Comments on: Open source becomes paid software in 2009

Open source struggles between being free and making money. There is a happy medium for vendors and consumers.

[Kentucky Jeepster]

I am not sure if I understand this article. From an enterprise point of view, Open Source has always been built around providing a better product that is customizable with support level equal to the amount that is desired. Red Hhat/Oracle have done a great job with Linux. Some companies have also done well with Open Office with this model.

So why is 2009 going to be different? Individuals purchasing support. Many have done this with the boxes of OpenSuse while I always make sure I purchase from Canonical plus contribute to the projects. Again, why is this different from years past?

[Cheetahjab]

Mr. Rosenberg is so stealth even he doesn't know what he's writing about. Nothing to understand... just someone elses misinterpretation of a new story

[ITRebel]

Unless it is a completely commoditized product, Freebie, Open Source software is usually worth exactly what its price tag suggests. The way to get companies to pay for software is to offer companies return on investment. They are going to have to invest in internal support and programming anyway to get any enterprise project off the ground. The cost of software is a small percentage of that total investment. That is why companies do not mind paying for software. Also, they know that the company that they are paying will be around for future developments. Mr. Rosenberg is absolutely correct.

[daverosenberg]

Let me try and clarify: there is free software and there is open source software. Sometimes they are the same and sometimes they are not. I am suggesting that next year we'll see most if not every open source vendor move toward the open-core+exclusive features.

[ITRebel]

The only caveat that I would add is that the Freebie nature of products does nothing but devalue the product and make it obvious that the only reason that somebody would want it is because of its price. Any marketing expert will tell you that the fastest way to devalue a product is to drop its price. In any industry where a product can be differentiated in terms of ease of use, time to deploy, or return on investment, these Freebies will not look very competitive when they are scaled up to Enterprise products and sold as paid software.

Wiith a commoditized product like an SQL database, the argument has been that MySQL can get away with this Freebie+exclusive model. However, MySQL was never profitable before Sun bought them this year, and there is no evidence that they will ever be profitable as a part of Sun. In fact, Sun is probably hurting much more this year because of this purchase and because of its unwise commitment to this Freebie+exclusive model.

[Alex Alexzander]

@ITRebel,

Free software does not equal worthless software. Right now any high school or college student can purchase a $450 laptop, download and install Ubuntu, OpenOffice 3, FireFox, ThunderBird, and many other apps for contact management, games, etc. That student will have an absolutelty functional machine for doing almost everything a paid-for office user needs in a professional setting, and all at no additional cost beyond the hardware.

When I was in High School, I had a Commodore 64 and MPS801 9pin dot matrix printer. And I did my word processing on that. In later years Word Perfect arrived for the Amiga and I used that. Surely Open Office 3 is superior to what I used and what I used was incredible and more than enough.

I see nothing but incredible value in OpenSource today. Ubuntu is a great operating system. OpenOffice is very good, though I do like and own MS Office and prefer it, that doesn't mean Ooo is bad. It simply means it's my second choice.

Alex

[ozicecool]

Some are trying to explain to the 'C' level managers that without the proprietary components there is no value in using the Open Source software for their organization. This does not help Open Source. Companies do have the choice of getting the open source version and create and integrate to what they want and YES they can pay a subscription to get the service directly from the company who created the product OR use an Open Source solutions provider/integrator get services. The biggest difference in Open Source is that you don't have to rely on the company who created the product to get services, development, bug fixes and even extend the functionality of the product.

In Open Source you don't need to worry about whether the company who started will survive in 10 years, as there will be other companies or communities that will continue with the products. Good open source project will never die.

Therefore my recommendation to these people are to stop saying that there is no value in an Open Source product if you don't buy the proprietary component OR to secure/protect your code (by getting an insurance or indemnity), look at ways and means of how you can help your customer and charge for your service. Not only your customer will trust you they will want you to look at how to continue to get support from you.

