In the beginning, open source software looked like a saintly gift to the commonweal. Programmers would work hard, then give away the fruits of their labor to anyone who wanted it. Everyone would benefit from this act of pure charity. Over time, however, companies realized they could make money and give away the software at the same time. They could do how to make money using open source software by doing good. This wasn’t a shock to some of the original open source advocates — it was how some intended it to be. Richard Stallman, for one, always said that «free speech» was more important to him than «free beer. Many companies took this as a blessing to make money and serve their destiny. The smartest figured out how to use open source to strengthen their business, spread their brand, and bolster their power. Open source was not so much a charity as a different kind of marketing, a way to squeeze into the marketplace. The savviest open source devotees embrace this self-interest.
Yes, you can make money of free software
Talk about starting a business based on open source software and the conversation will inevitably shift to Red Hat. That’s because the Linux vendor is a shining example of a company that’s making money from an open source product. But how easy is it really to establish an open source startup that makes money? It’s tempting to believe that the Red Hat business model, which is based around selling subscriptions for support to a maintained and tested version of Linux or a closely related model that offers consultancy and customization to an open source software solution as well support and maintenance , is the most viable way to make money from open source software. But Sam Myers, a principal at Balderton Capital, a technology venture capital company, says that most open source startups are unlikely to succeed using these business models. Because it is head-count driven, the model doesn’t scale, and you get low renewals. And you have competition from other consultancies. Myers admits that the subscription model can occasionally be successful, but asserts that a more promising business model is to build a product line around an open source core. This can involve developing premium software modules that add features to the core open source software or, alternatively, building supporting applications that complement the core. Another open source startup business model involves offering hardware that is suited to the software in the way that Digium sells telephony hardware to run the open source Asterisk telephony software. But Myers warns that this model can be difficult to sustain because customers typically only buy the hardware occasionally. Instead, he recommends looking for a business model that produces a recurring revenue stream. These can include offering open source software as a service or charging for API use in addition to selling premium modules or supporting applications as mentioned above. What quickly became apparent from speaking with Myers is that there is no «best» open source business model, and Allison Randal, president of the Open Source Initiative, says that open source startups should avoid searching for one. They should be thinking about a business model and how open source software fits into that,» she says. A defining feature of many open source projects is the community that surrounds them, and there is always a danger that a company seeking to make money from open source software may alienate that community. That’s because members of the community may feel that their volunteer efforts are being exploited for someone else’s financial gain. So how much consideration should open source startups give to the project’s community? In some instances, like when a company provides almost all of the code commits to a project, Myers says that not much consideration needs to be given to community. In some cases, something needs to be open source so that companies that use it don’t have to be worried about vendor lock in,» he says. But in many cases there are great benefits to be had from adopting a business model that involves fostering an active community. Myers warns that communities don’t just spring up and thrive by themselves though, so it’s vital for an open source startup to spark interest in the community through marketing and communication. Avoiding alienating the community in the way that Cyanogen Inc. What kind of marketing and communications are necessary? Alex Freedland, CEO of Mirantis, a company that has built a business around the open source OpenStack cloud operating system, says that to foster widespread adoption of an open source product you need an ecosystem around it, and to get that you also need a strong community.
Paid support
A guide on how to evaluate the long-term sustainability of the business behind any open-source software you are using or considering working on yourself. Article co-authored by Mike Freedman. Interested in helping us build the next great open-source company? Timescale is hiring! As open source software becomes more and more popular , one of the most common questions we hear is: How do these projects make money? All are variations of the same straightforward question. But the answer is complex, and quickly evolving. Here are over 30 of them. In this article we describe that common pattern by sharing 5 business models these open-source software companies use to make money. If you are adopting open-source software in your own company, or working on an open-source business of your own, or even just considering working for an open-source startup, understanding these business models will help you evaluate not just the software, but also the long-term sustainability of the business behind that software.
Yes, you can make money of free software
There is a common misconception that there is no money to be made in open source software. It is true that open source code is free to download, but you should think of this as an opportunity rather than a limitation. A sophisticated open source application like Zimbra may be free to download and install, but it is a complex piece of software.
Setting it up requires expert knowledge. Maintaining the server over time can require someone with know-how. Who better to turn to for this kind of support than the people who created the software? Many open source businesses sell their own support services and contracts. Much like commercial software support, these service contracts provide varying levels of support. You can charge the highest rates for immediate phone support and offer lower rate plans for slower email-based support.
Although the basic open source software may be free, you can create and sell add-ons that provide additional value. For example, the open source WordPress blogging platform includes support for themes or visual layouts. Many free themes of varying quality are available. Either the original creators or third-parties can make and sell enhancements for open source projects, making this option a great opportunity for making money.
Some software projects are difficult to use without documentation. Making the source code available at no cost does not obligate you to give away the documentation. Consider the example of Shopp, an e-commerce plugin for WordPress. Shopp is an open source project, but to access the documentation you need to pay for a license that provides entry into the website.
It is possible — and perfectly legal — to set up a Shopp store using the source code without documentation, but it takes longer and you won’t know all the features available. Even if you did not create how to make money using open source software open source software, you can author a manual sharing your expertise and then sell that book either through e-publishing channels or traditional book publishers.
Open source code is just that — source code. It must first be compiled into what is called a binary or machine code. Binaries are specific to each operating. Depending on the source code and the operating system, compiling into binary ranges in difficulty from easy to difficult. Most open source licenses do not require the creator to give away free access to compiled binaries, only to the source code.
While anyone can download your source code and create their own binary, many people either don’t know how or won’t want to take the time. If you have the expertise to create compiled binaries, you can legally sell access to these binaries for different operating systems, like Windows and macOS.
Sell your own expertise. If you are a developer with experience installing or customizing any open source application, then you have marketable skills. Businesses are always looking for project-basis help. Sites like Elance and Guru. You do not need to be the author of open source software to make money with it.
Share Pin Email. Aaron Weiss. Updated November 30, Businesses that make money in open source software include:. Continue Reading. Learn about using open-source software for desktop publishing from Dan Fink.
How to Build an Open Source Business
How do Open Source Companies and Programmers make money?
Comment 0. Open source is a sourcf business model: first, you give away the crown jewels, then you try to get some money. I have been working on OSS projects for close to twenty years. I have been making my living off of OSS projects for softwaare of that time. It is a very interesting experience, because of a simple problem. After you gave away everything, what do you charge for? I wrote this post because of this article and this tweet. The article talks about the Open Core model and how it usually ends up. The tweet talks about the reaction of some people in how to make money using open source software marketplace when they are faced with the unconscionable request to pay for software. If you need to do deployment multi-platform, Docker, K8s. If you need to support multiple versions There is also the website, graphics, GDPR compliance, and a dozen other things that you have to do if you want to go beyond some code on GitHub repository stage.
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