Making Money In Open Source 188
Khalid writes "An interview with Sleepycat President and CEO, Michael Olson, it brings a lot of interesting information about their business model and licensing scheme. A lot of good ideas, when a lot of open source based companies are struggling for life. "
Money, dont care (Score:2, Interesting)
/*the Open-Source movement has never been better situated to be the leader in Middleware development both within the enterprise and throughout the world. Industry players such as IBM are now looking to our movement to help set standards and define trends and new technology opportunities. It's time that we as a community step forward and begin living up to our billing.*/
Industry isn't that important for development. If it contributes money, it's okay. If it contributes code, even better.
We have to separete two important parts of Linux/Open Source:
1. Open Source or the Internet as a business model
-> short time exspectations were to high
2. Open Source or the internet as a self developing, fast growing plattform, despite of the fact, whether you can earn money with.
In some areas the growing utility of the Internet and Open Source products even leads to a crash of traditional industrys withour loss.
But from a economic point of view, companys and capitalism is just an instrument to get public supply.
So I am less interested in the benefit of companys, but in the benefit of myself.
Cstamitz@
Re:Money, dont care (Score:2)
Except that these arn't business models any more than chemistry, mathematics, jet engines or telephones are "business models".
read carefully: opensource based _COMPANIES_ (Score:4, Insightful)
If it's a COMPANY it need to be run like a COMPANY. A BUSINESS.
In my opinion the fall of many opensource based "companies" has been the fact that they never were COMPANIES - but instead a collection of enthusiastic nerds.
Opensource is not the complete answer for a company strategy unless you are planning to eat rice for the lest of your life.
Re:read carefully: opensource based _COMPANIES_ (Score:3, Interesting)
Most dot-coms failed because of a bad business plan.
Why? Cause the management were a bunch of nerds that had no experience with business plans.
Not to mention trying to convince a tech-savvy management team to use open source vs. proprietary is hard enough.
Also notice, that if you talk to an open source company's CEO, he'll have great ideas on how open source can make money in theory. But what open source companies have made money in practice???
Re:read carefully: opensource based _COMPANIES_ (Score:1)
Re:read carefully: opensource based _COMPANIES_ (Score:1)
Re:read carefully: opensource based _COMPANIES_ (Score:3, Insightful)
Really? Most of the dot.coms I personally dealt with were run by MBA's who spent a great deal of time on spiffy business plans, backed with spreadsheets with hockey-stick shaped revenue projections, and glossy power point presentations.
Re:read carefully: opensource based _COMPANIES_ (Score:2)
Except that these were more nice illusions to cover the lack of an actual business plan.
A business plan is exactly what it says a plan to operate a business. What you are describing is a nice presentation/advertisment. If there is nothing behind the presentation then it really dosn't matter how good that presentation is...
Re:read carefully: opensource based _COMPANIES_ (Score:2)
That's not entirely true. You've to produce business plans and financial forcast to get money from VC(s); and if they think you aren't good enough be the CEO, or you do not have qualified management layer, they will get you a CEO, and some managerment dudes.
Yes, you heard me right, get you a CEO. A CEO you've never met, and s/he will have handsome lot of stock options. Don't feel bad about it, you can bargain for better share, depends on th amount of money you ask from VCs.
VCs should take responsible for funding lunatic ideas. But hell, they've lots of money to go wrong.
Re:read carefully: opensource based _COMPANIES_ (Score:1)
Well, it's not a bad start for a consulting firm.
Lou lust leek lith a lisp, "Lopen soulce is not the complete answel fah a compny stlategy unless you ah planning to leet lice fah the REST of yah life." Is is Boston or Tokyo? I say better English is spoken in Tokyo. You be the judge.
jussi funny (Score:1)
=:>
OSS is just as good a start to a consulting firm as civil engineering, but the timing is better. The money now flowing to Redmond will soon be available.
Hold on a minute... (Score:1, Interesting)
Now, before you mod me down for disagreeing with the Slashdot groupthink, let me explain my statement. Don't you think the hundreds of failing Linux companies would have put at least a decent sized sum into hiring consultants to find out the most workable open source business plans?
Don't get me wrong, I think the ideas they present here sound great! It's just that, like Communism, it only looks good on paper, without working out in the real world. Surely, if it was this easy, VA Research^H^H^H^H^H^H^H^HLinux^H^H^H^H^HSoftware would have already put these into action and they wouldn't be on the edge of being delisted from NASDAQ.
Re:Hold on a minute... (Score:1)
Mistake number one :)
Re:Hold on a minute... (Score:1)
Whoa.
You are right (Score:5, Insightful)
The real problem facing OSS companies is that the rules of the game are so different than they are for proprietary software companies. You cannot make your money on licensing because if you try to do that, your competition makes a cheaper clone. OSS commoditizes the software market.
I think that companies like Sleepycat are honestly trying to find out how to make money in a commoditized world, but I think they will have to transiton into another mode. Repeat after me: "You cannot make money selling open source software that you develop yourself." The market is simply too competitive.
What more companies need to do is offer tailored services, utilizing open source software to produce less expensive, more competitive packages of services. Of course, then you are competing with IBM, etc. but I suspect that this is EXACTLY why IBM is starting to move more open source.