[ITRebel]

Oziecool, I must agree with Mr. Rosenberg that if your business model is based upon billing for support, then good luck! Once they have your source code, they no longer need your services and it is cheaper to do it internally or to outsource it to India. Profit in IT has always been based upon proprietary closed source solutions. As I said previously, MySQL was never profitable and they are the angel of the open source community.

[ozicecool]

ITRebel, thanks for your comments on my post. I disagree on you that if a company think that they cannot make money by providing support and service on Open Source. This is exactly what Catalyst in New Zealand does. They are very successful and I believe there will be many Catalyst to come in the future. While India is an option for outsourcing companies are always looking for local partners to support/services. Therefore I believe if you do the right thing customers will come and keep trusting you in what you are doing.

MySQL, Xen, Zimbra, etc may not have been profitable at the time they got acquired. However they did help the building the Open Source confidence in the Enterprise world. At the same time not all closed Software companies are profitable either only a handful were very successful. Therefore I cannot say that the closed model is always the profitable model.

As I said in my post, in Open Source it may not be the creator you profit the most. Very good example is LINUX. This is something investors and creators do need to understand.

[Pishkado]

Part of the confusion is that the word "open" is used in two different ways by different people, usually without clarifying which meaning they're using. One is that anyone can get, read and tinker with the source code. The other is that the code is written openly also, often by an host of unpaid enthusiasts. The first meaning has nothing to do with whether or not the software is free. In the second case, though, the enthusiasm of this volunteer army would disappear in short order if they perceived anyone as profiting unfairly from their work. There are variations on both these themes, but the point is that what one thinks "open source" means affects what one says about it. People may seem to disagree because unstated assumptions about what words mean hide the real issues they agree on.

It's too much to hope that everyone will use terms to mean the same thing, but we'd have far fewer disagreements if everyone would clarify what they mean by one of these terms before they use it.

[Tysaru]

Agreed. Conflating the open source (license) and the open source (development) leads to the ambiguity and arguments that really don't get us anywhere, except maybe to realize better definitions would help avoid wasting time. The same situation can happen when people use the term "free" in that it could mean free as in "no cost" or free as in "freedom" to modify the source.

In this article the author argues open source development underwritten by a for profit company (not volunteers) will shift from relying only on charging for support to that plus charging for closed versions of the software containing additional benefits and features.

Is that likely to happen in 2009? Some companies are already trying to do this.

But it remains to be seen if a company can transfer development costs for the open source (licensed) core to the volunteers. If the company can't do this, then the core+ ("exclusive or proprietary features only available when you pay") will necessarily be priced higher since the company's developers will have to spend time on the core as well as core+

I think companies that attempt to do this will have their credentials in the free software community suspended if not revoked, but they will probably still seen as members of the open source community. There is a difference, you know :)

[WeaselTheGeek]

Open-Source software is Free (as in free speech) Software, so it can never become paid. If some currently Open-Source software will ever become paid, that it won't be called like this anymore. And there's always somebody that will continue the company's/author's work, so if, for example, Sun will stop releasing OpenOffice.org and it's source for free, the community will take over the job of developing the product, eventually rebranding it, and releasing both it and it's source code for free.

[ITRebel]

WeaselTheGeek, I must say that I do not understand the mindset of those of you that are so emphatic about wanting to devalue your services with Freebie software. If you want to volunteer your time, there are many noble projects out there to help the homeless for example. Why invest your expertise in a failed business model that only serves to bring the value of your services down?

[Pishkado]

Thank you for clarifying what you mean by "open-source" software, but please don't be so dogmatic that yours is the only possible meaning - and that everyone who uses the term differently is therefore a heretic or worse. There are many possible meanings of this term, some of which have nothing to do with whether or not users of the software pay for it. Does this mean it shouldn't be called "open-source?" Only if one insists that his or her definition is the only correct one. Sounds like a religious argument to me, not a technical or business one.

[lordmorgul]

ITRebel: "Why invest your expertise in a failed business model"?

