Open Sourcing a Vertical Market Application?

BigCanOfTuna asks: "The company I work for is considering the possibility of turning over one of thier enterprise applications to the open source community. They are doing this for a number of reasons including raising thier profile in the OS community, developing relationships with other Energy companies that would be willing to hire us as consultants, and of course just for good will (if there is such a thing in business!). Since the application is very specific to a vertical market, can one expect to see the same results that other open source projects see? Are there any other successful OS projects out there that are geared to a specific niche?"

Rifles and shotguns

[Mattcelt]

I think you'll be surprised at how many will want to use your application. There are usually some surprising consistencies between business types which may not occur to those who haven't worked in each. So don't be surprised if your application which was made for an energy company becomes, with a tweak or two, very popular among, say, watch manufacturers.

One of my favorite ideas in marketing was always that you will almost always hit a larger market than your target, no matter how specialized your target. Like Avon's skin-so-soft, for instance. You know, the mosquito repellant?

Re:Rifles and shotguns

[Suppafly]

Like Avon's skin-so-soft, for instance. You know, the mosquito repellant?

Exactly, I know several people who swear that sss is the best mosquito repellant made.

Use of components

[Wade Tregaskis]

You might find that people in similar industries will be interested in integrating some particular level of your vertical solution into their own vertical solutions, which will mean they'll componetise them, and consequently make them even more widely applicable and attractive.

Just remember though that if you want to actually see your code used [legally] by commercial interests, the standard GPL probably isn't suitable. While a BSD-style license is perhaps going too far the other way, there are various "

Re:Use of components

[Mr. Slippery]

Just remember though that if you want to actually see your code used [legally] by commercial interests, the standard GPL probably isn't suitable.

And why would that be?

Or are you just FUDing the GPL?

Re:Use of components

[cpghost]

You should avoid the GPL if you want to reuse components (libraries for instance) in further commercial products. BSD license is better suited for this.

Re:Use of components

[Mr. Slippery]

You should avoid the GPL if you want to reuse components (libraries for instance) in further commercial products. BSD license is better suited for this.

You're confusing "commercial" (selling it) with "proprietary" (keeping the source secret).

Putting that aside for the moment, why do you believe this to be true?

If I create a library that I wish to use in both open source and in proprietary products, GPLing it does not prevent me from putting it in my proprietary product - as copyright holder, I can d

Re:Use of components

[cpghost]

You may want to maintain two different versions of some components: one open sourced, and another which is not. Now suppose that you licensed the basic technology under GPL (or LGPL), you won't be able to fork off a closed-source branch from it. You'll be effectively locked into open sourcing every enhancement you made to your own product, or products that you want to derive from them.

Since those people want to open source their own product, it's only fair for them if they avoided locking themselves into

Re:Use of components

[AuMatar]

Wrong. As the owner of the copyright, you can release it under any terms you want. This includes licensing it in different ways to different people. You can use the same code in a GPL and proprietary product, provided that you originally wrote the code.

Re:Use of components

[cpghost]

Yes, you're right. I was somewhat confused there.

Just remember that you own the original code, not the enhancements nor the contributions by the community.

Without a project which holds all the rights, every single programmer would hold rights to his/her own diffs, and those diffs would be licensed under e.g. GPL. This will prevent you from using anything beyond your initial code in closed-source environments.

If a project is founded to support the code, and if every programmer transferred their rights

Re:Use of components

[AuMatar]

The problem with BSD is that his competitors can then take his code, put it in their products, and not contribute.

Pretty much the same reason I refuse to work on anything without a GPL-like statement requiring the code to remain open. IF I do MS can (actually it has, on many occasions done this with BSD style code) take the code, put it in a proprietary product, and then sue me if I try and use a copy (which may even be mainly my own code!) without paying exhorbitant fees. The BSD style licenses are just

Re:Use of components

[cpghost]

Wrong. If someone uses your BSD-licensed code in their own proprietary product, this still doesn't give them more rights than other users of this code.

As was already pointed out earlier in this discussion, you own the rights to the BSD-licensed code, just as you do on GPLed code. Just because someone else incorporates it in their products doesn't give them _more_ rights than other users. And, as long as you don't steal from their proprietary extensions, they won't prevail in court should they sue you here

Re:Use of components

[Mr. Slippery]

Now suppose that you licensed the basic technology under GPL (or LGPL), you won't be able to fork off a closed-source branch from it.

Of course you will. You are the copyright holder, you can do whatever you want to your own code.

You don't surrender any rights to the work by releasing it to others under the GPL. You can't use patches that others have contributed, of course, but you can fork off of your original version plus your own enhancements.