Re:You are right (Score:3, Insightful)
That is what they're doing, however. They have a dual licensing scheme that allows customers to incorporate the db software into proprietary products. They are targetting the embedded market, where companies usually do not want to release their source code. You're right, though, if someone came along and made a BSD licensed clone, that would probably kill them. However, if they make the best available product for the price, they will probably continue to make money. It sounds like they have something good going, they have made profits without any outside investors since they began and have continued to grow. They have only 13 employees. This is quite different from failed companies like Eazel that got tons of venture capital and blew it all in one shot. They're making money on their merits, not on open source hype.
A lot like TrollTech (Score:4, Insightful)
Now that the megalomania, greed and excess of the Linux boom days has disappeared, it's clear that raising a mountain of money from VC's and an IPO and overthrowing Microsoft and Oracle isn't the way to succeed for a free software developer. On the other hand, growing at a reasonable rate, living off revenues and (duh) making a really good product like Qt or BerkeleyDB can make you a nice living.
Re:A lot like TrollTech (Score:2, Informative)
Re:A lot like TrollTech (Score:2)
They did not say several important things: (Score:4, Interesting)
2: If Sleepycat decides never to release another OSS version, can I continue to develop their last version? Again, the interview makes this unclear and seems to give a tentative "no," but the license seems to imply that I can.
They have also said that the license is not GLP compatible, so these are real questions.
Re:They did not say several important things: (Score:4, Informative)
1: No, just like you can't reuse GPL code under the (less restrictive / more Free depending on which camp you belong to) BSD license.
2: Reading the license [sleepycat.com] I don't see why not.
3: He says in the interview, "Both Sleepycat and the Free Software Foundation have looked hard at the two licenses, and we agree that the Sleepycat license is compatible with the GPL."
Re:They did not say several important things: (Score:4, Insightful)
"Gee, I'd really like to use SpamFooOODBMSRTC in my project. But Alas! It is GPL and I'm stuck to BSD!"
Why not drop the developer/company an email?
"Hey! I've got this great FourthGenerationDiscoBobulatingDooHickey! It would work great with your SpamFooOODBMSRTC!! How can we arrange to do it? Can you grant me a different license that would work? Y'know, dual licensing? Is there some way I can add or use an exposed API and not need to redistribute your source? Can I get some old source under a different license? Mabye you can just promise, as copyright holder, not to sue my ass off?? I promise I will give you the changes I make under whatever your license is."
Negotiating has its problems, alas (Score:1)
Always a good idea, but many projects either involve several folks or have a history.
If there are several developers, all have to agree-- and even if you can get several programmers to agree to let you use it, you're still asking the contact person to do a lot of talking on your behalf.
If there's historical code (i.e. programs built on earlier GPLed work, or similar), even the Lead Developer of the current version can't necessarily break "their" own license, since their use of older code requires abiding by the license _it_ was made under.
So negotiating is best if it's a new, from-scratch, single developer project. That's a narrow subset of robust open source stuff.
The purpose of a license is to clearly state how people can use it. Negotiating 'better' terms is an option, but also keep in mind that, having provided a license, a developer can easily say 'no' to requests without stigma. So I hope folks don't ask for better terms, then kvetch if they aren't granted. Hey, they _did_ open source it in the first place!
Re:Negotiating has its problems, alas (Score:2)
Why don't more companies do this? (Score:2, Interesting)
I especially liked the comment... (Score:2, Interesting)
I suppose that's the basic difference: With Micro$oft, you know they're out to get you; with open source, you're never sure <g>.
Making "money" vs "a living" (Score:5, Insightful)
Maybe we should refocus our attention on making "reasonable" or "sufficient" amounts of money. Statistically speaking, in most fields, nobody makes the bigs bucks.
In sports there are many many minor league players just scraping by for each major league bazzillionaire. In business, most places are small mom-and-pop (more than 50% of the US ecconomy?) compared to the relatively few McDonalds out there. Maybe Open Source is a bit different in that it is virtually impossible for there to be even this many (or any?) BIG winners - but that doesn't mean that everyone is thus forced to be a "looser".
It seems as though there are lots of opportunity for making a living with creation, support, etc. of Open Source solutions to various people's problems. And in fact there are a lot of people making decent livings providing those services.
It's a cultural thing... (Score:5, Insightful)
I think there's a lot of money to be made on open source, but that's spread out over a lot of people. Support, custom development, integration, lots of useful stuff that isn't sexy and isn't going to make anybody fabulously rich but is valuable and will provide a more than adequate living for a lot of people.
I think if anything open source is a big bomb shell for the whole notion of making the big money. A lot of companies who got cozy making proprietary software, charging huge license fees and then selling exhorbitant support contracts on top of that are in for a big wake up call. When everybody can have access to the code you don't need to be addicted to one vendor. That breeds competition, and competition drives down prices. Those companies that can provide the best services for the best prices and can create the best brand will be the ones collecting the money in the future but because they necessarily must be efficient it won't be the really big money.
Re:It's a cultural thing... (Score:2)
Re:It's a cultural thing... (Score:2)
Or move?
Re:It's a cultural thing... (Score:2)
Anywhere remotely desirable to live is overpriced. Anywhere noone wants to live isn't.
Re:Ozarks vs City Life (Score:2)
So to you and the AC who talks about priorities, well, mine is doing what I do.
Re:Ozarks vs City Life (Score:2)
Re:Making "money" vs "a living" (Score:2)
Last I checked, which was five years ago, 90% of private sector jobs in the US are provided by business employing twenty or fewer employees (mom-and-pops). This included independent franchises (including the few independent McDonald franchises), but did not include and corporate owned or operated stores.
