I had done and talked about the algorithms and how it recognizes characters. I told her why my interface was so crappy. I got the job and I've been working there three years--they even allow me to do crazy research stuff at work!

      Did I directly make money working on open source? No. But I think I got the job just on that conversation. I kinda wished I had checked in that interface as I'm sure it's lost somewhere on the university network now. What if she had actually used it?

      I suggest you open source it, work with others to make it better, give it time to propagate. Then submit your resume to any place you want and list it on there. If you've made the Firefox of financial apps or prove you really understand how to design financial software, there's a lot of places you could go.
      • by hjf (703092)
        same here. when I was taking the CCNA classes, I talked to everyone. they were a bunch of noobs really, so everyone was surprised when I talked about my adventures with Linux and networking. Couple of months later, I was setting up a rural WISP and sold support to them for 2 years. Now I support 2 more WISPs and I get enough money, not enough to live of course, but more than enough to buy gadgets and such. If I needed the money, I'm sure I could get more with a little creativity.
      • by Bert64 (520050)
        Similar story for me, i publish a number of tools which people in my field use... As a consequence, for the last few technical interviews i've been to the guy interviewing me has heard of or even used one or more of my tools, and is often familiar with the websites i run or contributed to that publish such tools.
      • by LingNoi (1066278)
        Same thing happened to me. I had no commerical experience. The only reason I got hired was because I had an open source project that proved I could do the job.
        • Re: (Score:2, Insightful)

          by sticks_us (150624)
          These comments remind me of some of the things said in another slashdot article [slashdot.org] on recognizing good programmers.

          I hired a dude a couple of years ago who, like you, didn't have a lot of experience.

          He did, however, have a very impressive FOSS portfolio, and could show all kinds of code he wrote in support of various projects. This involvement suggested that:

          0) He cared enough, as a developer, to get involved and donate his time and effort to a project, and
          1) He saw his contribution as one to the "greater g
      • by symbolic (11752)
        I've done something similar - not necessarily because I wanted to make money from it, but because I truly have a passion for learning this stuff, working with it, and creating (hopefully useful) stuff with it.
      • by p0tat03 (985078)
        I'll corroborate parent's post. As a college student there's really no better way to look good than to contribute to open source, which may be a selfish reason to participate, but eh. I contributed some code a while back to phpBB, and did some mods on it that weren't ever in the trunk, but were released for free. Lo and behold that impressed an interviewer and landed me a pretty sweet internship. Honestly speaking, though, contributing to FOSS projects at least keeps you sharp, and gives you something to ta
  • by ccguy (1116865) * on Sunday January 13, 2008 @01:10PM (#22026514) Homepage
    Learn from the ones that have succeeded, such as mysql or zend.

    I'd suggest you start a company, as you are more likely to be taken seriously by possible clients. And become 'the' company to go for support, customization, etc.
    There must be products who have succeeded as a one man show but honestly I can't think of any.

    Also, drop the 'I don't have time to refine' attitude. If you want to make money, you have time to do whatever your clients require, unless you just feel it's wrong for your product and refuse to do it altogether.

    In short, if you really want to make money, your priorities have to be the ones of your clients', unless you are confident that what you feel like doing today is what someone else will feel like buying tomorrow.

    By the way, is anyone using it already?
    • Re: (Score:2, Interesting)

      by AlecLyons (767385)
      MySQL AB, Zend, Redhat and so on are all very different entities from an individual trying to make a part time second income off a personal software project. So do you think the only way to make a direct cash return on a personal open source project is by giving over to it full time?
    • I've been working on a financial application ...
      Yes, or he could learn from movies like Office Space and Superman 3 and edit the software so that it moves the fractions of cents lost in transactions to an unnamed bank account.

      Also, drop the 'But they'll send me to Federal pound me in the ass prison' attitude.
    • Wayne Gould & Pappocom.

      "A retired Hong Kong judge who spent several years programming a puzzle he couldn't live without".

      He waltzed into a newspaper office with just his laptop, and being at the right place at the right time, single handedly boosted Sudoku.

    • Re: (Score:3, Interesting)

      by Falstius (963333)

      drop the 'I don't have time to refine' attitude. If you want to make money, you have time to do whatever your clients require
      Exactly. No company is going to use a non-trivial financial application without the ability to pay for support. That said, you don't have to do this full time either. My dad is a tax preparer, handyman and part time programmer. All of his clients have access to his code and pay him because he can make the changes they need quickly.
  • by bihoy (100694) * on Sunday January 13, 2008 @01:14PM (#22026562)
    From my experience, the best means of leveraging Open Source Software would be using the Saas [wikipedia.org] model. Usinng the Saas model there often are additional opportunities for income such as advertising or other tie ins.
    The alternative approach seems to be in providing extended support serivces for the software as does Redhat.
    • My experience in the field tells me one should get a paying job instead of providing "customer" services. Business customers are nut and they will only drive you crazy with their stupid and unreasonable demands.
  • by sakdoctor (1087155) on Sunday January 13, 2008 @01:15PM (#22026568) Homepage
    Sell T-shirts and mugs.

