Is it possible to make money off of foss?

[kevin11951]

Lets say a company wants to create open source software, and sell it... will that company still survive?

What I'm trying to say is, can a company really make money off of something if they need to release the source code to it, which will allow other companies to come up with something better.:confused:

Great for the consumer, not so great for the business!:)

[p_quarles]

Google
IBM
Red Hat
Novell
Sun Micro Systems
New York Stock Exchange
OSS-based businesses are doing okay for themselves, it seems.

[kevin11951]

Google
IBM
Red Hat
Novell
Sun Micro Systems
New York Stock Exchange
OSS-based businesses are doing okay for themselves, it seems.

that doesn't count, im talking about a brand new company that has no market share from previous investments, like nvu.com (http://www.nvu.com) making as much money as dreamweaver!?

[k2t0f12d]

that doesn't count, im talking about a brand new company that has no market share from previous investments, like nvu.com (http://www.nvu.com) making as much money as dreamweaver!?

Like absolutely everything else, you either better be doing something new and different that is of extraoridinary use to people, or, do something that is already needed better then it is currently done.

I recommend the former.

[starcannon]

Don't forget :


Crossover
Cedega
VMware

[Whiffle]

that doesn't count, im talking about a brand new company that has no market share from previous investments, like nvu.com (http://www.nvu.com) making as much money as dreamweaver!?


Where do you think google started?
http://www.google.com/corporate/history.html


2 grad students with a smart bit of search software. Doens't get much lower on the pole than that.

[p_quarles]

that doesn't count, im talking about a brand new company that has no market share from previous investments, like nvu.com (http://www.nvu.com) making as much money as dreamweaver!?
A "brand new company that has no market share" is a pretty accurate description of Microsoft in 1985. :)

[DoctorMO]

The questioner is misinformed.

Your business in the software world is not based on your boxed sales of pre packaged binary code. This is a business model that Microsoft has been championing ever since the famous letter by Bill Gates exclaimed how the software world should get out of peoples basements and bedrooms.

The real business is not in what you have written (past tense) that you should give away because you have already written it, it's old news. What you should be selling is your position and competence in support that project and application with both end user support contracts, business contracts and more importantly further development projects.

Most software businesses do not make pre packaged software, in fact very few other than games and Microsoft have ever made such a thing. Most software development is between businesses for b2b software projects. These projects benefit greatly from open source as it gives you a place to start from.

[k2t0f12d]

The predication is apparent in the wording of the question. You cannot make money off free software, but you can make money with free software. Only proprietary developers try to make money off software, if that wording is even valid under any circumstances.

[popch]

The predication is apparent in the wording of the question.

Not so.

The title of the thread names FOSS while the wording of the OP only mentions disclosing the source code. Even if the title did match the intended question more closely than the wording of the OP, there still would be some debate about the meaning of 'free' in that context. As some will be quite quick to point out, 'free' does not have to mean 'free or charge' or 'without paying'.

If you take the OP's intent at face value, you should probably read it as 'what business models could conceivably work with disclosed/given away/freely re-publishable software'. I find that question far from simple and far from answered within this thread.

[hyper_ch]

I don't think you can make money by giving your work away for free ;)

[k2t0f12d]

I have no idea what you are talking about. My point had nothing whatsoever to do with the meaning of FOSS. The words "off of"' in the OP suggest something slightly different then the same question if asked with the word "with".

[k2t0f12d]

I don't think you can make money by giving your work away for free ;)

There is a difference between getting paid for work and getting paid for permission to use a copy of the fruit of your work. You can think that all you want, but you are wrong, because people are presently writing and maintaining free software and being paid for their work.

[popch]

The thread is not about how programmers live when the programs they write become disclosed or are given away.

The OP asked how a company can work (keep on living, if you accept the verb 'to live' in that context) if it discloses its source code or gives away the software.

The answers given so far - if pertaining to the question at all - appear to be that most companies doing so
(a) either live from services and their software sales are obviously not central to their business models
(b) or they disclose/give away some of their software products and sell others.

What's apparently not answered yet is wether a startup could begin a business by open sourcing its first and only software product. Does anyone know an answer to that one?