Re:Making "money" vs "a living" (Score:2)
I think you're getting a little ahead of yourself. Except for maybe a few nutcases, who has ever claimed that OSS companies would be making money hand-over-fist? The doubters among us don't scoff at them because they're not making Microsoft-type megabucks, we scoff at the naïve faith that business newbies have in such a shaky and unproven (and seemingly failing) business model.
Who is giving them crap for raking in billions? Nobody is, and it would be a strawman argument to claim that people are doing that. What some of us are giving them crap for is that for the most part, they can't even bring in more money than they spend. We're talking about the inability to make just a simple profit here, not vast riches.
Re:Making "money" vs "a living" (Score:2)
I think that a large part of the various company failures is that the company participants seem to think that they would be making money hand-over-fist, and based on that made some pretty piss-poor business decisions.
Re:Making "money" vs "a living" (Score:2)
No, not really. Even a company of 25 people may need more than US$100,000 a _month_ just to pay their employees, cover rent and electricity, and so on. So to keep such a business going, you've got to at least pull in 1.2 million a year, after taxes.
Considering that many dot-coms weren't pulling in *any* income, this is very significant. You really need a good, solid, and somewhat sizable income just to keep afloat. Most of the responses in this thread are from college students thinking "I only need $500 a month to get by," and not thinking in terms of what's involved in a real business. And the question then becomes "How can I use Open Source to pull in 1.2 million a year, just so I can stay in business? That's a tough question.
making money? (Score:4, Funny)
[root@localhost freemoney_0.02]$
[root@localhost freemoney_0.02]$ make
[root@localhost freemoney_0.02]$ make install
That wasn't so hard now, was it?
Making money is hard to do (Score:2, Insightful)
Re:Making money is hard to do (Score:2)
A consultant who can save a company $X should be able to make a living by charging such companies $Y for doing so, as long as Y < X
Location, Location, Location... (Score:1)
I guess profitability from day one is a plus too.
This is encouraging. And it's good ol' C code... Killer apps still use pointers!
Software for its own sake? (Score:5, Interesting)
The company I work for develops embedded and realtime systems. Some are sold as products, others are custom developed for clients. We use Linux and other open-source software in our products. And we make plenty of money at it. But we don't make money from the software, we make money from the hardware and from our expertise at systems integration.
We support open source because we don't have to pay someone for basic things like operating systems. We contribute things like device drivers back into the open source community because they improve the OS, even if the drivers are for hardware which is too specialized for most people to care. Someone might have a need for this stuff and find it useful, and perhaps this someone might find a bug in it or add new features or expand it to be compatible with other, similar hardware.
And to me this is what open source is supposed to be all about. It's about people and enterprises with particular needs working together to solve common problems. As these problems are solved, the solutions get released back to the community and the software improves. Yes, this does make it rather difficult to simply be in the business of selling commodity software. In order to make money at it, you have to make the software do something useful.
And making software do something useful is what it's all about...
Re:Software for its own sake? (Score:3, Insightful)
I remember that the user's manual for my first Apple computer came with a huge fold-out schematic of the entire motherboard. The design wasn't free, but it was open insofar as I didn't have to reverse engineer it just to hack on it. Do you think any more than a tiny handful of Apple's customers had the faintest clue what to do with the schematic? Or course not.
However, when you open up your product, even if it's not to the full extent of GPLing everything, you're inviting hackers and hobbyists to develop all sorts of software and peripherals... AND THIS HELPS YOUR BUSINESS ENORMOUSLY!!! Open source developers sometimes do it because they want to give something to the world. Other times, we do it because we just want to improve the stuff we own. We share our changes because it doesn't cost us anthing to do it.
It's not too hard to think of business models where both your customers *and* your business can benefit from open source. Make a software product and open source the hardware, or <plug>make a hardware product and open source the software [slimdevices.com]</plug>. You could even make a software product and open just part of it. Neither the open source community nor your customers will demand that you give away the farm for nothing.
Re:Software for its own sake? (Score:1)
Wow. Talk about naive. Ever heard of competiton? They save a fortune in R&D if they can just use your design.
actually, that's basically the idea (Score:2, Interesting)
You're quite correct that almost noone is going to want to buy for $50 what they can get for free off of your website, and if that's your business model it's only a matter of time before you're going to fail.
However, that's only one of the many ways of making money from open source software, support and comission work being the obvious ones. However, as you point out, there's probably an even bigger market in people who indirectly make money from open source software, i.e., that it's only a component, possibly a small component, in what they're selling or doing. And this is one of the things that really gives open source its power. It doesn't need companies dedicated to developing open source software, though that does help, honestly.
The company is being run by a moron (Score:1)
Any company that is doing this is not going to be around for long. Once you do this, you make it easier for competitors to come in. They A. Will have the same technology you do (ie: those drivers for that specialized hardware) and B. They'll be FAR ahead of your company since they won't have to spend the money to develop these. It's basic business. Once you do this, you lower the barrier of entry for other companies, and you give them a SIGNIFICANT competitive advantage over your own. Think about it... would you buy a piece of a company in which the owners were spending money to develop a technology (of any kind) and then give it away for free to everyone, including the competition?
slashdot trolls (Score:1, Funny)
Banner Ads, Lots of Banner Ads (Score:2, Funny)
Chevy Chase: "Rosanna, VA Software tried that and it didn't work."
RRD: "Never mind."
First off, it's Rosanne, not Rosanna. . . (Score:1)
KFG
Am I the only one... (Score:1)
It made my head spin.
GPL -- nice but inconsistent (Score:1, Interesting)
Capitalism is about property. Property is about me having something and not letting you use it unless I want to. So, it's about making things unFree (restriction).
