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GNU is Not Unix Software The Almighty Buck

Making a Living Building Open Source Software? 66

Posted by Cliff from the tricky-but-doable dept.
asimbaig asks: "When I started my IT Staffing and Placement firm last year, I couldn't find a decent Applicant Tracking System (ATS) or an Open Source alternative. I then found SugarCRM, and was blown away by its power and ease of use. Partly frustrated with the existing vendors and partly inspired by SugarCRM, I decided to write that ATS using LAMP. 6 months and 45k lines of code later, I have just released the preview of industry's first Open Source ATS/HR Management system, called CATS. Now, it will be an interesting experiment to see if I can actually make a living out of it and move away from my IT staffing business. SugarCRM seems to be doing well, so why not?. Is anyone out there making a living from writing Open Source code?"
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Making a Living Building Open Source Software? More

Making a Living Building Open Source Software?

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  • I prototype stuff on legal padds during slow times at work and write code at home. Does that count?

  • Yes, sort of. (Score:4, Insightful)

    by agent dero ( 680753 ) on Friday January 27, 2006 @04:58PM (#14582867) Homepage
    You're trying to do two very difficult things at the same time
    a) start a successful business b) make money off open source

    I know a few people that work for WindRiver, Apple, Adaptec, etc that make money off open source; I also know a few people that have actually started their own businesses and are making money.

    Can't say I know anybody in both groups....

    Good luck, hope you have good credit.

    • Re:Yes, sort of. (Score:3, Interesting)

      by Red Alastor ( 742410 )
      I guess that to be successful in both, you have to sell pretty boxes and offer commercial support. It's the techies who'll chose your product but it's the PHB who'll have to approve. Without a boxed product and paid support, they will probably refuse. With it, they might not even know it's open source (but the tech people will, that's what matters).

    • Re:Yes, sort of. (Score:3, Interesting)

      by ZephyrXero ( 750822 )
      You could start a succesful buisness off open source if you made something the people really needed and you had a good business model to coincide...if you're making "me too" open source code, then you probably will have a hard time. Another good place to try is in game creation. You can make your entire game open source, but keep the content of it proprietary (art, music, levels, etc). Once again...if you can make a product that people geniunely want, regardless of if it's open source or not, then you could

    • sendmail (Score:4, Informative)

      by TheCarlMau ( 850437 ) on Friday January 27, 2006 @09:00PM (#14585149) Homepage
      Take a look at Sendmail.org [sendmail.org] and Sendmail.com [sendmail.com] - one corporate and one OSS.
  • Even if you didn't write the OSS I think there is a business in it, not everyone is a techie, and not every techie is a Linux geek (or whatever).

    As an example I can see a profitable service doing phone installation and configuration, maintenece with Asterisk, you supply the knowledge for setup and expansion and be there for the customer when problems occur. Given such a complex system (even for proprietary like Cisco) businesses are going to be paying for support subscriptions, except the software costs/

  • Business plan (Score:3, Interesting)

    by duffbeer703 ( 177751 ) on Friday January 27, 2006 @05:03PM (#14582925)
    1. Create an open-source HR people
    2. Spam Slashdot
    3. ???
    4. Profit

    Your challenge will be attracting HR people who purchase stuff like this.

    Problems:

    - Your average personnel administrator doesn't know jack about open source
    - IT staff who care about something being open-source drive those sorts of purchases at many companies.

    • I must say, good show with slipping the Slashvert is, but do HR people read Slashdot? I don't think the IT department geek types hold much sway with HR, so you'll have to hit some of the HR-centered forums and drop some link-hints...

  • remember where your money comes from (Score:5, Insightful)

    by davek ( 18465 ) on Friday January 27, 2006 @05:13PM (#14583044) Homepage Journal
    you must remember that since you're trying to profit from an open source project, the software itself is essentially public domain and you won't be able to sell licenses for it. If you try to jump through licensing hoops to try and prevent that, you won't get as much support from the OSS community in support and integration for your product. Remember you can't make money selling electrons.

