Earning Money with Open Source Software?

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?"

Podcasts on making money in open source

[sauge]

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.

Several Choices

[Caballero]

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.

To Whom the Money Flows

[NetSettler]

Since it's open source there is no real point in charging for the software, but you could charge for support.

I wouldn't bet my family's ability to eat on this. The problem isn't that there isn't money to be made on support. The problem is that a single person working his garage on software is not a support organization. Consequently, when it comes time to release that software, serious people (the kind with money) with a serious need for support (the kind they're going to bank their business on) won't trust a single individual for support. So your software will flow freely out, the support need may arise and support dollars may exist, but it's quite a gamble to assume they'll flow to you rather than to someone with a brand name and a committed resource of people that can stand behind a claim of support.

It's easy to want to believe you're going to get the money. But you are loads safer and much more likely to be right if you assume someone else will get it. You'd better assume you're going to get nothing and be satisfied with that. People may tell you otherwise, but I'd be surprised if they'd place money on that bet.

Advice, especially from evangelists, is cheap to offer when the one doing the offering doesn't have to deal with the consequences of being wrong. Don't let anyone convince you that doing something that is in the best interest of you and your own financial needs is some form of paranoia.

Of course, it's possible that the willingness of others to make free software has sufficiently driven down the price of software that there's no money you can make by selling it either. That's a different matter entirely. In that case, maybe you can sell service (supported by your own software, without releasing it), or maybe you just have something the world regards as worthless. That would be sad. But being sad would not make it impossible.

This question was asked and answered on Slashdot

[garoush]

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]

I thought about this for a long time and...

[FlyingGuy]

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

Re:Are you new here?

[electroniceric]

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.

Re:Are you new here?

[jawtheshark]

I posted this, because many people seem to equate "Free" (as in speech) software with "free" (as in beer, or gratis) Software. The FSF is clear on the issue, and as such the link was completely on topic. I can imagine that you release speciality software opensource. Your clients buy it, and get the source. A bit like a guarantee when you get run over from a bus. However, they have no intention to help their competition and as such won't give away the source to others. You yourself, only give away the source on demand... exactly as the GPL allows.

The GPL isn't as communist as many think. In a small market, it gives your customer certainty that the product can live on if you stop supporting it (Hire programmers, fork, 3rd party support), however they won't distribute themselves because it would give a competitor an advantage.

The comptetitor can get the source, but only if they become your client. As such, as a software provider you have won.

I can't be the only one except RMS to have understood that, really?