So, the GPL allows supporters of restriction to take advantage of Freedom to further their goals.
For example, it doesn't require modifications to GPL software to be released under the GPL, unless the binary itself is released. It doesn't require software compiled using gcc, or linked with some libraries, to be released under the GPL.
And why doesn't it? Because then no business in its right mind would use it for any product who sale is critical to the success of the business.
So, the basic result of the GPL is to provide cost-free high quality productivity and development tools, with which businesss can thrive and further restrict other tangibles and intangibles.
Software becomes more Free, everything else becomes less Free.
The GPL is a self-defeating ideal.
Die Gadanken Sind Frie! (Score:4, Interesting)
The GPL is founded on the idea that *ideas* are not property. Hence the catch phrase, " Free as in speach, not as in beer."
If you make beer you are making property. A manufactured item that can be inherently possesed and traded. If *I* own *this* beer, you do not. You inherently *cannot*, as the beer is a physical item. It is, by its very nature, exclusive in its title of ownership.
RMS believes that software is more like F=ma. As an IDEA it cannot be restricted as can a beer, and should not be. Indeed, like RMS, I am old enough to remember when all software was essentially academic in its derivation and distribution. The very idea of propriatary mathmatical formula and algorithms was once considered ubsurd.
Much of the reason we are in the mess we are at the moment with regards to propriatary information, ( like what Mickey Mouse *looks like*), is due to forcing a legal structure of ownership upon items which are inately of * the mind.*
Play Tolstoy for a bit and go stand in the corner and * not think* of a white elephant for half an hour.
I think this example goes right to the heart of the concept of propriatary knowledge.
The GPL does nothing to make beer "freer," nor is it intended to, any more than the law of gravity is intended to make anything "freer."
But if you run a brewery and your software is freely aquired OSS than perhaps you can sell your beer *cheaper* and make the same profit.
The GPL makes ideas free, and actual *property* cheaper.
Now perhaps my beer is popular because of some "secret formula." That would be a trade secret, so long as I don't tell anybody about it.
The GPL has not problem with that. Trade secrets, are fully recognized and supported by the GPL.
Just don't TELL anyone.
There is the crux of the matter right there. A secret is only a secret so long as it's . .
The GPL dosn't require you to let the cat out of bag, only admit that it's a cat once it's out.
KFG
Re:Die Gadanken Sind Frie! (Score:1)
That song is actually kind of perfect in the Free Software context. If you know German or French, check this out: http://ingeb.org/Lieder/diegedan.html [ingeb.org]
Reminds me of a scene in the movie Dreiundzwanzig (23) where these two guys take out a joint in a train, smoke it, and start singing that song at the top of their voices.
Re:Die Gadanken Sind Frie! (Score:1)
KFG
Re:Die Gadanken Sind Frie! (Score:2)
But if you run a brewery and your software is freely aquired OSS than perhaps you can sell your beer *cheaper* and make the same profit.
Or even you can sel your beer for less and make more profit.
Re:Die Gadanken Sind Frie! (Score:1)
Well, that's well and good, but it's completely unrealistic in business. There's no way that a company can keep a trade secret. None, whatsoever. What would keep any number of employees running to a competitor with that GPL'ed idea for a large sum of money? That's not realistic. This happens every day, and the only way you can stop it is through legal/financial means. Look at Apple. They wanted to keep their new designs/products secret, but they kept leaking out. So what did they do? They sued the people leaking the information. Problem solved.
Re:Die Gadanken Sind Frie! (Score:2)
Did you know that tomatoes are free? It's absolutely true. Anyone can grow tomatoes at virtually no expense. They are "worthless." What costs you money at the store isn't the tomato. It's the transportation and storage of the tomato, which is STILL so "worthless" that you find it preferable to buy it rather than grow your own. Zuccinni has NEGATIVE value. Sometimes you literally can't give it away.
It's just basic economics. Anything ubiquitous and transmitable without cost has no monetary worth.
Which is not at all the same thing as saying it has no *value.*
Interesting isn't it? The language of our merchant ancestors places monetary worth at such an extreme that the words price, value and worth, all orginally with different meanings, have come to blend with each other and all stand in some way for *price.*
For instance, the *value* of a house is that *it houses you.* This has nothing at all to do with its price.
This is why some prefer to use the French word "libre" when refering to OSS. It has no context of price.
I have already made you a free gift of F=ma. There would be no point in doing otherwise. It has no monetary worth. It is, however, an idea of such import that it literally changed the world, and vast fortunes have been made by knowledge of it.
But it isn't *yours.*
KFG
billyuns for everybuddy? I DOWt IT (Score:1, Insightful)
It's hard to imagine anyone paying thousands of dollars for ViWormic M$BugWear (then paying someone else to pretend to make IT work for them), when superior alternatives, are available, absolutely free, but it does show the power of deceptive marketeering. Who wants to be LIEk that? In the gnu/o-s world (dare I use the two in the same post?) there is no eternal liesense/'upgrade' path, therefore no billyuns, or stuck market FraUDs, to be perpetrated (other than the ones already being prosecuted). So, here/there we are, with the best solutions that can never be sold in some canned version. Most likely j. public will have to take IT in the .asp for a while longer, before he can see the function (or lack of) behind the ?pr? bs. EVERY person I speak with, is angry/discouraged/disgusted with father williams' garbaage, but is resigned to believing that's the way IT is.
