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View Full Version : [SOLVED] How to make money from Open Source



squrl
December 24th, 2006, 12:47 AM
Just as a curiosity thing. The linux world touts "free" I just read a piece about redhat having a drop of x % this year to something over a hundred million bucks in profits.

How do you make that kind of money if it is in fact free. Where do they make their money. ????

This can't be donations. They don't sell the source code. Where did they get this hundred million????

Thank you

qamelian
December 24th, 2006, 12:50 AM
Free means freedom to use, distribute, manipulate the software. It does not mean that you can't charge for it.

23meg
December 24th, 2006, 12:52 AM
Where did they get this hundred million????From support.

squrl
December 24th, 2006, 12:53 AM
Fine "free to use" With as many places as it is available to download or buy the discs for next to nothing why would someone pay for it. I understand donations to a particular project but a hundred million is a lot of "charge for it"

Bachstelze
December 24th, 2006, 12:55 AM
With as many places as it is available to download or buy the discs for next to nothing why would someone pay for it.

Because they want/need comercial-quality support, additional features... Canonical sells commercial support for Ubuntu, too.

qamelian
December 24th, 2006, 01:00 AM
Fine "free to use" With as many places as it is available to download or buy the discs for next to nothing why would someone pay for it. I understand donations to a particular project but a hundred million is a lot of "charge for it"

Some folks pay for a distribution for the printed manuals that often accompany them. SuSE and Mandrake/Mandriva both use to provide great manuals to get you started. They were a gfreat resource for newbies.

And has already been said, the distro providers charge fees for various levels of support. Without paid support, it's unlikely that Linux would have made some of the corporate inroads that it has.

Tomosaur
December 24th, 2006, 02:21 AM
I don't think you understand the meaning of 'free' here. It doesn't mean 'you don't have to pay for it', it means 'you can do what you want with it'. Yes, it's true that most linux distributions do not charge, but they could if they wanted to. Most people who create linux distributions do so as a kind of hobby, rather than a job.

Big linux vendors make their money selling support to companies, who use linux on lots of computers, and require specialist commercial software etc. They are required by the GPL to make the source code publically available, but they do not need to give their version of linux away for free. Generally, they will charge for things like setup, training, and help/support if things go wrong. Most companies will agree to pay for this help and support, because their employees aren't paid to learn linux, and may not know how to solve a problem if something goes wrong. By buying support from a linux vendor, they have some guarantee that they won't be out of action for very long.

squrl
December 24th, 2006, 02:23 AM
Thanks,

That answers a lot of questions.

az
December 24th, 2006, 02:33 AM
You can't use Red Hat without buying it. They cannot distribute it, however, without providing the source code under the GPL.

CentOS takes the source code and distributes binaries for free.

You have to buy Suse and a few other linux distributions as well. Ubuntu is both free as in software freedom and free of charge. The different approach of making the community the priority seems to have paid off in making Ubuntu the most popular linux distribution. I think it will also pay off in the monetary sense in the longer term too.

The software is excellent because of the community of users and developers who make it. Distributing an operating system based on this community, but putting your clients first takes a toll on the momentum you can build around your project. You are limited.

Putting the community first probably takes a lot more effort to start up, but you are not limited by a single demographic's needs to stimulate your community.

NewbieLearnLinux
December 24th, 2006, 02:54 AM
There are many licenses for open source software (better saying, free software). Most of them encourage you to earn money from free software, not to avoid it.

Tomosaur says it all ^_^ .

thomashauk
December 24th, 2006, 03:00 AM
Oh and techically they could refuse to give the source code to anyone but those whom bought their products.

The fact that they give the sources for free is just them being nice... and avoiding getting winged at.

But yeah its support, boxs sets and business in general.

chrispche
December 28th, 2006, 07:13 PM
One thing thats niggling me. How can Ubuntu send out free shipit CD's and keep up the cost. You can download for free, you can obtain applications for free, you get free updates. They have several domains and websites dedicated to Ubuntu. Who or what is funding all this? How long can Ubuntu keep this up? Curious thats all.

meng
December 28th, 2006, 07:21 PM
You'll have to ask Canonical about their business model, with respect to the ShipIt CDs. As for the rest, all that is required is are webservers (multiple, for mirrors) and this is standard for other Linux distributions which don't have corporate backing.

Tomosaur
December 28th, 2006, 07:48 PM
Canonical is not a 'not-for-profit' organisation - it does actually sell services such as support and whatnot. Ubuntu would not exist where it not for the generosity of Mark Shuttleworth, who is a self-made millionaire and seems to have plenty of money to throw around. Ubuntu itself does create money for Canonical - Canonical offers support - at a cost - for organisations who want to use Ubuntu. This business model is similar to a whole host of companies.

Oh - and the software in the repos is generally nothing to do with Ubuntu. It's (generally) not made by the Ubuntu developers, although they do dip into the code from time to time to make things work smoothly, which is basically due to the open-source model. The people behind the Ubuntu-specific coding are not paid, as far as I'm aware, although I do seem to remember they do get money from time to time as an 'incentive' when something needs doing fast. I may be completely wrong there though, so don't quote me on that.

And then you have the open-source philosophy itself. Many people just do not want to be paid for their work, and others develop software as a hobby. The GPL encourages free development, but does not require it. People can sell their software if they feel like, but if they release under the GPL, they have to open up the source code.

maxamillion
December 28th, 2006, 07:53 PM
In respect to "how do we get free software and updates" ... well, that's what the entire concept of open source software is. While it remains free to the user, its source code is also free to a fellow developer who might want to add a feature, fix a bug, etc.... the community at large keeps it running but yes, we do owe a large dept of gratitude to Mr. Shuttleworth for everything he has done for the advancement of so many aspects of GNU/Linux and debian/ubuntu

raul_
January 4th, 2007, 12:16 AM
Ever wondered how open source companies make money? Maybe this article will help:

http://www.builderau.com.au/strategy/businessmanagement/soa/How_to_make_money_from_Open_source/0,339028271,339191343,00.htm

aysiu
January 4th, 2007, 01:47 AM
Ever wondered how open source companies make money? Maybe this article will help:

http://www.builderau.com.au/strategy/businessmanagement/soa/How_to_make_money_from_Open_source/0,339028271,339191343,00.htm
Thanks for linking that article. I've merged this with some other threads on the same topic.

Frak
January 4th, 2007, 02:28 AM
You can get Red Hat for free, but it won't be called Red Hat, it will be called White Box Linux, since the source code is free, anybody can take the source code and develop it themselves, White Box is not developed by the Red Hat developers, but by a voluntary team of people, you just don't get the applications, support, or gauranteed stability, but instead a development peice of software, but if you just need something to work like Red Hat, White Box and Fedora are good candidates.