    So where's the money come from? That's what everyone's trying to figure out. The subscription model is one, selling support licenses is another. I'm trying to find a way to sell complete systems, so the value isn't so much in the software but in the labor put into building a complete open source system. There are as many ways to try and hack this as there are open source programmers.
  • So far, I thought that the only way to make money out of your open source project was to beg for donations on sourceforge.

    I wish someone would tell me how well it pays..

    • Re:Donations (Score:4, Informative)

      by Anonymous Coward on Friday January 27, 2006 @06:09PM (#14583681)
      I run the Symphony OS project (http://www.symphonyos.com/ [symphonyos.com]) in what free time I have. In the last year since the project has grown a bit the best month of donations we have had was about $95. That was with one person donating $50.

      Over the last year the project has received maybe $300 between cd sales and donations. Out of my pocket for servers and other expenses in running the project (not counting time) I have spent about $2000.

      I am sure once we have a more stable release dontations will improve and I dont blame people for not donating to an unstable project, but even with a stable project I dont think donations is any kind of a way to make a profit. At best it helps offset the money you spend to keep your project going.

  • For the Love of God, why.... (Score:3, Insightful)

    by psykocrime ( 61037 ) <mindcrime&cpphacker,co,uk> on Friday January 27, 2006 @05:28PM (#14583213) Homepage Journal
    create yet *another* OSS license???? Surely one of the existing
    ones would have been sufficient... it's not like there aren't 900000 gazillion
    to pick from.

  • Business Plan? (Score:5, Insightful)

    by 99BottlesOfBeerInMyF ( 813746 ) on Friday January 27, 2006 @06:02PM (#14583592)

    Are you telling me you just spent a lot of time building a piece of software, which you've already licensed, and you've decided now is the time to come up with a business plan? That is pretty backwards, in my opinion.

    There are a number of business plans for selling software and even a number of them for making money from Open Source Software:

    Plan number one, sell licenses to closed source software. I think you've already missed this one and it has the disadvantage that it can't compete against an open source product in the long run.

    Plan number two, get a company or conglomerate of companies to agree to pay you to develop and support a cheaper, better, more customizable alternative to their existing software. I think you missed this one two, if you already made the code public.

    Plan number three, release code for free and try to get companies to adopt it and pay you for support and customization. This is probably your best bet at this point. You need to find out what current companies charge for support and what they charge for their software and meet or beat their prices; or, you need to provide significantly more functionality. You need to get some good sales guys and give them the advantages of your product over other products. Main advantages you hold include the fact that it is open and thus they can migrate to other systems and that you or they can customize it to meet their needs. Find out what their current software doesn't do that they would like and make yours do it, just for them. Emphasize the personal service as part of a support contract that is semi-annually renewed or whatever. This is your revenue. Drawbacks to this include that the better your software gets, the less likely they are to need support and they can always go with their own IT dept. or with a competitor for support. You have the edge in that you know it better than anyone and are someone external to blame/call.

    Plan number four, release the product for free and promote it. Beg for donations from big companies that adopt it and other benefactors. If it becomes popular your reputation will be worth a lot to you for speaking engagements and other contract work.

    Best of luck.

    • An insightful post! (Score:3, Interesting)

      by RingDev ( 879105 )
      That's a great break down. And pretty true. Developing OS software is a money hole. Supporting OS software is a cash cow. The trick is to make enough money supporting the software to pay for continued development and marketing the product.

      -Rick
    • I ran a staffing company and have learned a few things about IT Consulting and Staffing business. I built it originally for my own workflow. Appreciate your suggestions!
    • Ghostscript is actually available under two licenses:
      * The current release is available under the AFPL which allows pretty much any personal use but limits commercial use (particularly as part of a product) to licensees who've dealt with Artifex. I looked into this at a past job; the cost wasn't worth it for what we were doing but could be worthwhile for larger-distribution products.
      * The previous major release is available under the GPL, with its attendant permissions and restrictions.

