Instead of prevaricating around the existing business models that are prevalent and practiced at large, when it comes to open-source software, I intend to explore another dimension of it. Conventional approaches leave the open-source business model struggling to monetize or be a “pseudo-open source” company with monetizing methods that prevent real access in practicality. A company relying on donations or subsidiary forms of income such as training, may not be able to sustain long term, as it may spend the corpus to keep it running to exhaustion, in most cases funding arriving a little too late. Most open-source companies that survive today, are with the backing of heavily funded supporters. (...)

1. Shivaa Rajesh
Developing a new micro
business and Economic
model for open-source
software

2. The time is ripe
Reason
01
Reason
03
Reason
02
Reason
04
OSS have
sustained the
ordeal of
competition
with
commercial
companies
OSS are
entering
every vertical
and are
getting more
prevalent
Small OSS
start ups
have ideas
and potential
to create
better
products
The OSS
space is
heading to
be a
disruptive
phenomena
OSS-Open-Source Software

3. Why is it essential
Business innovation creates
an ecosystem of collateral
opportunities for everyone
To encourage
constructive competition
in the IT space
Technical Innovation is
impeded without monetary
incentive
To allow for long
term sustainability
of OSS start-ups

4. A third party company
uses the OSS to create
an offering that is
monetizable
USE
OSS
provider
Outside
Company
OSS
Revenue
The Model
OSS-Open-Source Software

5. • Definition of controlled distribution and
redistribution methods, of the OSS to
ensure tracking of usage
Distribution model
• Definition of the business specific
parameter's indicative of revenue or usage
• Definition of business specific thresholds of
the usage parameters and the time when
the profit sharing must start and end
• Profit sharing percentage
Economic model
• Extent of responsibility
• Disclaimers
• Rights of replication
• Rights of redistribution
Legal framework
Intellectual Property
Considerations
• Ownership
• Licensing models

6. Thank You

7. Instead of prevaricating around the existing business models that are prevalent and practiced at large, when it come to
open-source software, I intend to explore another dimension of it. Conventional approaches leave the open-source
business model struggling to monetize or be a “pseudo-open source” company with monetizing methods that prevent real
access in practicality. A company relying on donations or subsidiary forms of income such as training, services or open core
may not be able to sustain long term, as it may spend the corpus to keep it running to exhaustion, in most cases funding
arriving a little too late. Most open-source companies that survive today, are with the backing of heavily funded
supporters. Alluding to the model I perceive, a crazy sounding one perhaps, is the model of profit sharing post the first
year or post the pertinent time frame. An open-source software provider may allow free usage but will have rights to a
part of the profit, however small, after a certain indicator of performance has been met. This allows the user to make a
positive balance before being burdened with the cost of the open-source product. The performance indicator could be
defined specifically for the type of business and the type of software, it could perhaps be a monthly turnover or daily
traffic etc. The ability to have direct monetary return on a product is most important to motivate its improvement and
more importantly sustain it. The model proposed can simply be executed by means of a modified form of contingent
contract. The challenges however would be effective disbursal of the open software, not having it available openly but
only through request, and then prevention of unauthorised replication. A possible solution could be, to have a global list of
applicable parameters which demonstrate the liability of a company after using the open-source software and making a
certain revenue out of it. Such an approach is sustainable at both ends, if the product is used and the company fails to
make a profit on it, they are not liable to pay. Such freedom from liability will motivate higher number of businesses to try
and proceed with the open-source offering as a base, therefore a higher volume of businesses will be created. Other
aspects of this model remain open and will be disclosed during the discourse Why is it relevant? Most business models are
either “pseudo-open-source” or craving for philanthropy and therefore unsustainable. It is essential to explore all options
to see viability and this may perhaps be one such idea.
Summary