Another important reason to stay clear of the GPL are

Re:Use of components

[cpghost]

You can't use patches that others have contributed, of course, but you can fork off of your original version plus your own enhancements.

Yes, that's exactly the point. But why should I disclose the code if I were prevented from using the community's work? Isn't the main reason for the original submitter to let others participate in enhancing code [so that they can use it?]

Another important reason to stay clear of the GPL are NDAs.

True, but BSD-style licencing doesn't help here. Openness and freedo

Re:Use of components

[Mr. Slippery]

Yes, that's exactly the point. But why should I disclose the code if I were prevented from using the community's work? Isn't the main reason for the original submitter to let others participate in enhancing code [so that they can use it?]

"Let others participate in enhancing code"?

You make it sound like there are hordes of hackers saying, "Gee, I just love debugging for its own sake. I'd love to spend time helping you debug your latest releases. If you'll let me play, I'll gladly let you use my work!"

Re:Use of components

[cpghost]

GPL or LGPL doesn't prevent me from reusing my own code in a proprietary fashion - it prevents others from doing so.

If it prevents others from doing so, why wouldn't it prevent me from doing so? It actually prevents both me and others from reusing my own code in a proprietary fashion. I'd be breaking my own licensing terms if I did it. Hmmm.

Re:Use of components

[Mr. Slippery]

If it prevents others from doing so, why wouldn't it prevent me from doing so?

Because you are the copyright holder. You hold all the rights. ("Rights" in this sense meaning authorizations under copyright law, not basic legal or ethical rights.)

When you release a work under the GPL, you are granting other people certain rights. The right to use your work in closed-source derivative works is not among them. Releasing a work under the GPL does not affect your own rights to the work at all.

It actually

Re:Use of components

[cpghost]

Because you are the copyright holder. You hold all the rights.

Thanks for clarifying this!

But beware: you are the copyright holder of your own code, but you don't own the diffs. Therefore, you can only use your initial submission without problems. Every contribution from the community would belong to whomever wrote it (including diffs), and here you're bound by the same terms as everyone else.

A common scenario is to transfer the code to a project, and the project will either GPL or BSD (or whatever)

Re:Use of components

[Mr. Slippery]

Every contribution from the community would belong to whomever wrote it (including diffs), and here you're bound by the same terms as everyone else.

Correct. But if you release your code under BSD, I could still create my derivative under the GPL. Or I could create my derivative as proprietary. So releasing under BSD doesn't guarantee you access to changes. At least under GPL, others can't make proprietary derivatives - so the GPL does more to guarantee access to derivative works.

In this case, even th

Re:Use of components

[Wade Tregaskis]

If I create a library that I wish to use in both open source and in proprietary products, GPLing it does not prevent me from putting it in my proprietary product - as copyright holder, I can do what I want. GPLing would prevent someone else from an "embrace and extend" attack, which BSD style licenses don't protect against.

But it prevents others putting it in their products, because it's offen not possible for commercial or even public institutions to release their entire source base. NDA's have been m

Re:Use of components

[Mr. Slippery]

...it's offen not possible for commercial or even public institutions to release their entire source base. NDA's have been mentioned as one reason

Yes, the GPL acts as a deterrent to the use of NDAs to keep secrets about code - if you NDA, you can't use GPLed code. That's a feature, not a bug. NDAs about how code works are evil.

...another is the simple fact that you may want to use some source - with appropriate credit - but don't want to be forced into a relatively limited licensing scheme.

In othe

Re:Use of components

[tolan's my name]

I've enjoyed both your arguements, but one thing you both seem to be missing is that unless you plan to distribute code there is no compulsion under the GPL to give back code.

Thus the GPL wouldn't stop another company using your code (as most vertical market apps are developed / expanded inhouse and no marketed). It might stop them giving the diffs back infact, if there management doesn;t like the idea of releasing OS code.

So the practical effects of both licenses are pretty similair in this market. The

Re:Use of components

[budgenator]

You're still thinking of software in terms of pay-per-copy rather than as a service

most software users in these markets would be orgasmic if all they needed to do was pay for the software; the majority of the expense is in the service contracts, hardware and software expenses are chicken feed compared to support!

I predict two things:

[stienman]

Depending on just how vertical the application is, I predict the following:

1) Companies wanting to use it will have a staff member to manage it, who will likely be able to modify code as needed.

2) Assuming the program is internal to the company, it will not be distributed - therefore there is no need to share code changes back with you and the community at large.