    Oh wait, that's musicians.
  • by Damocles the Elder (1133333) on Sunday January 13, 2008 @01:15PM (#22026570)
    If you don't have time, or you're just too lazy, to continue to add updates, and you want to make a quick buck off of it, don't OS it. It's that simple. OSS companies tend to sell support, and possibly custom-tailored upgrades.

    If you think it'll be mildly popular, and you really want to OS it, throw up a paypal donation link. You may not get as much, but you'll be staying true to your scruples.

    Your choice.
    • Some people make money from OSS through service, but not all software lends itself to that model.

      I wonder how successful those paypal links are? I've asked a few people with these on their sites and they all said that it brings in very small amounts. Hopefully, with time, people will begin to pay for what they value rather than just paying because they have to.

      In the OSS software I write (used by many of the bigger names out there) I've received very little in the form of donations (but thanks to those that

  • Easy! (Score:4, Funny)

    by UbuntuDupe (970646) * on Sunday January 13, 2008 @01:16PM (#22026590) Journal
    Easy! Just follow the ESR method:

    1) Wish *really hard* that some way exists.

    2) Compare proprietary software to the Holocaust.

    3) Insist that it's feasible to subsist on money from writing software if you don't have a mortgage or kids and camp/forage at MIT.
  • by sauge (930823) on Sunday January 13, 2008 @01:18PM (#22026608)
    There are a lot of podcasts on making money with open source here:

    http://itc.conversationsnetwork.org/index.html [conversationsnetwork.org]

    You may need to look around a little.

    I have made money indirectly from open source. Basically I through it out there and some people picked it up. When they needed other projects worked on I was contacted.

    Documentation is more important than code I can tell you that much. Installation documentation, user documentation and most importantly programmer documentation.
  • by superwiz (655733) on Sunday January 13, 2008 @01:18PM (#22026612) Journal
    and then provide the basic-feature part of the service with ad-supported revenue while charging for custom in-house solutions. After making in-house solutions and getting paid for them, release the software open source. They paid you to write the solutions -- not to own them. This way the project goals will be set by customers (and necessity is the mother of invention) and at the same time the software will remain available to those who want to tweak it.
  • Sell the .EXE files (Score:5, Interesting)

    by Marcion (876801) on Sunday January 13, 2008 @01:19PM (#22026624) Homepage Journal
    I can't tell from TFA whether the "financial application" is a server or desktop application. Assuming it is a desktop application then I would point out that open source code does not have to mean open binaries.

    Try to separate your markets. If you give it free to people who would not buy it anyway, then your increase your visibility and your network effect. You might also get some patches back.

    So put the source code online, maybe even try to get it in the Linux distributions for more visibility.

    However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it. If they do compile it anyway then their time is worth less than $20 so they could not have afforded it anyway.
    • by steve_thatguy (690298) on Sunday January 13, 2008 @01:50PM (#22026876)

      This is actually exactly what I was going to suggest. People running Linux are often either programmers themselves or interested in free/open source software. People running Mac OS and Windows, however, are obviously willing to trade money for the convenience of a point-and-click installer.

      There's another option depending on how well you've defined a core/UI split--open-source the core engine, but charge for the GUI (or possibly for a web interface).

    • Re: (Score:3, Interesting)

      by kailoran (887304)
      I wonder how long it would take for someone to set up a "$YOURAPP Windows Installers" site with, you know, the source along with compiled executables. And how long till that site is better known, higher in google and generating more ad revenue.

      Of course you might try to prevent that with some sort of legal stuff, like using some form of General Ripoff License insted of GPL, that would disallow the distribution of executables. But then you might as well keep the thing closed source.
      • by Marcion (876801)
        Well you can't really stop people putting on pirate bay either. However, people who are willing to pay will pay, and those that are not willing to pay will not.

        If you are a business and you are buying the application then you will be happy to get it from the original author.

        > And how long till that site is better known, higher in google and generating more ad revenue.

        I really don't think it will be. It will be some corner that only people with lots of time will find, these people will not have bought it
      • by Marcion (876801)
        long it would take for someone to set up a "$YOURAPP Windows Installers" site

        Do you know how long it takes to make Windows installers for software, I mean it is very boring work, that is why a lot of open source has no Windows installers. Open Source software usually requires packaging up lots of dependencies into a single EXE. Unless you are really hot, we are talking like a whole day's work for a simple application.
    • by homer_s (799572) on Sunday January 13, 2008 @01:51PM (#22026894)
      However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it. If they do compile it anyway then their time is worth less than $20 so they could not have afforded it anyway.