And yes, if anyone thinks the question is asked the wrong way, please keep on feeling free to tell us so.

[gn2]

Wonder if Canonical (http://en.wikipedia.org/wiki/Canonical_Ltd.) actually make money from FOSS yet?

[popch]

I don't think you can make money by giving your work away for free ;)

I am now somewhat confused. You appear to be saying (here) that you can not live from making software which you give away for free; in another thread you appear to be saying that you can live from making music which you give away for free. Or am I misunderstanding you by thinking that people who make music ought to be able to live from doing that?

[hyper_ch]

I am now somewhat confused. You appear to be saying (here) that you can not live from making software which you give away for free; in another thread you appear to be saying that you can live from making music which you give away for free. Or am I misunderstanding you by thinking that people who make music ought to be able to live from doing that?

Not everything is what it appears to be ;)

This was meant ironically here, after some nice examples have been given like Google et al.

[lyceum]

Novell came from somewhere, they and Red Hat started by making money off FOSS. Aptana is a relatively new program making money off of FOSS. Nvu gave up, from what I understand, so I do not think I see loads of money there. A couple of Drupal developers wrote a book on the program, making some money there. I have heard that Canonical has started making money, but not a lot yet. At the rate they are going, they should be seeing money soon. There are at least 2 major PC manufacturers selling Ubuntu laptops, Dell and Acer. I do not know much about the Acer angle but Dell sells Canonical support, which I know that one of my friends bought when she bought her laptop.

My 2 cents: build a program, set it free. add upgrades as you want or other developers want. If non-developers want to to add something they need to make a donation. Write a book if the program gets big enough and make it better than any other books that might be written.

[k2t0f12d]

The primary distinction has already been made, and is abundantly self-evident through example like Google. Google doesn't make its money primarily by distributing the programs they write. They primarily do so by using free software they have written or adapted to provide useful services for others.

While you can make money from the program itself, if you confine yourself solely to the idea that you should be able to write any ole program and earn a living selling copies of it you are missing the opportunity free software is providing. Most of the largish free software companies do not distribute or maintain only one program, and the largest only incidentally distributes anything at all.

[Sporkman]

My 2 cents: build a program, set it free. add upgrades as you want or other developers want. If non-developers want to to add something they need to make a donation. Write a book if the program gets big enough and make it better than any other books that might be written.

Write & give away software, with the aim of making you more competitive in a future book sales prospect..? Not exactly a great incentive to work hard to create good software.

[az]

Write & give away software, with the aim of making you more competitive in a future book sales prospect..? Not exactly a great incentive to work hard to create good software.

Correct. That's the freeware business model. F/LOSS is a lot different than freeware.

The business model for F/LOSS is not by selling your product, but by selling support and services.

You don't get paid for selling your code, you get paid for writing it.

Code only has value for a very short period of time. There is more value in securing a person to keep writing code than to keep paying (praying) for new code.

[Sporkman]

I see FOSS as either philanthropy (as in the case of the community's efforts), or as a loss leader in the business world. In business it's a loss leader in that you sell something at a loss (or give it away), with the objective of bolstering sales of other higher margin products or services. Like wireless companies giving away phones (while roping you into lucrative contracts), medical equipment companies giving away blood sugar testers (so as to sell you the testing strips), and pet shops giving away puppies & goldfish (to sell you food & equipment).

However, this loss-leader approach isn't going to be applicable or effective for every business scenario.

[p_quarles]

I see FOSS as either philanthropy (as in the case of the community's efforts), or as a loss leader in the business world. In business it's a loss leader in that you sell something at a loss (or give it away), with the objective of bolstering sales of other higher margin products or services. Like wireless companies giving away phones (while roping you into lucrative contracts), medical equipment companies giving away blood sugar testers (so as to sell you the testing strips), and pet shops giving away puppies & goldfish (to sell you food & equipment).

However, this loss-leader approach isn't going to be applicable or effective for every business scenario.
So Red Hat's one and only profitable product is a loss-leader?

[phrostbyte]

I think you can make money but not as much. I think copyright law needs to be reformed to make open source more profitable, because the way people make money with copyright is to control how people use their stuff, and the point of said stuff is to get people to use said stuff (to increase the "value" of the science and arts"), they are almost in conflict with each other. Copyright just doesn't seem very efficient way of producing software or media.