So it's likely you will have some users, but few contributers.

But that's based on the assumption that it is of little use to more than a handful of people/companies around the world, and that it is only to be used internally to the company.

-Adam

Re:I predict two things:

[jrstewart]

2) Assuming the program is internal to the company, it will not be distributed - therefore there is no need to share code changes back with you and the community at large.

So it's likely you will have some users, but few contributers.

Legal obligation is only part of the reason to contribute to an open source program. Another huge one is not having to maintain your own set of patches against the main app. Then there's the idea of community - if you share you'll cool features hopefully other people will too. These are sound arguments that businessmen understand. They all lower your local development costs.

Re:I predict two things:

[GoofyBoy]

>you share you'll cool features hopefully other people will too.

One of the problem of the idea of community is that these companies think that these small things give them the edge. Why share that with others?

Re:I predict two things:

[jdray]

In energy companies, there are a lot of things that have to happen that create no competitive advantage, such as energy scheduling. It's just something that has to be done. And then there are the regulatory requirements, where the vertical market vendors really make bank. Organizations like NERC [nerc.com] (the National Electric Reliability Council) put out fully documented requirements for software, vendors code to it, wrap it in promises of end-to-end solutions for business-specific needs, and charge through the

I only have one question

[iCEBaLM]

What the hell is a vertical market?

Re:I only have one question

[revmoo]

What the hell is a vertical market?

I think it's "lingo" for the drug trade, but having a day job precludes me from being familiar with the language of "the streets" and as such I am not "down" with it.

Re:I only have one question

[delstar dotstar]

but having a day job precludes me from being familiar with the language of "the streets" and as such I am not "down" with it.

The original [bash.org] is much funnier and less recherche than yours.

Re:I only have one question

[LWATCDR]

Vertical Markets are small niche markets. Some exmaples would be.
Storage Building managment.
Doctors Office managment.
Video Store.
Auto shops.
Software for these are called Vertical Applications.
Guess what you can make some very good money in Vertical markets. You will never be a Lotus or MicroSoft but you can make good money.
Horizontals are things like Paint programs, or Spreadsheets. Things that almost everyone can use.

Re:I only have one question

[ironygranny]

The only thing I would add is that, at least in my experience, most vertical-market software tends to be *very* expensive, and suck hard w/r/t usability.

Seriously, some of this stuff looks like it was designed by a million monkeys with a million typewriters.

Re:I only have one question

[LWATCDR]

Verticals are expensive but there is a good reason. It all comes down to the numbers. lets say you write a vertical for a vets office. You will be lucky if you ever sell more than 500 in a year. If you charge $3000 for it which seems like a lot of money for a program you will bring in 1.5 million a year which does not sound too bad but... Adobe probably ships that in a day.
As to bad desgin. I have seen a lot of bad vertical software. I have seen a lot of good stuff as well. Frankly Windows has helped a lot

Re:I only have one question

[stienman]

For the Google Disabled:

A vertical market is a particular industry or group of enterprises in which similar products or services are developed and marketed using similar methods (and to whom goods and services can be sold). Broad examples of vertical markets are: insurance, real estate, banking, heavy manufacturing, retail, transportation, hospitals, and government.

Vertical market software is software aimed at a particular vertical market and can be contrasted with horizontal market software (such as word processors and spreadsheet programs) which can be used in a cross-section of industries.

Taken from here. [seu.edu.cn]

I personally like the "Broad example of a vertical market" phrase...

-Adam

Re:I only have one question

[bruthasj]

Think about this:

* You are Burger King
* FoodCo is a bun maker
* BK buys buns from FoodCo
* FoodCo is a vertical market
* BK could reduce costs by expanding into that vertical market by either purchasing FoodCo right out or by producing buns themselves

Vertical usually talks about suppliers, distributors, etc. etc. Like Gateway going into doing those Gateway Stores was a move vertically for Gateway...

Hope this helps.

Re:I only have one question

[sql*kitten]

What the hell is a vertical market?

Vertical means focussed on an industry, horizontal means things that are common to all industries.

Example: all companies need to do accounting, so accounting packages are often horizontal, i.e. you can use the same application no matter what industry you are in. So an accounting package will just do accounting in a generic sense.

Vertical applications only make sense within an industry. So, you might have one application that does lots of different things in that indust

Koha

[judd]

Koha [koha.org] is a successful open source library catalogue system. Are libraries a vertical market?

Re:Koha

[styrotech]

Are libraries a vertical market?