      But won't someone just compile it and then give the .EXE for free? Some people might still buy it from him since it is the 'official EXE', but many of them would just get the free EXE.
    • by Bert64 (520050)
      Or if it's a server based app, rent access to hosted instances of the app...
      Or sell appliances which come with the app already configured...

      Selling the binaries won't help much, as someone else will compile it and make the binaries available. But you can make supported versions available for a price, and include priority telephone/email support with a guaranteed response time. Support which guarantees the ability to speak to the original developer if necessary is a good service.
      Also charge for implementing
      • by Marcion (876801)
        someone else will compile it and make the binaries available

        That doesn't matter. People make copies of Microsoft Office available from other channels (e.g. pirate bay), however others still buy it.

        People who are willing to buy it, including those that have work's expenses account, will buy it.

        For the people who are not willing to buy it, they will never buy it, so let them have it free and get more exposure.

        This strategy is not much than a donations strategy, but if I have my work's credit card, I can't pay
    • Re: (Score:3, Insightful)

      by YrWrstNtmr (564987)
      However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it.

      For a financial app, presumably something to run my company on, $20 is laughable. I'd rather a free open source supported app, or a hugely expensive supported app than some BS in the middle for $20. Seriously.

      For a minor plugin for Paintshop Pro or Photoshop, $20 is fine. For the life and reputation of my company, $20 feels like you don't think highly enough of your own pr
    • by MikeFM (12491)
      Even if binaries are available a lot of people will pay just to get the program on a cd with some documentation and basic support.
    • by ZorbaTHut (126196)
      X-Chat does this.

      X-Chat is a very good IRC program. I use it on Windows. I was looking for an open-source chat program, I found X-Chat, and decided I liked it.

      I didn't like their philosophy. They claimed that making a Windows build was "hard" somehow, but anyone who knows anything about programming knows that once you have the dev environment set up properly, making a new build is a matter of minutes. They'd obviously set up the dev environment properly, so why were they charging money for the Windows versi
  • by k.a.f. (168896) on Sunday January 13, 2008 @01:24PM (#22026664)
    I want to make some money from the application, though I
    certainly don't expect to become a millionaire. The problem is that
    I'd like nothing better than to open-source it. There are many
    aspects of the application that I don't have time to refine
    , and
    other developers could definitely improve upon my work.


    Wow, blatant self-contradiction within three sentences! If the application
    makes you money, then by definition, you can afford some time to work on it.
    • by sumdumass (711423)
      Maybe the problem is that refinements need to be made before he can make money from it but doesn't want to loose the opportunity to make money for the work already done.

      Remember, he said he wants to make money from it, not that he is making money from it?
  • by Yahma (1004476) on Sunday January 13, 2008 @01:25PM (#22026686) Journal

    I'm the author of LiarLiar [sf.net], an open source Voice Stress detector. Over the years, I've had several offers from various individuals and companies to further develop or improve upon the software. If you develop software that has enough demand, you may be able to offer support services for your software. Don't expect to get rich, or even be able to make a living for that matter.

    The most important thing to keep in mind is, make sure you have a backup source of income. Either a job or something else, as it is unlikely that you will be able to make enough supporting an open source project, unless it becomes very popular.

  • by Anonymous Coward on Sunday January 13, 2008 @01:27PM (#22026696)
    We've done quite well with open sourcing our antispam product http://firetrust.com/en/products/oss/mailwasher-server [firetrust.com] by giving away the main product and selling a value added service on top of it - this being an enhanced spam filter service we run.

    I think the giving away something for free and selling a few enhancements is probably the easiest way to make money, much more so than consulting and support which directly takes up your time.

    Nick
  • by Qbertino (265505) on Sunday January 13, 2008 @01:34PM (#22026742)
    Wether your software is OSS or not hardly matters anything - unless it's a small desktop app or something. Marketing otoh is key. If your software is ready for market and you have a working developement pipeline up and running be sure to prepare professional branding of your software and it's future community before hand. All successfull OSS projects have solid marketing, good looking websites and are generally attractive to work with and give money to. I'd also not underestimate donations and sponsorships.
  • by Anonymous Coward
    I'm by no means a rich person, but I've landed my career [ideal job] because the people who hired me were already avid users of the software I give out for free.

    Basically, it works along the lines of market. If what you're doing is useful, well done, and people need it, you'll be rewarded. With money, praise, attention, a job, who knows. If what you're doing is not useful (e.g. what 99% of script monkey developers do) you'll scrape by and be largely unrewarded.

    Just because you can make something compile
  • You sell OSS the same way you sell to anyone else: you sell to people who want to buy because they value what you offer.