So basically we should try to reform laws around making sharing profitable. I think this will happen as open source becomes more mainstream.

[Sporkman]

So Red Hat's one and only profitable product is a loss-leader?

Their product is support & the assurance of quality and future stability. Companies don't buy Red Hat linux for linux, they can get that for free. Sure, technically they're paying for the software, but it's not the software itself that represents the value. You could similarly rearrange the free cellphone & non-free cellphone contract, and say that when you're paying for the contract, you are also paying for the cellphone.

Loss leader, yes.

[popch]

... You could similarly rearrange the free cellphone & non-free cellphone contract, and say that when you're paying for the contract, you are also paying for the cellphone.

Which is exactly what you do. You pay for the phone. Who else if not you?

[gnomeuser]

Sure you can make money.. E.g. Red Hat probably the longest existing Free Software vendor (and one of the biggest FLOSS investors) have been turning a profit since 2001. Not only that, Forbes.com ranks them as the 11th fastest growing Tech Industry stock.

It's perfectly possible to release your products from the word go under a FLOSS license, plenty of businesses do this today and has done so for years.

Openimus, Imendio, Collabra, OpenHanded and Fluendo spring to mind just thinking 5 secs about businesses in the GNOME sphere.. we could do the same for the kernel, KDE, the toolchain. Tons of people build a business around giving their software away and earn a decent and respectable living that way.

[Sporkman]

We have to make an important distiction re Red Hat however; They did not have to shell out the time & money to develop the bulk of linux, it was done for free & given away by volunteers. If they had to spend the resources developing their own OS, they probably would not be anywhere close to profitable.

[p_quarles]

Loss leader, yes.
In my mind at least, a loss leader is something that is sold at a loss. Red Hat Enterprise Linux -- whether you define the product as the software or the support -- is sold at a price which is higher than the cost of production (hence the profit).

[Sporkman]

In my mind at least, a loss leader is something that is sold at a loss. Red Hat Enterprise Linux -- whether you define the product as the software or the support -- is sold at a price which is higher than the cost of production (hence the profit).

You are right, and I have reconsidered my argument. A loss-leader would have to be something that does not require a purchase of the more profitable component. I think some of Sun's FOSS products (like OpenSolaris..?) may count as loss leaders, however.

Red Hat can sell FOSS at a profit because they didn't pay to develop it (though they do add value to it is my understanding).

[az]

Red Hat can sell FOSS at a profit because they didn't pay to develop it (though they do add value to it is my understanding).

Apples and oranges. You can't compare the proprietary business model to the F/LOSS business model. They are not the same game. They don't have the same starting point nor do they have the same goals. They don't even sell the same thing.

In FLOSS, every single user who obtains your software is a potential customer. In proprietary business, they are pirates or they are a source of loss - they take away rather than add to your bottom line (not considering people who actually bought the shrink-wrapped box, obviously, but those who got the software without paying for it or bought it at your loss).

So, can you create an open source project and make money from it? Of course.

Does that mean that you are giving away your business by releasing code? Not if your business is something other than the code.

[23meg]

We have to make an important distiction re Red Hat however; They did not have to shell out the time & money to develop the bulk of linux, it was done for free & given away by volunteers. If they had to spend the resources developing their own OS, they probably would not be anywhere close to profitable.

Red Hat has invested huge amounts into actually developing FOSS. A lot of the components that you're using as part of Ubuntu have been developed by people paid by Red Hat.

[Sporkman]

Red Hat has invested huge amounts into actually developing FOSS. A lot of the components that you're using as part of Ubuntu have been developed by people paid by Red Hat.

Perhaps but I'll bet you the amount they've invested is a small fraction of the total amount of work that has gone into the product it ships.

[k2t0f12d]

A lot of the components that you're using as part of Ubuntu have been developed by people paid by Red Hat.

i.e. The GNU C libraries, which comprise one of the three the most critical software components of the GNU operating system.

Does that mean that you are giving away your business by releasing code, not if your business is something other than the code.

Holy crap, somebody gets it!