God willing, when j. finally does get the head extraction he's been promising himself, there'll still be some choices available. We'll [scaredcity.com] still be here (increasingly busy ourselves lately). Meanwhile, don't forget to check out our web address [opensourceworks.com] giveaway. Includes a year's free hosting. Just in case o-s/the web/commerce, etc... continues in some form.
Today, I heard again, the rumour that fud is NOT dead. Hard to believe, having seen the face scans [opensourcenews.com], of the gottiesque felons of the kingdumb. They are the REAL .commIEs, know?
Next, we're starting to work on this cite [linuxville.com].
Handy reference for pronunciations (Score:3, Funny)
(Thanks to Merriam-Webster [m-w.com] for the pronunciations.)
Not Making Money In Free Software (Score:4, Insightful)
In fact, Sleepycat's business model stops working if the Free Software revolution has taken place because no one would need a proprietary-compatible license for Sleepycat's software. ACT's business model continues to work because their customers still need support, and still pay for enhancements to the GNAT toolchain.
I guess Sleepycat is just an Open Source company, but not a Free Software Company. ;-)
Re:Not Making Money In Free Software (Score:1)
I'm enjoying GNAT while I let others wait for the mythical Free Software revolution
-- Gerhard
Re:Not Making Money In Free Software (Score:1)
Incidentally, ACT tried this with XML/Ada in previous versions (which was pure GPL in public versions, and GPL-with-exception in customer versions), but stopped the experiment with the most recent public GNAT release.
Re:Not Making Money In Free Software (Score:1)
Tim
Re:Not Making Money In Free Software (Score:2)
That's more that a little simplistic actually because it ignores the fact that most software development is currently proprietary software development. It shouldn't surprise anyone that three quarters of their revenue comes from commercial software developers, that's how business currently gets done. If the day and age ever comes where most people are using Free Software then there will be a great deal more customers for Sleepycat's service and support contracts.
There will always be businesses that are willing to pay for support, customization, fancy dan new extensions, and a whole host of other services. Right now Sleepycat sells software licenses to hardware OEMs, a rather limited field. If Free Software were to become the de-facto standard, then they would certainly see more people interested in their software, many of whom would be willing to pay for their particular expertise.
Besides, the alternatives are far worse. If the day comes that everyone switches to Free Software the commercial software companies will have no revenue. Free Software is going to be developed whether you like it or not. The smart thing to do is to make sure that some of it is yours.
Re:Not Making Money In Free Software (Score:2)
And that conclusion is derived from... what?
If Free Software were to become the de-facto standard, then they would certainly see more people interested in their software, many of whom would be willing to pay for their particular expertise.
Again, whatever chain of reasoning may underlie your conclusion is not apparent to me.
Free Software is going to be developed whether you like it or not. The smart thing to do is to make sure that some of it is yours.
Why? What benefits accrue to me by making sure that people are using software that I wrote, if they're not paying me for it? The wonderful satisfaction of a job well done? Great, but I got bills to pay.
Tim
Re:Not Making Money In Free Software (Score:2)
Most definitely true. And someday, that WILL happen unless bad laws get in the way. So essentially, they are helping to support the Free Software revolution at the expense of those less enlightened. Kinda funny actually
Re:Not Making Money In Free Software (Score:2)
I think you may hev missed the point. They're only able to make money developing free software because they sell it under non-free licensing arrangements. In the hypothetical post-proprietary world, they would not be able to continue improving the software because they would not be making any money.
Similarly, for ACT, the income stream seems to be based on a similar dual licensing agreement, with the latest and greatest only available under a proprietary license. If all software were free, they would not have sufficient revenue -- they only make money from their software by protecting it, not by giving it away.
It's very interesting that free software can be part of the business model of a successful business, even if only a small mom-n-pop operation. However, it also needs to be noted that neither of these business models is compatible with free software utopianism. The legend of the future will need to be revised if these companies are paradigmatic.
Tim
Re:Not Making Money In Free Software (Score:1)
There are other reasons why people do not give away their supported GNAT version.
Anyway, now that GNAT 5.00w is part of the GCC CVS, we have got a completely new situation.
Re:Not Making Money In Free Software (Score:2)
I'd like to, but the ACT website is not very forthcoming on the open-source question. It left me with the impression that they'd rather you didn't know you could get GNAT for free.
There are other reasons why people do not give away their supported GNAT version.
What are those reasons? Don't disincentives to copy stand against the whole free software/open source philosophy?
Again, it seems that to make money on open source, you need to find a way to make it not really open source. We get back to the issue that the commercial value of something that can be freely copied is effectively nil.
Tim
Re:Not Making Money In Free Software (Score:2)
You elided the above. Please answer the question. Thank you.
Do you really assume that the ACT business model is built around the fact their supported customers get access to new GNAT releases 15 month ahead of non-supported customers? This is completely off target.
Do you have some basis for that assertion? It seems to make commercial sense that they would be keeping the latest and greatest for paying customers. Fifteen months is a lot longer than it would take to put it into CVS for GCC, especially as an unstable build -- an accepted practice in the open source community.
In contrast, ACT is selling support for their GNAT technology. The exact version number of the product does not matter much if you can contact the vendor in case of a problem, and hours later it has been analyzed, and a solution is proposed.
Do you have some basis for that assertion? In Sleepycat's case, there is a three-to-one ratio in favor of licensing over support revenue. Do you have some verifiable reason to believe that ACT's revenue model is primarily based on support rather than on selling software?
Tim
Re:Not Making Money In Free Software (Score:2)
Remember, though, as stated in the article, much of sleepycat's position in their proprietary licensing market comes from their open-source software strategy.