    There's not necessarily a lot of overlap between people who need financial software and people who know how to build and validate software that they downloaded from the net. Those people value software that works out-of-the-box. Give it to them and charge them for it. There's also not a lot of overlap between people who treat their money as if it were important and people who entrust t
  • There are many aspects of the application that I don't have time to refine
    ...
    However, I don't know how I earn money from something once I've made it open source.

    Short answer: You don't.

    Longer answer - You've written a pair of contradictory statements there. Making money from FOSS requires you to stop thinking of the program (whether executable or source) as a final product to sell.

    You need to view the program as a hook. People use it and either want support or more features, and they pay you fo
    • Re: (Score:3, Insightful)

      by TheRaven64 (641858)
      Exactly right. The off-the-shelf commercial software and Free Software are diametrically opposed. This is why Microsoft is threatened by Free Software, but IBM is not. People don't pay money for Free Software, they pay for people to write Free Software.

      Without knowing more about this program, I can't give very specific advice since the best exploitation route depends a lot on the target market. Talking to other people who write financial applications, I've been told it's a great market to be in becau

  • Making money w/ FOSS (Score:5, Interesting)

    by LorenzoV (106795) on Sunday January 13, 2008 @01:49PM (#22026868)
    Here's how I did it.

    Once upon a time I was a completely unknown, but reasonably competent, software developer. I worked for a big mainframe maker. The software I worked on was proprietery and completely invisible.

    Many suspected mainframes were all but history. I decided to learn to write for a different platform: PC, Unix. So, I bought a PC, taught myself C/C++. Now what? There was a open source project whose software I used. I felt it needed a big feature. The author wasn't interested in doing it, but was very helpful in getting me started on interfacing with it. I ended up writing a big plugin for it.

    That piece of work gave me some personal visibility and credibility in the open source community, and a "portfolio". When the layoffs happened, because of my work on the project, I knew some folks at a shrinkwrap software company. My "portfolio", a demonstrated ability, got me a job with the shrinkwrap company. --- My old employer, the mainframe maker, spiraled down the bowl into oblivion.

    The point of the story is that the software I wrote in the FOSS model didn't make any money for me, but it gave me, an introvert with little public persona, nor desire to have one, visibility and credibility to those who would hire me.

    That may work for you too.
    • Re: (Score:3, Interesting)

      by JosefAssad (1138611)
      I liked that comment. It's almost precisely what I did with my novel [sancairodicopenhagen.com]. Release for free and see if it creates a name that can go places. It being my first, no agents or publishers were willing to talk. Now at 5 months after release it's at around 7K downloads. Debut authors just don't get that kind of exposure. At all. So I concur. Do pro bono work (FOSS in your case, Creative Commons licensed literature in mine) and let that open doors for you.
  • by apankrat (314147) on Sunday January 13, 2008 @01:50PM (#22026890) Homepage
    There are three core reasons to open-source -

    * to solicit improvements (see Linux)
    * to facilitate adoption (through implementation transparency, see OpenVPN and TrueCrypt)
    * for personal reasons (to brag or to support political agenda, see libevent or IO language)

    These can be mixed and matched, but it typically helps to understand WHY you are open-sourcing. That's a first step.

    Second step, if you want to make some $, is determining (funny enough) your business model. You can make money off the open-source either via the support or via dual-licensing.

    Support model does not really scale, because in order to earn twice the money, you have put a double effort. It is also more of a sales task, which you may or may not have an inclination or an ability to so.

    Dual-licensing *is* a way to go, but it implies that the code is non-trivial, solid and mature. Otherwise it does not make any sense for a 3rf party to become dependent on something that's not quite ready with an uncertain future. This automatically implies that you should not be open-sourcing the code that needs work.

    Keep in mind that it's often possible to find someone willing to purchase the project as is from you. Depending on the arrangement you may also retain a right to influence further development of the product and/or land a mid-term contract gig.

    2c
  • by STrinity (723872) on Sunday January 13, 2008 @01:52PM (#22026898) Homepage

    There are many aspects of the application that I don't have time to refine, and other developers could definitely improve upon my work.


    So you've developed crappy software, you don't want to put the effort into making it good, but you still think people will pay you money?

    You are Bill Gates, and I claim my five dollars.
  • by nick_davison (217681) on Sunday January 13, 2008 @01:54PM (#22026914)
    Maybe I'm reading too much in to the phrasing here but I noticed:

    There are many aspects of the application that I don't have time to refine, and other developers could definitely improve upon my work. However, I don't know how I earn money from something once I've made it open source.
    Is this something that would make money on its own, with the time that's being put in to it?

    Or is it at the point where it's essentially a "nice idea" that's been taken to about typical shareware quality? Something that's not even close to standing on its own as a traditional boxed product, revenue generator without a lot more development work put in by a lot more people?... People that the goal is to get for free from the Open Source movement rather than actually hire?

