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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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