Indeed. Open source as loss leader, with traditional licensing for revenue, may have possibilities. If so, this will require substantial changes to the open source/free software mythology, from a revolution model to a peaceful coexistence model. It's not compatible with the slogan that in the future, all software will be free.
It does look like dual-license strategies do significantly better than the "write free software and charge for services" model, doesn't it?
Yes, although in this case, not enough to get past the mom-n-pop level, at least not so far.
I wonder how well sleepycat does compared to other niche "embedded" database vendors like Polyhedra or Solid.
Hard to say. They're all privately held. The Polyhedra [polyhedra.com] site doesn't say how big they are, though it offers a wide variety of product, service and support options. It shows no current job openings and does not have an "about the executives" page, which are not good signs. Oh wait, there's this inconspicuous [polyhedra.com] note -- they were acquired in whole by Enea Data AB [www.enea.se] in March 2001 for their RTOS. Doesn't exactly sound like a high-ticket sale.
The Solidtech [solidtech.com] site says they closed a $50M venture capital round in 2000, which implies that they are probably not profitable but were seen as having the potential to become profitable. They have only one job listing at present, an account manager, which as bellwethers go is not a particularly good one.
Tim
Re:Not Making Money In Free Software (Score:2)
Thank you for the reference. By looking on Google I found a 1997 thread entitled "Towards a free GNU Ada" [google.com] that shows that quite a few people are not satisfied that the late-public-release strategy employed by ACT is providing them with free software of adequate quality, and who are not convinced by Dewar's explanations of the policy -- which are, in a nutshell, that they will release no wine before its time. If you don't pay for support (the story goes) a premature version would only hurt you, even if you think you want it. I'm not involved enough myself to have an opinion one way or the other, but it does appear there is a significant divergence in opinion on whether ACT's model is in line with the goals and principles of the free software movement.
One thing I did find interesting was Dewar's statement bearing on the "to many eyes all bugs are shallow" dictum:
I've made a similar argument here myself a few times, with respect to the open source mythology of easy and valuable outside bug fixes. The startup time for any significant bug fix on a large project like GCC or Mozilla is itself quite large, and quick fixes in a complex system are likely to be the cure that is worse than the disease.
I also found this message [google.com] which is instructive on ACT's history and size. It's still in the under-twenty-employees mom-n-pop category, or was in 1999.
Tim
Re:How Does ACT Do It? (Score:1)
It takes quite an amount of work to create a public release, and I can understand that public releases do not have the highest priority for ACT. Delaying the release of the public version does not encourage people to get a support contract. Either you can afford one, or you can't. The audiences for the public and customer versions are just too different.
The transgaming model (Score:1)
The best way to make money in open source is not to even try to sell software, but to use the transgaming or redhat models.
This is selling services.
It's in the hardware (Score:3, Insightful)
Fascinating, inspiring- I'm in the same boat (Score:5, Interesting)
I do dithering/wordlength reduction software under the GPL (it's not C code, mind you, but it is still GPLed) and the last version [airwindows.com] did fairly well, competing with some extremely formidable proprietary dithers from places like the POW-R Consortium and Apogee. That stuff pretty well held its own for the most part with the best that the proprietary world had to offer.
Over the last week, I've drastically overhauled my noise-shaping code, and am trying to get final work done on a new release of my software- and this time, I've blown everything proprietary out of the water completely (w.r.t quality of output- not workflow convenience- I don't do hardware, or realtime output). I've got one dither that's consistently -160 db noise floor from 0-2K. Another one hits -170 db at 1.8 and 3K, right where the ear is most sensitive. Another steadily drops to below -170 db at the lowest frequencies. Another uses unusual methods to produce soundstage depth (a comb-filter-like noise floor- never heard of anyone doing that one before).
This is _all_ GPLed. You can't use any of it in proprietary software without violating the public license it's released under.
This is also _all_ mine. It's not even written in C, much less based on GPLed code from others. (That's one reason why my file reading routines suck ;) ). It uses none of the 'many hands make light work' concept of open source- I do all the work and have not had any offers of help from anyone at all, except some mastering engineers who've given their thoughts on early versions of its audio performance, and they don't write code.
With that in mind, I have to say I'm delighted to see SleepyCat's take on all this: it confirms what I had suspected, and gives me hope for the future. You can make money on open source by indulging in people's desires to NOT play along and open their own source. You can charge them to NOT share (if they share, they get it for free. How much is your paranoia worth to you? ;) )
The only requirements are that YOU have to do the work- which stands to reason- that you have to not only do all the work but also outperform everybody else- and that there have to be enough others out there who want what you have to give, but won't themselves share. Basically, you're charging people for their own greed. If they were willing to give their work to the world as you do, they'd get your help for nothing. But if they want what you have, and won't do as you do- they must either do without, or come to terms with you. (or rip you off outright, but that's another story).
It's inspiring to see how these folks do it, and definitely something to emulate- makes me glad I've been using pure GPL all along, rather than something like LGPL. They're so right- you can't exert this kind of pressure UNLESS your 'free' licensing is hardcore 'libre' with no concessions to business. It's gotta scare the suits and the lawyers enough so they come to you and say 'maybe we can work something out' (*kaching!* good to do business with ya!).
Wonderful to see this. And again it's so simple that I marvel that nobody else has been suggesting it- I thought I had sort of invented this concept for myself out of necessity and it's reassuring to see that people have actually tried it and it works. You have to have a product so good that people _do_ want a piece of it- a libre license that scares the suits- and a willingness to release private versions under non-free parallel licenses to companies that want what you have, but won't share code themselves.