[az]

Perhaps but I'll bet you the amount they've invested is a small fraction of the total amount of work that has gone into the product it ships.

So what?

[Sporkman]

So what?

It's not an example of a business writing software, FOSSing it, then subsequently making a profit.

[ubuntoy]

Lets say a company wants to create open source software, and sell it... will that company still survive?

What I'm trying to say is, can a company really make money off of something if they need to release the source code to it, which will allow other companies to come up with something better.:confused:

Great for the consumer, not so great for the business!:)

because open source business is more on service rather than retail.

[k2t0f12d]

It's not an example of a business writing software, FOSSing it, then subsequently making a profit.

Firstly, what makes you think that writing and maintaining glibc doesn't count as writing free software and profiting because of it. Without glibc, the GNU operating system that RHEL is based on would be in serious serious trouble.

Secondly, if you confine yourself to the narrowest application of programming as a profession, the likelihood that you will turn profitable under any business model is sketchy at best, which is why most software development goes into custom software.

Lastly, selling licensed information in the form of computer software that drives the technology that increasingly controls every human life with a business model based on forced coercion is wrong. It consolidates power vertically, proportionate to wealth, and tramples human rights.

[az]

It's not an example of a business writing software, FOSSing it, then subsequently making a profit.

It isn't?

And while I have you on the topic, code reuse is one of the benefits you get from F/LOSS. It is an advantage to both the developers and the end-users. It's also very impractical to do in the proprietary world without spending more money on lawyers than on developers.

[forrestcupp]

Is it possible for a freelance developer that doesn't have a programming job with a company to make money off of FOSS?

[az]

Is it possible for a freelance developer that doesn't have a programming job with a company to make money off of FOSS?

Yes. I do. I put together ubuntu-rescue-remix, a data recovery toolkit, released it and maintain it. I use it to provide data recovery services. I get paid for my services.

Although I am barely an example of a developer, it is what you describe.

[forrestcupp]

Yes. I do. I put together ubuntu-rescue-remix, a data recovery toolkit, released it and maintain it. I use it to provide data recovery services. I get paid for my services.

Although I am barely an example of a developer, it is what you describe.

Ah. This is why all along you have been saying you can get paid for services other than the code you write.

[az]

Ah. This is why all along you have been saying you can get paid for services other than the code you write.

Sure, but you can also get paid for writing code.

For example, it may be worth it for me to pay someone to add extra functionality to the Rescue-Remix, something that I couldn't do myself. In that case, the service that I would pay for is the service of writing code, but the code itself is not the product.

[forrestcupp]

Sure, but you can also get paid for writing code.

For example, it may be worth it for me to pay someone to add extra functionality to the Rescue-Remix, something that I couldn't do myself. In that case, the service that I would pay for is the service of writing code, but the code itself is not the product.

There should be some kind of bulletin board where people post about projects like this that they are willing to pay for.

[23meg]

Is it possible for a freelance developer that doesn't have a programming job with a company to make money off of FOSS?

Richard Stallman is said to have made quite a fortune with gcc.

[macogw]

Moving to Recurring Discussions

[Sporkman]

It isn't?


Not really - RH is partially repackaging an existing, free product (while also adding their own value, hence the "partially). The existing free product was philanthropically donated, not paid for.


And while I have you on the topic, code reuse is one of the benefits you get from F/LOSS. It is an advantage to both the developers and the end-users. It's also very impractical to do in the proprietary world without spending more money on lawyers than on developers.

Good point - I guess the FOSS model does allow cross-organizational code reuse, which to an extent translates to more efficiency than the proprietary model.

[az]

Not really - RH is partially repackaging an existing, free product (while also adding their own value, hence the "partially).


I don't see your point. So what?



The existing free product was philanthropically donated, not paid for.



I don't think the software was philanthropically donated. It was developed in a collaborative manner.

The code itself is usually a by-product of someone who needed to solve a particular task.

There can value in paying for some software to be written even if you end up releasing it as free-libre code. I reckon the majority of kernel and toolchain hackers are full-time employees of someone who has a vested interest in making sure that some part of the linux kernel or toolchain works for everyone.

Unless someone wrote the code for no other reason than to donate it, I don't think you can call that philanthropy.