Well, they use vertical files :)

Re:Koha

[lizrd]

I would say tht libraries are a vertical market. However, they have a much bigger likelyhood of beging tied to an organization that has a large amount of computer services at its disposal. Vertical markets involving blue collar workers seem to be far less likely to be the target of a successful open source project than a profession where many of the workers are employed by universities.

Verticals.

[LWATCDR]

I just do not think an OSS vertical will work. The main reason that companies buy vertical app is they do not WANT to know how to use a computer.
A lot of verticals could be writen in Microsoft Access. While I am not fond of Access for a lot of the office management type stuff it would work. People pay for verticals so that they do not have to fuss around with putting it together themselves.
When non computer people get software to run there company they just want it to work and they want someone to call that knows how to fix what ever is wrong or they have screwed up.
Now you could charge for support but then you have to fund the support staff. You have to pay for phones, techs, and clerical staff to do billing.
Finaly how will people ever find out about your program? Are you going to pay to advertise a free program in what ever trade publication that market uses?
Now providing source when you sell a system might be good but if you are doing support how do you support something that somebodies kid has hacked and re compiled.?
I am not saying it can not work but you might be suprised what a HUGE pain in the butt it will be.

An Argument for OSS.

[jfisherwa]

You make some good arguments, but you're looking at it from the wrong angle.

His product will not directly benefit other businesses. It will, however, benefit contractors that implement OSS applications within these businesses.

I'm in a similiar position. I have two decently sized applications that I developed and licensed out - there is only one client per each. I would like to see them developed more, and hope someone could use them--perhaps I may be able to make a few bucks down the road as consulting for this.

In reality, I am not really missing out on any income as the chances of someone picking this up and going after a client that I even know exists are pretty slim. I will, however, gain a better understanding of the application itself, maybe make a few acquaintances and hopefully pay back the community that has helped me in so many ways already.

Isn't that what it's all about?

Jason

Re:Verticals.

[jdray]

The main reason that companies buy vertical app is they do not WANT to know how to use a computer.

Pardon me for being so frank, but bullshit.

Enterprises buy vertical market apps for a variety of reasons. In regulated environments, they often don't want the responsibility of having to keep up with regulatory changes, and want a vendor to do it for them. There's also the issue of liability insulation. If something drops in the pot, they've got someone to sue (the hard sell for OSS, btw). One issue we'

Re:Verticals.

[LWATCDR]

Enterpises and verticals are two different markets.
There are some simulaties but they are still very different.

All of your statmenst are complete correct for an Enterpise app. Verticals are a little different. Most Doctors, Vets, Machanics, and Video Store owners do not have any desire to know how to use a computer, they just want it to work. The none one to sue comment is also a little different in verticals. They want someone to call not sue.

Re:Verticals.

[jdray]

Okay, I'll take that. The story is what set my mind on enterprises. The poster works for an energy company, definitely in the class of enterprise and not doctor, vet, mechanic or video store. Still, my mistake.

definition of success

[turg]

Success depends strongly on having a clear definition of success in advance. You can have 100% success if your goal is only to make the code available. You can have complete failure if you have inspecific (which usually means unrealistic) ideas about getting huge consulting contracts and massive participation in developing the code

If by "successful open source project" you mean one with an active community of contributors, I would be wary of a definition of success that depends on the unpredictable actions of as-yet-unknown strangers. In any case, developing and maintaining such a group takes work.

Since the application is very specific to a vertical market, can one expect to see the same results that other open source projects see?

Sure. In fact, the smaller the pond, the bigger the fish you can be -- but it's all relative, of course. Again, determine a reasonable definition of success. Will you feel less successful if only one other organization uses your code (in the short term)? Why or why not? Have you lost anything if no-one adopts it?

Other success factors you mention are getting consulting contracts and raising your profile. These are both possible, but not knowing your industry I won't give you advice on how to achieve them. But again, knowing in advance exactly what it is you want to achieve (and how you are going to measure whether you've achieved it -- especially WRT raising profile) is key.

OSS vertical market likely won't work

[cr@ckwhore]

I just finished a 5 year stint as the lead engineer for a company with 2 vertical market products.

Not every vertical market is the same, but generally, a vertical market application is highly specialized. However, vertical market software is not sold in the same manner as general market software. It's not sold off the shelf. Vertical market software is sold by sales people that understand the the intimate details of the vartical market. The prevailing climate in vertical markets is that when an entity

Re:OSS vertical market likely won't work

[Mr. Slippery]

Since the customer is so focused on spending money, an OSS solution wouldn't even be noticed, even if it's just as capable as the commercial solution....Given the complexity of vertical market software, customer support is gold. Support contracts are king.