    Back during the dotcom days, I'd get approached daily by someone new from sales or marketting within the large multi-national I was at. They heard I was a good coder and they wanted to know if I'd be willing to join their start up as the lead coder.

    I'd check their business model. They always planned the same thing: Who's paying for this? "We'll get VC interest." OK, what idea do you have? "We'll find someone with a cool idea and fund it with that VC money." So you're planning on getting VCs to fund you, to do the VCs' job, with you then taking the millions dotcoms are supposed to make their owners? I don't see this working. At that point, I always politely declined.

    Just as I questioned their entitlement to make money and, on a less manipulative level, their simply having deluded themselves... I'd question anyone who doesn't really have a fully featured product, that's not at a point where it can make money on its own, without needing Open Source devs to take it to the next level for them - work they won't pay for because it's "open source" but they'd still like a reasonable profit from for themselves.
  • I think we covered this in detail here:

    What is the Best Way to Start a Paid GPL Project?
    http://ask.slashdot.org/article.pl?sid=07/10/05/1756217 [slashdot.org]

    Generally, making "writing code that you give away" your life's work is generally a bad way to go about things if "steady paycheck" is what you desire (unless you're working for someone who's already figured out the business model).

    If you are interested in making a profit, follow the advice of other posters here and figure out what people WILL pay for first, and then
  • Forget it (Score:4, Interesting)

    by dskoll (99328) on Sunday January 13, 2008 @01:58PM (#22026954)

    It's virtually certain you will not make a living from free software.

    Our business model is to have a core GPL'd product that is solid, but geared for sysadmins and technical people. We then have a more user-friendly and spiffy product layered around it that is traditional proprietary software (although we do ship with source which is somewhat unusual.

    Hard-core techies or FOSS-only people are happy with the GPL'd product, and others buy the commercial product. The GPL'd product is also a good hook and marketing vehicle, as well as a proving-ground for new ideas, scalability enhancements, etc.

  • Pre-paid (Score:3, Insightful)

    by Per Abrahamsen (1397) on Sunday January 13, 2008 @02:02PM (#22026992) Homepage
    The trick is to get paid, or enter a contract to be paid, before you do the work. People need some functionality, and you write it for a price. As a byproduct, you release the code as free software. It gets easier over time, as you and your code gains reputation.

    I have made a living that way for the last 12 years.

    It is a change of mindset, you get paid for your work, not for your code, just like if you were an ordinary wage slave. The difference is that since your code is free, you are too, you won't lose it when switching client.
  • by kgwagner (611915)
    There's a lot of insightful information here already, so I'll just add a bit and reinforce some... There's nothing in the GPL (any version) that says you can't charge for your software. Whether people will pay is another story, since they don't have to. But, many people don't want to compile or jump through hoops installing, or even downloading the software in the first place. So, one way to start is to just offer the disks for sale. Almost anybody will pop $5 for a pre-burned disk with a reliable install
  • by Lumpy (12016) on Sunday January 13, 2008 @02:13PM (#22027074) Homepage
    Fair Use wizard http://www.fairusewizard.com/ [fairusewizard.com] makes some money and that is completely OSS. You can find guys that have recompiled the OSS release but it's always behind the main release and has no support.

    I buy it on a regular basis, and recommend it to clients and friends.
  • by jalet (36114)
    You can earn some money with entirely Free Software, although I can't live only on this for now.

    What I do is give free access to subversion tree to everyone.

    But I sell login accounts which allow people to download the software in packaged form (tar+gzip, Debian, Ubuntu, RPMs) including the compiled PDF and HTML documentation (vs SGML only from subversion), for a modest amount (25 EUROS or US$, and yes I know this is definitely NOT the same).

    All people who pay to download such packages are allowed to redistr
  • by Anonymous Coward on Sunday January 13, 2008 @02:19PM (#22027126)
    I've been working in a software company I founded with my friends at university some eight years ago. We have created a software platform for certain industrial computation tasks and believe it could very well be used in many other applications, especially for research purposes. We have frequently spoken about open-sourcing the platform, but always faced the same question: where's the money? We get a decent income for the applications we build on the platform, but haven't been able to figure out any financial benefits on open-sourcing neither the platform nor the applications. Following the discussion here it seems that no one really has found a working solution. Selling support or custom upgrades is not what we really want to do as engineers, is it?
  • Hi, I own since 4 years an Open Source company called Docebo (www.docebo.com), we offer an e-learning platform developed by us but released under GPL because we don't want that the customer pay for every student and we also want that the customer own all the software, data, code and course without being "linked" to us. We are based in Italy We have as customer italian Branch of SKY Television, AON Insurance and many other companies that generally have more than 50 Milion U$ or more than 500 Employees, nex
  • I've been meaning to sit down and draft a license for my own (and others', obviously) use, that would be sort of a hybrid license. Binary (re)distribution would be prohibited, but source code could / would be freely available and (re)distributable. Businesses, people who don't want to run `make`, etc., could have an easy one-click installer downloaded for a fee; shell / compiler literate people would have the source and could work with it and continue to pass it along, but couldn't offer binary downloads,
  • As long as you own the code for your product, I don't see why you couldn't simply try selling it as shareware until you're finished supported it, then simply release it later on as an open source project when you're ready to retire it. If you come up with any useful tricks for it in your closed-source development cycle, others could take advantage of it later on when you finally release it into the wild.
  • by domatic (1128127) on Sunday January 13, 2008 @02:37PM (#22027306)
    How would you make money with this as a purely closed source app? To make money as a closed source app, it has to have some polish and depth of functionality out of the box. You'll have to put it into it precisely what you say there isn't time or energy for. Implicit in making it a FOSS app is the hope that others will supply some of that time or energy but you have to trade off at least some of the personal exclusivity you could enjoy if you keep it proprietary.

