Open source business models

Open source business models Better Software 2010 Florence, May 5/6th Speaker: Alessandro Nadalin

Who am I?  OS passionate & enthusiast  PHP developer  SEO consultant  Freelance used to work with OS products  Freelance used to give back to the OS market ✔ Member of the Joomla! Bug Squad ✔ GPL plugins for GPL softwares  Nerd ✔ Blog ✔ LinkedIN OS business models @ Better Software 2010, Florence

Reasons why I'm here  Improve consciousness about OSS power  Clarify OS can be rewarding  Proove OSdriven business models can be succesfully achieved  Florence is nice :) OS business models @ Better Software 2010, Florence

Disclaimer  Do I hate companies working with closedsource software? No, love & peace dudes. OS business models @ Better Software 2010, Florence

Table of contents  OS vs CS models ✔ Where do we get into? ✔ How do we get into?  OS case study ✔ Who's succefsully working with OSS?  OS rights ✔ We are not protected! ✔ We are not rewarded!  Hints  Cya OS business models @ Better Software 2010, Florence

OS vs CS: what can we do? 1: We sell the software, 2: We sell software support, 3: We develop/boost the software, 4: We train people for our software. OS business models @ Better Software 2010, Florence

VS1 CASE: we sell the software  CS companies are usually forced to sell their software to survive ✔ CS companies usually give trial versions for free ✔ Timelimited ✔ functionallylimited  OS companies can easily choice between: ✔ Selling the software ✔ Distributing the software freely ✔ Provide both commercial and free software versions ( functionally equal ) ✔ Provide both commercial and free software versions ( basic and enterprise edition ) OS business models @ Better Software 2010, Florence

VS1: from our POV So, image you as a startup, imagine you estimated equal revenues from both models, which one will you choose? I bet the one which gives you more freedom. OS business models @ Better Software 2010, Florence

VS1: customer's POV Imagine you as enduser, you have to choose between a trial version of software A and a community edition of software B. We (probably) don't need to discuss. OS business models @ Better Software 2010, Florence

VS1: other company's POV Imagine you as another company which needs a software which does what your software do. If you're a CS vendor running against an OS vendor that company has to choose among: ✔ Your software, that always needs your support ✔ Their software, that might need other's vendor support Is closed source software as rewarding as you thought? OS business models @ Better Software 2010, Florence

VS2: we sell software support  CS company can sell support: ✔ To the enduser ✔ To their resellers  OS company can sell support: ✔ To the enduser ✔ To their resellers ✔ To other companies Other companies can be resellers and developers: closed source software forces you to consider other companies only as resellers. OS business models @ Better Software 2010, Florence

VS3: we boost the software Let's start with a concept: 6 months of inactivity and your software is OLD.  Software NEEDS upgrades  Customers NEED enhancements Who's responsible for the delivery of all this stuff? OS business models @ Better Software 2010, Florence

VS3: boost the software  CS software: ✔ YOU  OSS: ✔ You and your customers CS clients can provide feedbacks and tests. Passive stuff. OS is the only place where the customer is active (this reminds me the agile way, doesn't it?) and interested in testing, reporting, providing patches, features and so on. OS business models @ Better Software 2010, Florence

VS3, a disclaimer... ”HELL YEAH!, I developed kicksass OSS and now I'm gonna make money with the effort of my community.” This doesn't happen all the time. But with OS can happen, with CS not. When you know you won't have any possibility, that is not FREEDOM. OS business models @ Better Software 2010, Florence

VS4: we care a lot!  CS software training: ✔ Using the software ✔ Mastering the software  OSS trainings: ✔ Using the software ✔ Mastering the software ✔ Extending the software OS business models @ Better Software 2010, Florence

Who's doing it right?  Let's analyze: ✔ Canonical ✔ Varien ✔ Red Hat ✔ Mozilla foundation ...leaving Alfresco, Atlassian, Sun and many others for your case studies... OS business models @ Better Software 2010, Florence

Canonical  Provides both desktop and server  Ubuntu  Edubunutu  Kubuntu editions while selling commercial contracts ( for technical support ). OS business models @ Better Software 2010, Florence

Varien  Provides free kickass ecommerce platform Magento CE  Sells superkickass ecommerce platform Magento Enterprise Edition ✔ Basically sells features for an already good software  Recently ( 15 March 2010 ) received a $22.5 million capital injection OS business models @ Better Software 2010, Florence

Red Hat  Provides Fedora for free while selling RHEL Althought I firstly admit Red Hat isn't the proper company to show you, we have to admit that since 1993 years RH is selling good software, keeping together a solid community helping other entities in fundraising ( CC ) instead of being the fundraiser. Red Hat is solid. That's the point. OS companies can be solid companies. OS business models @ Better Software 2010, Florence

Mozilla foundation  Not properly a company as we intend it, Mozilla's incomes are basically composed by: ✔ Fundraising ✔ General donations ✔ Partnerships Partnerships? Offers software integration: for example, Google as the default search engine of FireFox. Succesfull vertical integration.

Myths: we have no rights! Huuuuuuuge myth about OSS is that you're not protected by licenses. Commonwidelyused OS licenses like ✔ GPL ✔ LGPL are strict, when we need it. ✔ If you reuse GPL code, you must release GPL and give credits ✔ If you reuse LGPL code, you must give credits OS business models @ Better Software 2010, Florence

Still dubious? Ask Robert Jacobsen ( a single developer ) if the 100k from Matthew Katzer ( Kamind Associates ), in the next 18 months, will be a valid reason to continue developing and releasing GPL... Time's are changing: those who believe that OS is something rewardless that can freely ( free as in freedom and free as free beer ) help their commercial products risk to loose the train to the next level. OS is now a business, keep it in mind. OS business models @ Better Software 2010, Florence

Hints Maybe lots of you already know it, but I recommend you to read the guidelines of the hacking business model. OS business models @ Better Software 2010, Florence

At the end... FLAME TIME! P.S. : Feel free to contact me for discussing how much does OSS kicksass :) alessandro dot nadalin AT thegooglemailprovider dot com OS business models @ Better Software 2010, Florence

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Open source business models

by Alessandro Nadalin

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