Because the world is improved at times by things that were not profitable. In fact, that is more rule than exception. The people heavily involved in free and open source software (particularly the GNU license interpretation) work on their projects for many reasons: some simply want software to do a task and nothing else 'does it right', some feel that benevolent drive to help others and make quality software available to everyone rather than just the relatively wealthy (who can afford 'valuable software'), and others like myself like to help the community in any way possible because we understand that the combined efforts of many produce something far better than a few working toward their own self-interest.

Your example of feeding the homeless as a more noble endeavor than working on software that is available to everyone... tells alot about your perspective. Giving software away for free does not 'devalue your services'; to the contrary it is very valuable to many people in the world. Your concept of 'value' is sadly lacking and depressing.

[blacksmyth2025]

"Redmonk analyst Michael Cote made the prediction that next year 'it will be cool to pay for software' and I agree."

I couldn't disagree more! I guess if you have tons of cash to throw around it might be cool to waste it, but for most people, especially the crowd open source is aimed at, finding deals or stuff for FREE is much "cooler!!" What does that even mean? You're going to be cooler if you spend more on software? I'd rather be uncool...

[ITRebel]

Lordmogul,

I hate to be a Scrooge on this Christmas day and disagree with your idealistic and well intended views, but here I go. Do you have any control over who gets your software with the GNU, as long as they abide by the GNU? What is to stop evil doers who disagree with your values from using your software? My motivation is not just profit, although I believe that there is nothing wrong with making a profit in an honest way. Yet, I also would like to deprive certain types of evil doers who do not share my values from our software. I can happily prevent them from our software; we have very been exclusive in who we let have it. The problem with your GNU/Freebie model is that if it is valuable software as you claim, then it is going to be valuable to those that do not share your values. For example, an immoral and dishonest business or country could use it in their operations to secure profit or other benefits at the expense of the larger world.

However, I question how valuable your GNU/Freebie software really is. If your software were very valuable, even with your Marxist values, you would take great pains to protect it to make sure that evildoers could not access it. In my field of advanced analytics and machine learning, anything that does not have the myriad of problems seen in the commoditized or "academic pie in the sky" algorithms written through GNU/Freebie software such as the R Language, RapidMiner, and the countless other such similar GNU/Freebie vehicles is proprietary and well guarded. Basically, the "dumbed down" stuff is what is out there for free under the GNU license. Yet, anybody who has seen the proprietary, smart machine learning work knows that the GNU/Freebie stuff is a major waste of time and resources compared to what could be done with the smart stuff. Because smart machine learning software also could be used to wreak havoc in a time of war, it is very well guarded. My point is that there are many reasons other than profit motivation to protect high level technology. If you are using the GNU/Freebie model, my guess is that your technology is very low level and not worth protecting and not very valuable. Merry Christmas.

[ITRebel]

Alex Alexzander,

Thanks for your comment. Please see my reply to Lordmogul. I would also like to add this to you. Even you admit that you prefer to use MS Office over the Freebies. Once you know Calculus, you do not use Geometry to calculate approximations to the area under the curve because you can do it exactly with Calculus. Once you have seen smarter technology, you realize that you are wasting your time and energy with the dumbed down stuff.

About the closed source nature of the proprietary, smarter technology, remember that Isaac Newton, the inventor of Calculus, kept Calculus as a secret for as long as he could because he absolutely understood the power of this invention. Newton only disclosed it after Leibniz had independently announced that he had discovered it. If you have truly valuable technology, you will keep it very closed. Open Source/Freebie Software, by definition, is not valuable technology. It is commoditized "dumbed down" software. It would be foolish for a company to invest signifcant IT resources into the Freebie software when smart and significantly better proprietary software is available.

[GuzMaan]

Changing the business modell of open source software to a pay-based one, might be a way well-established software projects with a large user and developer base can choose.

However there also might be the danger of losing one's developer community by going that route. Developer, who contributed, drive by idealistic motives likely will loose the interest in a project that changes to a pay-based modell.

Many of the famous open source products have their massive userbase BECAUSE they are free of charge and because many users refuse to pay for overpriced software with questionable value.

Developer communities thinking about going "commercial" should consider very carefully if their motives are based on greed or necessity and they should not forget where they come from and what mad them successful in the first place.