      So, you might be able
    • Plan number one, sell licenses to closed source software. I think you've already missed this one and it has the disadvantage that it can't compete against an open source product in the long run.

      As Keynes reminded us, in the long run, we are all dead.

      Closed Source continues to be competitive and profitable in many markets. Microsoft's earnings were up 5% in the last quarter to $3.65 billion USD.

    • Plan number three, release code for free and try to get companies to adopt it and pay you for support and customization. This is probably your best bet at this point. You need to find out what current companies charge for support and what they charge for their software and meet or beat their prices; or, you need to provide significantly more functionality. You need to get some good sales guys and give them the advantages of your product over other products. Main advantages you hold include the fact that it
  • "Outlook not so good" It's funny cause it's true; I contribute to projects and code because others do, and the whole community aspect spurs us on. I hate it when I see the "Please donate, this software cost over 2000$ in development for me!", come on...if you want money for your project, try to sell it, if you want people to contribute to your project make it really, really good.
  • Perhaps a dual licensing model would allow you to make some money. Have source code open and available for free. Educational institutions, non-profit orgs and evaluators can use this... commercial user must buy a license. Non-commercial licensers must provide you with any modifications / improvements they make. Commercial users could get a more stable and better supported version. Also you could charge for services, training, ... Not sure how profitable this would be, but it might be better than a pur
  • Err, where exactly is the source for this "open source" project? How about some screenshots, it's not as if the website is mega-stylish. A frontpage of /. does appear to be a bit premature for this project.
  • Should you really have live data, names, phone numbers, and contact info available in the demo?

    -Rick
  • 1) Sort orders only sort current page instead of entire data list
    2) Search functionality only allows searching on name
    3) Key skills is a flat text field, a table with skills and years exp would be nice

    -Rick

  • Follow Big Blue (Score:4, Interesting)

    by JumpingBull ( 551722 ) on Friday January 27, 2006 @06:49PM (#14584040)

    You have the basic elements for a business already in place. The current problem is making all the pieces fit together. Balancing the components will be an ongoing task.

    You seem to have:

    • Contacts and clients in the industry
    • A cash flow
    • Fundamental knowledge of the staffing process and the technology needed to support this
    • The understanding that this is a niche market, and is more service oriented

    Assuming that all these factors are true, it would seem to follow that using a service model may be the best use of your time. The staffing part of your business is the best place to finesse your design, introduce this service to your clients (perhaps as a web enabled application/service) and to discern where the best revenue stream lies.

    The only other bit of advice is to see where your energy levels peak. If you like the mix of all these activities then you're in the right place. If however parts of the efforts are draining and irksome then that should be cause for reflection.
    Any business will take more then you expect, but if you're enjoying it, it's a blessing.
    If not, it would just get more and more draining every day.

  • Philip Greenspun did this with ArsDigita [itconversations.com] in the 1990's. This proves it can be done.
  • I've been kicking this around: Code validation. The idea is simple: you pay someone to validate code you are using. Not only is is bug free (resistent?), but SECURE. No spyware, etc. Just a thought.

  • Give away the software, sell the services (Score:4, Interesting)

    by TapestryDude ( 631153 ) on Saturday January 28, 2006 @02:06AM (#14586630) Homepage
    I make 100% of my income off two open source projects: Tapestry and HiveMind. Apache owns the copyright, but the license is free (ASL 2.0). I make my living doing training and project work. This has paid my bills for over two years now.

    It's not for the faint hearted; my job window is always just a couple of months out but doesn't seem to be drying up either. And you need to be a triple threat: able to code, and to teach and mentor ... and to market! There's no way to tell if you can pull this off without trying.

    Even so, my wife has to work (mostly to get health insurance for us).