    If you go some sort of FOSS route then is there any data this applications depends on to run. Financial apps in many domains have to be aware of tax rates or some sort of other specific data that has to be compiled for it to be useful. Compiling that data and keeping it current is at least as big a job as writing the code. If your app is in that category, then I suggest opening the code and charging for the domain specific data it needs to be useful.
  • by tjstork (137384) <todd.bandrowsky@gm a i l.com> on Sunday January 13, 2008 @02:55PM (#22027442) Homepage Journal
    Look, I'm trying to get my software business rolling and I'm finding four things:

    a) Selling commercial packages for Windows is extremely difficult online. You really need to have a highly trained sales force and a serious marketing budget. Corporations can pay you the big bucks, but, you need to lay out some big bucks yourself. Unless you plan on trying to be a millionaire, its probably not realistic to try and cater to vertical corporate markets via shareware or online software sales. It costs a ton of money to get in there... unless you hit the jackpot with that simple utility or game that everyone just have to have.... but there's a lot out there.

    b) Advertising revenue from being the main web site for free software often exceeds the revenue you can get from shareware anyway. This surprises me, but, I've spent far more time bashing my head against Windows shareware world but the Linux world, for a lot less investment, is making more money for me. It may be that my writing is better than my software, for sure, but, those little google adsense keywords do pretty good.

    c) There's really more interest in Linux, and, bigger players can give you some serious help. For example, IBM has an excellent solutions directory and keeps a database to help hook your system up with potential clients. That can translate into development work for you, to add new features, and really as more of an architect or senior level person (having designed the original project), then, at a lower rate a normal code-drone would get.

    d) Developing for Linux, or just having a site out there, can impress a lot of people in IT, and in some ways, better than Windows does. Everyone does Windows, and so being involved in Linux sets you apart. I have a client that's a closet Linux fanatic, and once I admitted that I too, love my dual opteron (until the SATA chip died), running Linux, our relationship got a lot better and I find myself being involved in ever cooler projects.

    So, yeah, there's this belief out there that Linux equals starvation whereas Windows is money, but, its a complicated world out there.

    Options abound. Here's one crazy thing I've heard of. As the copyright holder, there's really nothing that precludes you from selling both versions of the same product. You could sell your product for Windows, for sure, and you could open source it for Linux, if you like.

    Another thing you could do would be to offer your software as FOSS, but host a web site as a service that does it. Yes, you would in effect allow other people to create competition for you, but, usually, the biggest problem you have isn't the software, but getting people to buy into the idea that you have being your software. If you create a program to make a service that is FOSS, and suddenly a 1000 web sites pop up making it, you've in effect gotten free advertising for your concept, and the advantages of that cannot be understated.

    All I can say is good luck. In 2008 I'm going all out Linux - as soon as I get my Opteron mended -, and for the reasons I've listed, I think I'm more likely to make myself a millionaire giving software away than I would be selling it under Windows.
  • Several Choices (Score:5, Informative)

    by Caballero (11938) <daryll&daryll,net> on Sunday January 13, 2008 @02:57PM (#22027462) Homepage

    You've got several choices:

    1) Sell Training
    Write books, on-line training, seminars, whatever, and sell that as an adjunct to your open source project. Of course, those can be open source as well.

    2) Sell Customizations
    Offer to develop custom features or just consult on deployment. Some of those may be rolled in to a future version of the existing package if that makes sense.

    3) Sell Support
    Get people to buy support for the package and offer telephone/email support for issues. If the application is critical to a business, they may pay to have support on hand.

    4) Sell access to the code under non-GPL license
    Some applications are release GPL, but offer the option of paying to get a closed source commercial license.

    5) Split the package in to open and commercial packages.
    Bundle the basic system as open source and then have add-ons that are commercial. This is sort of getting them hooked on the free version and then hoping they grow in to needing the features of the add-ons.

