This document provides an overview of open source software business models. It discusses common models such as donation-based, free basic software with paid extras, dual licensing, and generating revenue through sales. It also covers exiting a business through acquisition or IPO. The document outlines the basic building blocks for creating an open source software company, including business planning, marketing through word of mouth and blogs, sales/distribution, bootstrapping finances, distributed operations, and using free/paid human resources.

1. AN INTRODUCTION TO OPEN SOURCE SOFTWARE BUSINESS MODELS PRADYOT SAHU

2. 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.

3. OSS Business Models - Contents Donation Free Software, Paid Extra Dual Licensing ----------------------- Money Generation thru Sales ---------------------- Some other models ----------------------------- Exit by Sales Exit by Stock Market Listing

4. 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

5. 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)‏

6. 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.

7. 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

8. 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)‏

9. 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

10. Open Source Software Company basic building blocks - Contents Business Plan Marketing Sales Finance Operation Human Resource

11. 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

12. 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

13. 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

14. 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

15. 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

16. The Human Resource Free resources for software development, documentation, architecture and may be Project Management Free/paid part-time resources for office operations in single or distributed locations Paid full-time resources for office operations in single or distributed locations

17. QUESTIONS ?