    I love the freedom, especially from PHBs ... but there are also occasions where I feel trapped by my choice. I'll need to come up with something else, someday, but in the meantime I'm loving life. You mileage may vary.
    • Even so, my wife has to work (mostly to get health insurance for us).

      When it becomes necessary, check out catastrophic (high deductible) health insurance. The cost is a fraction of full coverage, there's very little paperwork, and the cost difference between catastrophic and full coverage is sometimes more than the deductible! If you do have a lot of routine expenses you can tax shelter those costs with a HSA (Health Savings Account). A competent insurance agent should be able to help you out.

  • That's not the way things usually develop (Score:3, Interesting)

    by Sun ( 104778 ) on Saturday January 28, 2006 @03:40AM (#14586899) Homepage

    For businesses that make a living from selling support (SugarCRM, RedHat etc.), the path is a different one.

    First, you create the project. You keep updating it and improving it, until it forms a community. You keep mentioning that you also offer commercial support for the project, but until it has a community of early adopters, no one will pay you to support it.

    If you manage to cross that sea, however, there is good money in FOSS. RedHat make all their money by selling support for the product after they managed to turn it into a standard. MySQL argueably do the same (they also try to sell licenses, which is something I'm not sure I agree with). SugarCRM are doing the same, though they did annoy the "community" enough to create a split. It'll be interesting to see what happens with that.

    The thing to understand here is that you have a very long road ahead of you yet, before you can actually quit your day job for this.

    Personally, I moved into the "sell services, base them on FOSS" business. Some of the FOSS involved was written by us [sourceforge.net], but we never sell the actual software, always the service behind it [lingnu.com].

    Shachar

  • As you wrote the software, you are THE person to turn for potential customers that like the software, but miss feature X.

    Hopefully paying you to implement feature X will be cheaper for them compared to buying a commercial solution that already has X.

    It might even be possible to provide some infrastructure so various companies together can raise funding for a feature X they mutually want.
    • Variations on that theme:
      • Holding features hostage: implement something, but don't release it until enough people have paid for it.
      • Early access (probably combined with dual licensing): give paying 'premium members' (or something flashy-sounding like that) access to new features before they show up in the public open-source releases.
  • I do.

    I write OS code for money. People hire me to develop software for a variety of purposes all related to the automotive industry, and it pays quite well. You'd think the customer would later just take my code and make changes themselves, but they usually just call upon me to do it for extra cash, because they realize that despite the fact that my code is written well and readable, it would take longer and thus cost more to get someone to find their way around it, especially because most of my code is wri

  • Ugh (Score:2)

    by hey! ( 33014 )
    have you looked at the Sugar CRM code? It's dreadful.

    I agree though it has a lot of user functionality.

    There's a lesson here somewhere. It's important in the early stages of a product to pay attention to user needs, otherwise you don't get the momentum you need. From an geek early adopter pov, having access to source code, even bad source code, covers a multitude of sins. It'd be very expensive to bootstrap a proprietary product that was this ambitious.

  • ... not bad for part time and GPLed work :

        http://www.librelogiciel.com/software/PyKota/spons orinfo [librelogiciel.com]

  • A great deal of what corporations will pay for is the assurance that something will positively get done.

    You might be willing to make free updates available for your software, but you're not required to do so. You could quit any day. You could take down the project web site any day. You could ignore a security bug for a long time because it only affects a small segment of your users so you figure it can wait. You can document lightly or not at all.

    These are all your prerogatives in a hobby project.

    Enter the
  • The product needs to integrate with Outlook. Transfer data back and forth (meetings, emails etc.).
  • It's difficult to trade off all the enthusiasm for GPL/Open Source software with the need to make a living, but I do think it is possible, and importantly: worthwhile.

    I think one of the keys is to be realistic about what you're selling. So many times you need to ask yourself 'Would I pay this amount for this service?'.

    I've just started writing some tutorials [creativetutes.com] around using free software for creative design, and while I do expect to make some money (v. small) from advertising, I don't think I'll be able se

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