    Regardless of which method you pick, you should realize it takes a lot of work develop a successful community around a piece of open source software. If your plan is to just throw the code out under an open source license, you're likely to fail. You need to promote your product, develop a group of users, have forums/lists for them to communicate, encourage developers, review and work on submitted code, and you need to spend time participating in those activities. Even then if your product isn't unique and interesting enough you won't get a following. Bottom line is that you need to be really committed to your open source project and it had better be best of breed or users will move to alternate choices.
    • by spasm (79260)
      5) If your software is arranged on some client/server model, offer server hosting services for those who don't want to (or lack the in-house technical skills) to deal with setting up and maintaining the server side of the setup.
  • In my rather limited experience of financial packages, companies do tend to be very conservative about new products. If you merely have a wizzy new software package, you might find it hard to get it adopted by the big players.

    They all insist on boring things like support, training, documentation etc. - stuff that FOSS traditionally lacks for the first few iterations, at least.

    My suggestion would be to use the software as a sort of loss-leader. Give it away (hence the free) and sell your expertise in trai

  • by garoush (111257) on Sunday January 13, 2008 @03:05PM (#22027530) Homepage
    This is an age old questions, was asked on /.s several times. Here is one from 2005: http://ask.slashdot.org/article.pl?sid=05/03/01/2145223&tid=117&tid=98&tid=4 [slashdot.org]
  • You might try ransom licensing.

    1. Make some videos that show off how awesome your software is, and post them on youtube.
    2. Tell everyone that you will release your program under the GPL once you have received, say, $1000 in donations. Substitute however much money you want for $1000.
    3. Follow through on your promise.

    You will only be paid once, but that's the only sensible way to charge money for software. Software is not a product or physical good; the creation of software is a service.
  • Customisation (Score:2, Insightful)

    by vandan (151516)
    If your open-source project gets you some cred, you should easily be able to find work doing customisations for businesses. There are usually far more people who would like to use your software than the number of people who are capable of installing and setting it up. Works for me anyway.
  • ...and figure out if there's a market in the first place and what your baseline reference is. A lot of business ideas aren't as great as you thought they were, and I suggest you find out rather than blame the (lack of) income on being open source. Being open source is not exactly a great boon to your clients, it's not their core business to develop and downloading other variations that may not get the sums right off the Internet isn't exacrly appealing either.

    You can always go dual license or OSS later, but
  • by FlyingGuy (989135) <flyingguy.gmail@com> on Sunday January 13, 2008 @03:25PM (#22027662)

    The conclusion I came to was to sell maintenance, upgrades, training and data conversion. I include the complete source code and database schema and its all very nicely documented. I cannot distribute the compiler because it is not open source ( Delphi Enterprise which includes all the runtime source ) but I include very specific instructions on how to set up the development environment and all the 3rd part bits that are required.

    Doing so game me the option of including MySQL server at no cost as the database for smaller implementations. For larger implementations they are required to purchase Oracle since at the time MySQL 4.x simply could not handle the load.

    So yes you can make money doing open source. Only the people that use it are required to have access to the source code, you do not, in my opinion have to make an announcement to the world that anyone can snag your product just because they feel like dorking around with it. It is available for download if you know where to look. And no I am never going to put it on any source forge.

    Some will argue that this violates the spirit of GPL or FOOS, but I submit that it does not violate the rules themselves. The source is there, you can get it, but it will cost you money to be able to build it

  • by bennini (800479) on Sunday January 13, 2008 @03:29PM (#22027690) Homepage
    It depends a lot on the type of product you have developed. I also created a financial software application (Data Loader [javenue.org]) to support a data service offered by Standard & Poor's. I originally tried open sourcing the thing and realized it was such a niche product, that no one would really have any interest in helping out and that it would be easier and faster for me to add features and guide the product without external intervention. Additionally, the user-base would never exceed 10-20 people i dont think.

    If your product will attract a lot of attention and be of use to lots of people, then it may be more advantageous to open source. My main problem with open sourcing an application is as follows. Lets say your application could save a company 10 000 dollars a year (which is roughly what mine does). If you open source the project, there may be enough incentive for a company to simply take the code and adapt/customize it themselves without paying you a dime. If you left it closed source, they would be more inclined to pay you a licensing fee than to go without the product since its saving them a good deal.

    So id say you need to compare how inclined potential clients would be to simply take the code and run versus the possibility of garnering attention from having an open source product and selling services/support for the product (which would only happen if it reaches a large user-base).
  • If you really want to open source it:
      - Write a book, sell the book
      - In the book, offer consultation

    If the consultation gets popular, organize into more general support services.