You are confusing Open Source with free-as-in-beer.

There are many companies that will be happy to take lots of money and produce for you a complete software solution that happens to be based on open source or free-as-in-speech components. What they'

Re:OSS vertical market likely won't work

[duffbeer703]

You are assuming that everyone abides by licensing agreements. A quick search on Kazaa will demonstrate quickly that that is not the case.

Let's say I produce and GPL a software package that manages a doctor's office. My code is up on the internet and some schmuck downloads my code and integrates it in his closed source doctor's office application, which he sells to doctors in another part of the country.

How do I know that he is violating my license? The guy using my code could be in Scranton, PA, Los Ange

Re:OSS vertical market likely won't work

[Mr. Slippery]

Let's say I produce and GPL a software package that manages a doctor's office. My code is up on the internet and some schmuck downloads my code and integrates it in his closed source doctor's office application, which he sells to doctors in another part of the country.

And how does this differ from someone selling CD-ROMs of a proprietary application you wrote - but with their own logo and a few graphics changed?

Whether or not I make my money on software licensing or support, how is it in my interest

Re:OSS vertical market likely won't work

[perlchild]

Since the customer is so focused on spending money, an OSS solution wouldn't even be noticed, even if it's just as capable as the commercial solution.

An OSS community wouldn't be noticed, an OSS solution presented by an integrator or other consultant who is paid for the privilege would. Not paying for software doesn't mean you don't pay for knowledge, that's the worse kind of FUD.

Depends on the Application ...

[TheFuzzy]

That all depends on the vertical market your application is for. Ask yourself these questions:

1) Are the potential users of this application internet & computer savvy?
2) Are the consultants/vendors to this market more likely to contribute to a project, or to steal the code and never contact you?

We considered open sourcing our temp agency application -- 100% of our profit comes from customizations anyway -- but after analysis realized that temp agencies don't have the know-how to find and install the app on their own, and the other software companies in the market would happily steal our code and incorporate it into their own products without giving anything back (GPL or not). So we've chosen to keep it closed.

However, that varies considerably by industry. For example, you'll find a *lot* of OSS in manufacturing, because many manufacturers have tech-savvy staff, and since service outweighs licensing fees in that sphere 20-to-1, vendors are willing to share.

-Josh Berkus
San Francisco

Community Benefit

[bbtom]

Let's just say that your company's app is only useful to few people but has a few kickass subroutines that the developers of software that's not related but not a million miles away might be interested in. That's a good exmaple of open source because if they use your subroutines, then they have to do the whole viral thing and improve the breadth of open source software.

Also, don't underestimate - what may seem useless outside your organisation probably has many uses that people have never thought of until

My Experience with This

[Mikkeles]

Quite a few years ago I worked (as a subsystem owner/guru) for a company which provided its product's source code to the clients. Thus it was limited open source and not free as in speech or beer.
The client base was technically literate (semiconductor manufacturers) and there was only one other competitor worldwide.
The code base was more than 12 years old (at the time) and had undergone much enhancement and change, so it was getting pretty crufty. It took ~24 hours to compile and link from scratch.

Gene

Have you considered GNU Enterprise?

[Spoing]

While it's true that your vertical app probably can't be merged with the core GNUe architecture [gnuenterprise.org], DCL isn't and is currently a stand-alone project [gnu.org].

Over time, the business rules/knowledge might be turn out to be the most valuable asset, leading others to make a GNUe module for your vertical market.

Likely? Honestly not. Though I'd check with them just in case there might be a match.

Credit Card Processing

[pdabbadabba]

The best analogue I can think of is the Trust Commerce merchant account API. Their PHP API, for example, was written by one of their clients, and not by them themselves. When I, as a client, needed a feature, I just added it and sent my code back to them for incorporation. I get more features, and they dont have to do so much work! Open Source can really work well in this sort of environment, because it enables players at every end to incorporate the features they would like to see, without leaving the bur

SCT's Banner software is a prefect example of this

[ONU CS Geek]

Many Schools and universities use SCT's Banner as a way to manage just about everything in the university--from student and staff payroll, to grades, to financial aid. Banner's source is "open," but not "free as in beer."

The university that I attended uses banner, and the Registrar and others have submitted patches to SCT, and they've been released as patches--either security wise, or as bugfixes.

I'm currently writing an application for web-based management of telephone information, be it LEN's, Pairs, o

Linux!

[aj444]

Are there any other successful OS projects out there that are geared to a specific niche?"

um... Linux! oh no wait, thats a niche OS successfully geared toward a specific project.