Maybe this _does_ lead to doing yourself out of a job, in the future when everybody is nice and shares ;) or maybe the 'bar' is very high, in that you really have to perform to get in such a position. If that's the case, then (a) explains why I haven't made money this way yet, and (b) if 20 db better noise floor than the top proprietary dither isn't enough, I'll keep working until it's 30 db ;) it looks like some entire concepts like indeterminate-order noise shaping are mine alone. I don't think you can even get error distributions anything like what I'm getting without it- so for a change, rather than indispensable technology being owned by a patent holder, indispensable technology is 'owned' by the sphere of GPLed free software. Any arguments that code or algorithms are property and not speech will only enhance the value of this 'ownership'. Or to put it another way: so software is not speech? So you can 'own' an algorithm, huh? Well, _this_ one you can't have unless you go libre with your own code, or pay! *kaching*
Hah!
I gotta get back to work- the main dithers have been hammered out, but I need to adapt some of the others, like Logic and Ambient, to the new error-feedback routines. They probably won't outperform the others in numbers, but they're geared to different needs: Logic turned out to be good at revealing depth cues accurately, and Ambient was particularly warm with very authoritative bass, and I gotta see if I can bring out those qualities more.
If there's anybody else out there capable of doing this type of thing in other fields, please, please, go for it with every bit of effort you can come up with! Maybe 'open source' as a way of not having to do as much of the work has an immediate appeal to people- but the only way we're gonna REALLY get Software Libre out there and impossible to avoid is if you do the work yourself, do it BETTER than anyone else can (pick your field carefully, and narrowly!) and then put your stuff out with a hardcore libre license and a willingness to charge for dual-licensing! It's gotta be 'This is mine- you either share, or you pay. My way or the highway'. That's the only way to win...
Re:Fascinating, inspiring- I'm in the same boat (Score:2)
Well ghostscript is vaguely similar. The MPL is designed for this sort of thing (it does give a specific entity the right to release under a different license, in that respect it is even better then the GPL for this business model).
I don't know of anyone doing it a successfully as Sleepycat though...of corse the sleepycat software is also damn fine. I have written some very big projects that used it.
Re:Fascinating, inspiring- I'm in the same boat (Score:2)
Also, it's audio software, so it produces a sound-file output. The way you test that is by listening to the result...
Re:Fascinating, inspiring- I'm in the same boat (Score:2)
Somehow I think we have a failure to communicate here... ;)
Re:Fascinating, inspiring- I'm in the same boat (Score:2)
Hi-pass is a type of filter. You start with regular white noise, which has substantial low and midrange content (it's not particularly colored and contains all frequencies- this is what flat and TPDF dither are made of).
The thing is, with dither you don't want low frequencies- they don't help linearise the system particularly, they just add energy to the noise floor unproductively.
So, you filter the white noise: you can do this by producing a high-attenuated version (averaging nearby samples, for instance) and then subtracting it from the original so that only the highs are left.
Do that a couple times and you might have a fairly sharp cutoff, like 18db per octave.
The Hipass dither in my software is _100_ pole: it does this "produce averaged version and subtract it from the original" 100 times before you get a signal out. That produces a very near-Nyquist dither component. Truly it is indeed a hip-ass dither ;)
Re:Fascinating, inspiring- I'm in the same boat (Score:2)
Besides, if you try to sell software I will just laugh at you and give your customers copies of my own original software for nothing. Go right ahead and spend money on marketing, if you're serious and not just some wanker talking big and not doing anything. Here's the source [airwindows.com], go nuts... note the GPL at the top, and sell away my friend, just have your source ready to include...
fundamentally opposed (Score:2)
People in OSS generally are totally open source and won't try. Anyone who tries to make money while following the terms of a license that almost prohibits making money off the intellectual property is asking to go bankrupt. The product may be sound, but the business practices aren't.
Re:fundamentally opposed (Score:2)
#include rtfa.h
Patches (Score:2)
Making money with open source (Score:2)
It's not a get-rich-quick business, but it's a real one.
Consider a "we'll convert your company to Linux" business, for example. Set-up, training, tech support, customization, all those people-intensive functions.
There are obvious open ways to make money (Score:1)
My company is taking the same approach with the Jtrix platform [jtrix.org] which is a completely open source way to implement Web Services. We're a commercial business and need to make money, but if others make money too, then great! Our use of the LGPL means they don't even have to pay us.
We don't have ambitions to take over the world, but want to create an industry. Open protocols might mean you can't have it all, but they do mean you can have an awful lot. And that's more than most people have now.
Nik.
Dual licensing still sounds dodgy to me (Score:1, Interesting)
I understand that we are happy to see an open source company doing well but I can imagine how you all would scream out if Microsoft was going to make money with free software.
GPL and OpenSource are A Good Thing (TM) because they take the money issue away from the development of the software. Make money with your knowledge! Make money with your service! But don't sit there and just collect the dough.
As much as I like to see companies providing software to the community and still earning money with it, I am scared that this could be used by stronger companies one day, say IBM, Sun or Microsoft, by inserting one essential component in copyrighted and patented form to gain control. And to make money with it.
Re:Dual licensing still sounds dodgy to me (Score:2, Insightful)
A GPL license still applies even to the company that issues it. Just cos you wrote it doesn't mean you're uniquely positioned to sell it under both a GPL license and a proprietary license. Sure, you can cobble a license that looks like GPL, but has this tiny little amendement that permits dual licensing...