    Of course, you could just take the dip & sell it.
  • by wikinerd (809585) on Sunday January 13, 2008 @03:41PM (#22027776) Journal
    No software is ever going to make you money, closed-source, open-source, or free. What makes you money is your *contribution* to the economy, ie the value you create, and your *reputation*, *popularity*, or *fame*. So the recipe for success is: Build something people want (value) and gain popularity and reputation for your contribution. If you have some popularity and reputation it's then not that hard to make some money by selling services, minor products associated with your contribution, etc. Focus on popularity and getting as famous as you can. And the best way to do that is to build something people want and give it away for free. Afterwards, when people start using it, it's easy to start offering other associated services and products for a fee.
  • and it wasn't even mine. This, however, won't happen:

    There are many aspects of the application that I don't have time to refine, and other developers could definitely improve upon my work.

    You'll never get people to make meaningful contributions to your project, unless it's huge and has a good community, which some accounting program won't. Most likely, someone will hire you to do this modifications you want to do, and that's how you'll make your money. That's what I did.
  • Whichever route you choose. closed or open source, you need to evaluate your prospects. Are you capable of selling and maintaining it? Writing the code is necessary, but not enough to make money: do you have potential customers? How much work is going to be required to support it? Do you have enough time to do that? If you keep it closed-source, do you have the means to enforce your copyright? Have you written the documentation that goes along with it? Have you fully tested it?

    Running a business is
  • by wrook (134116) on Sunday January 13, 2008 @09:19PM (#22030392) Homepage
    Many, many years ago Michael Tiemann wrote a brilliant article on this very topic.
    He and a couple of friends started Cygnus software, investing $6,000 to get
    started. They added features (well, in the end pretty much built) the
    GNU development tool chain. Their customers were embedded developers.

    Here's the article:

    http://www.oreilly.com/catalog/opensources/book/tiemans.html [oreilly.com]

    I'm really sad to have come in late on this discussion because this
    article is a must read for anyone wanting to make money writing free software.
    Tiemann, et all became very rich doing it this way (Cygnus was sold
    to RedHat for $600 million -- although a venture capital company
    walked away with some of that money).

    My quick take on it: Get money up front. Get paid for development,
    not software. Realize that marketing is probably at least as
    important was programming.

    I really believe there is still a huge niche for custom software
    development built on free software. Over 90% of software development
    is in house development (OK, it's a number I pulled out of my
    ass, but I think it's accurate). Your job as a free software
    developer that wants to get paid is to convince companies that
    you can deliver software to them cheaper than their in house
    teams.

    So what you need to do is to get a track record in the niche
    that you want to work in. Then you need to hit the streets
    and knock on doors. If you build it, they may or may not
    come. You need to market your work. You need to show these
    companies the potential for using your services rather than
    building it themselves, or buying it off the shelf.

    As Tiemann showed, if you do it right you will have more than
    enough work to keep you fed.
  • by armaghan (1073544) on Monday January 14, 2008 @03:22AM (#22032270) Homepage
    I provide hosting, support and implementation services for SQL-Ledger (sql-ledger.com) which is also an open source financial application. Although I did not develop sql-ledger, I am developing a number of addons and patches which I am releasing to the community through my website (http://www.ledger123.com/ [ledger123.com]). I selected the best possible platform (joyent accelerator http://www.joyent.com/accelerator/ [joyent.com]) for my hosting so that my customers could just forget about issues with security, reliability etc. Added round the clock support to customers and free support to community and result is not bad. Making enough to feed a full time staff of two and one part time sysadmin. But I had the luxury of taking a mature open source application and build business around it.
  • by Wcc44 (818115) on Monday January 14, 2008 @06:48AM (#22033104)
    Two years ago, we created the CATS Applicant Tracking System [catsone.com], an open source ATS for staffing agencies and HR departments. We've released our software as open source from the beginning under a Mozilla based license with a few additional restrictions in an "Exhibit B" clause. We required that our logos and copyrights cannot be removed from visibility and that the software cannot be used in an ASP hosting model. We then run "CATS Professional Hosted", which is an ASP-model version of CATS hosted on our servers for $29.00 per user. We also sell professional support services for $495 per user per year. We are currently bringing in a good bit of money using this method. SugarCRM follows a similar business model.


    While the Exhibit B clause does add some additional restrictions that may not be quite as "open source" as GPL'd code, it does provide a good balance between supporting the open source community and making a profit. Our Exhibit B clause is below, if this helps.

    CATS Public License 1.1 Exhibit B:
    Additional Terms applicable to the CATS Public License:
    You MAY NOT use the Licensed Software to operate in or as a time-sharing, outsourcing, service bureau, application service provider or managed service provider environment.
    The following copyright notice must be retained and clearly legible at the bottom of every rendered HTML document: Copyright 2005 - 2008 Cognizo Technologies, Inc. All rights reserved.
    The "Powered by CATS" text or logo must be retained and clearly legible on every rendered HTML document. The logo, or the text "CATS", must be a hyperlink to the CATS Project website, currently http://www.catsone.com/ [catsone.com].

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