[ZUrlocker]

Dave,
good story. A couple of minor points of clarification. In the early days, MySQL did use a license + support model (primarily for OEM customers) but in the last 3 years, we added a subscription model which included more than just support. Also, it was cash flow positive as a private company (and still is) and other than the expenses incurred to prepare for an IPO in 2007, it would have been profitable.

Nonetheless, these are minor points and I think the overall point remains. I would put it slightly differently: for open source, or any technology or trend to be mainstream, it must make money.
--Zack

[ITRebel]

Zack,

I would be curious if MySQL would have been cash flow positive without the rounds of venture capital inflows. My understanding is that there were even venture capital inflows at a very late stage. Please correct me if I am wrong, but wouldn't General Motors be considered cash flow positive with the bailout money now allowing it to survive? Isn't it a requirement of any business - even if its source of positive cash flow is financing - to be cash flow positive or else it runs out of money? Once again, please correct any misunderstanding that I have, but I do not believe that positive cash flow necessarily implies a healthy business model if the source of that positive cash flow is a loan or venture capital.

[doctormo2]

Isn't is awesome how many people _don't_ get the idea of the commons and FOSS?

Instead of an opening of minds to new ideas of production, we have people trying to fit a round peg into a square hole of production. Come on guys, Open Source and Free software is about 1) Sharing production costs, 2) Sharing code liability, 3) Increasing complexity using existing infrastructural bases.

Your business should find it's in their best interest to _invest_ money into the companies that head up development of the software that they use. What already exists is free, what is yet to be developed costs a lot of money.

Once again the problem is not the model, it's the ideas in peoples heads about what it all means.

Wow, looks like we found out what side of the fence your on. So its because you can get Open Source Software for free that gets to you huh? Someone's business must not be making the money he wants it to make huh? Poor little baby...

[hiresavi2]

A bigger trend I am seeing for open source products is them offering cloud-based hosting as a value-add. While I have seen a few following the core+value model, I don't see that as such a big trend to occur in just one year, if at all. I think it's going to be about the cloud way of getting things done. Finally, we should all be moving towards the vision of computing as an utility! :-)

[JCPayne]

This article's title is making a statement. But the article doesn't back it up. Shouldn't there then be a question mark after the title since it is just speculation? E.g. like if I were to say "Whither Microsoft in 2012?" See that? A question mark would keep it from being a statement.

[TheComputerNerd]

Its interesting how everyone seems to be focusing on mySQL but ignoring company's like Red Hat who have made very good money on RHEL. As well as Google did you know that MOST of the desktop apps and software that you download from Google is FOSS (Free Open Source Software). So dont say that _all_ "Freebie" software is crap.

Everyone has made a good point and as a recent FOSS convert it is driving me crazy that some of you are being so closed minded in not understanding what some people have explained. You seem to be under the impression that just because we say "FREE" means that its crappy. You are misinterpreting "FREE". FREE does not necessarily mean that I don't pay for it, --Mandriva Linux is a good example of this-- though most of the time you do not. It means that I can do anything that I want with the code. If I am using Open Office and it does do something of have a feature that I want. I can LEGALLY add that feature. Then I can release it back to the community or sit on it.

Also just because a company that sponsors an open source project goes away or pulls their support does not mean that the product will disappear. If Canonical, Red Hat and Sun were to pull their support from their respective Open Source Products the products would not die they would be take over by the community's that already help maintain them like WeaselTheGeek said. Just because you don't pay for it does not mean it is bad software. Compare Red Hat Enterprise Linux and CentOS, basically the same thing. What about Firefox Web browser that I am writing this in, Its FOSS.

Now is still use XP its hard to play many of the games that I play without it (not impossible just hard) and if I could I would get an Xbox but that rolls us back to things being overpriced.

[bmn_1213]

This is crap, the whole point of open source is freedom.

Some people don't have access to credit cards to pay for stuff online, I remember that. When I got mine I bought lots of stuff on eBay and premium account for sites (megaupload, rapidshare) and it was cool however...