Oss Business Models

AN INTRODUCTION TO OPEN SOURCE SOFTWARE BUSINESS MODELS PRADYOT SAHU

An Introduction to Open Source Software Business models

An Introduction to Open Source Software Business models.

How open source software companies are created and run.

The basic building blocks of an open source software organization.

OSS Business Models - Contents

Donation

Free Software, Paid Extra

Dual Licensing

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Money Generation thru Sales

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Some other models

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Exit by Sales

Exit by Stock Market Listing

OSS Business Models-Main

Donation

Individual,

NPO,

Corporate

Free Software, Paid

Customization

Support

Training

Implementation

Dual Licensing (MySQL, Alfresco)‏

Free Licensing Version

Paid Closed Source Licensing Version (Features/Performance)‏

Paid Customization

Paid Support

Paid Training

Paid Implementation

Money Generation thru Sales Models

Paid CD/DVD software distribution (Shipping and Handling charges)‏

Paid Online or CD/DVD Tutorials

Paid Training and Seminar fees

Sell subscriptions for online accounts and server access.

Advertising Sales (Google planning for Android)‏

Some More Models

Just Sell OSS commercially. (no dev)‏

Offer commercial technical support contracts and services (no dev) .

Attract customers by free open source edition, then up-sell to a commercial edition.

Have open source software in your portfolio to attract customers for other commercial solutions.

Offer open source software in source code only, executable binaries to paying customers only.

Latest version available only to paying customers.

Offer commercial extensions/modules/plugins/add-ons to your open source software.

Commercial version to finance development of the free version.

OSS Business Models - Exits

Exit by Sales

MySQL to Sun Microsystems with $1b

Project Management Software, OpenProj to Serena Software

Exit by IPO/Stock Market Listing

such as Red Hat in NYSE

Open Source Software Company Creation

Group of individuals connected thru Internet (start a project in Sourceforge.net and get people on board who may be just looking for what opensource software available)‏

A non-profit organization (such as Apache Foundation) plus a group of individuals in different locations

A for-profit organization in different locations (Red Hat)‏

A non-profit consortium of companies (partially Open Handset Alliance of Android mobile OS)‏

Corporate Organization running Open Source Initiative (Sun Microsystems, Microsoft, Intel)‏

How to get people to start a company

Personal and professional contacts

Open Source Hosting such as sf.net

Blogs

Wiki

Mailing lists/Groups (such as yahoo/google)‏

Social Networking Sites and their Groups

Free PR such as News

All these need a few committed and dedicated individuals

Open Source Software Company basic building blocks - Contents

Business Plan

Marketing

Sales

Finance

Operation

Human Resource

The business plan Written or unwritten business plan, but Clear Objective Shared Vision Clear Commitment No 20 or 60 page business plan 2 page business plan and 10 slides Presentation is good enough

The Marketing

No Marketing Agency

No High cost market research

Word of mouth – real word of mouth, blogs, social networks, groups, wikis (ALL free)‏

PR by making news –

Internet publications,

Print media publications,

Hardware and Software vendors may aid distribution to their customers which includes marketing/PR

The Sales and Distribution Channels

Free Mirror Sites (of Universities etc)‏

Free Internet download of Free Version

Paid Internet Download of the Paid Version

CD/DVD sales (with shipping/handling charges PLUS extra)‏

Free or Paid Licensing(or Donation) of Software/Hardware Distributors (Like EEE PC) for Free Software

Paid Licensing of Software/Hardware Distributors for Paid Software

The Finance – Startup Capital

Part-timers working for free with separate full time Job

Bootstrapping (with Some Services Sales)‏

Donation (individual/ corporate donation)‏

Angel Donors/Angel Funders (with equity)‏

Venture Capital/Private Equity companies rarely fund in established Open Source Organization with Good Exit possibility by Sales/IPO

The Operations Internet Distributed Development Distributed Project Management distributed marketing/ sales Wiki Blogs Free or paid Software-As-A-Service for operations and project management

The Human Resource