That's harnessing the hard labour of the Open Source developers, and saying "Thanks lads, we'll just take all your hard work on enhancements and fixing the bugs, apply it to our proprietary version, and we can then flog it off under a closed source license to the big boys, who can flog it off in their proprietary stuff, etc."
They should come clean on this. It's a BSD license in GPL clothing!
Nothing wrong with a BSD license of course, but at least it's upfront and honest and let's everyone know that it's free to be utilised in proprietary software.
A true GPL license has no back doors.
And yeah, the LGPL is a fine compromise and marks clear boundaries between GPL code and potentially proprietary code. I got no problem with companies utilising LGPL modules alongside proprietary ones.
Re:Dual licensing still sounds dodgy to me (Score:2, Interesting)
Hmmmn....
Just went to http://www.gnu.org/philosophy/license-list.html
and it says:
"The Berkeley Database License (aka the Sleepycat Software Product License).
This is a free software license and is compatible with the GNU GPL. "
Maybe the GPL should apply to the issuer of the license too???
Can a company really release software under the GPL and yet re-release it under a separate closed source license?
Sure, they can say "Ah, but we don't look at or incorporate anyone else's changes to our software. Our proprietary license only applies to software developed in-house."
Yeah.... right...
What about bug-fixes? "Well, we have a clean-room of developers who re-engineer a solution to each bug that is reported".
So this is a bit like holding Open Source in contempt then? You're not actually interested in any of its potential fruits (apart from bugs getting reported), so it's only an altruistic gesture? It's like saying "We basically have a proprietary licensing model, but because we're convinced that public distribution of our source code represents no threat to our business, we're happy to ride on the coat tails of the Open Source movement. Our licensees like to have our source code anyway, and an added benefit of making it public is that it helps prevent bespoke developers end up with a competing product they've been forced to develop from scratch. But, no, although we republish our proprietary source under a GPL-like license we're not really Open Source developers".
So this is not an 'Open Source' company making money. It's a normal software company that has no worries about publishing its source code (that is restricted to further development by a sector of the development community that it doesn't perceive as a competitor).
If it had been put this way, it wouldn't be remarkable, it would have just been sensible, enlightened practice by a commercially oriented company.
But, instead it has been put in a way that tries to portray the company as an Open Source development company.
I hate sounding like a broken record. Free != free (Score:2)
Ok, I'm sure I could run through my submission records and just find something to cut copy paste, but everyone here (or a good number) has missed a very important point about the GPL and Open Software, and always miss it. Maybe that's an american thing too :). Anyhow, just to repeat myself (and I'm sure others are typing this up as I am right now).
Just because I sell software under the GPL -does not mean I have to give it to you free-. It just means that whoever I distribute - or trade for women, booze, chests of gold, fast cars, whatever - binaries to also gets the source code and the ability to do whatever they want with that source code. Nothing stopping them from turning around and selling it for even more chests of gold! The key point is that they are free to do whatever they want with the software what they want after delivery of the product, as long as they stick with the terms of the GPL.
In many open source projects, everyone can get a binary, so everyone gets the source, too.
This means there's great money to be made in producing customized software for people, scratching other people's itches, you name it. What I see open source doing is commoditizing the common tools - the compilers, the kernel, the window managers - and providing a free platform that the customized stuff can be executed and manipulated on. The customized software, or the engineers working it, is where the money part comes in for most companies, that I can see. The things that Ximian is going with gnome is part of this. I'd have no problem chucking Ximian a few bucks a month to maintain versions and dependencies so I have a up-to-date framework to work on.
There's lots of money in Free software, and it's about freedom - those who pay for software can do what they want with it. Read the GPL [gnu.org]. It is quite a departure from how things work now, though.
Re:Let me see.. (Score:1, Offtopic)
Well, it's pretty ingrained.
Catch up? (Score:1)
It lags in some areas I grant you but it isn't all catch up.
Windows Beowulf Cluster? (Score:2, Interesting)
Re:Catch up? (Score:1, Interesting)
Seriously, I challenge all to name an innovation in GNU software or the Linux kernel. Half credits for ideas well-known but not implemented outside research systems.
Re:Funny that... (Score:1)
Re:Funny that... (Score:1)
If someone else does 99% of the work, you get to take their source and charge a hefty chunk to implement and modify it -- the business model works for you.
If you are going to write the first 99% and earn little or nothing other than the thrill of development alone -- all those late nights to produce a product that will have your name on it in the source code which the users won't see or care about -- after all it's an IBM solution.
Re:Funny that... (Score:1)
Nice plan, but... (Score:2, Funny)
Phase 1: Steal the Underpants.
Phase 2: ?.
Phase 3: Profit!
That'll only work for Gnome.
Re:You guys are just too funny (Score:1)
Going with the "contradiction in terms" definition, I don't really see how any of the slashthink statements that you mention preclude the notion of making a living from open source. I think most people here would make a distiction between monopolistic and anti-competitive practices and selling expertise to pay the bills. In fact I think it is reasonable to argue that OSS presents a framework in which anti-competitive practices are impossible given the low barriers to entry to the market and the high degree of transparancy. In other words if everyone can duplicate what you are doing and see what you are doing, then you have to be competitive and good else you go out of business.
Re:Step 1 - Choose a good name (Score:2, Insightful)
Plus umm Red Hat or Mandrake arent exactly techy sounding names, if thats your criterion for investment anyways