How do people make money with free software?

[commodore]

I'm just 14 so I can't figure out how do people make money with free software. I don't see too much commercials/ banners stuff. Does donating bring in a lot of money? Do free software developers have two jobs?

[Schmots]

haha a commodore 14.. just kidding..

Ok here is a real world example

There is a pbx system called Asterisk, it runs on linux, its free, it can be hard to set up.

We wrote a custome front end for it and sell it with our front end and our setup to our clients. We charge for upgrades, the whole while keeping with the GNU and including all the source code. Just because you know how to setup a computer, doen't mean that guy reading over your shoulder does.

[earobinson]

Lots of ways

the project lead for gaim just got higered by google. Also if your looking for a sys admin for your linux servers who better than some one who wrote it. you also might want to check this out

http://www.gnu.org/gnu/manifesto.html

It is important to note that the gpl dose not stop a programer from selling his work, he just has to provide the source code, meaning he wil get paied once for the job.

[darknuala]

A Lot of companies give the software away, but charge for support. Depending on how good support is, or the need for it, that could be both good and bad.

[Roptaty]

As darknuala wrote, companies charge for the support of the product, but does this mean that the company write the software so it is hard to use by the normal user? That it isn't userfriendly? Just a thought...

[unkemptwolf]

Im with Roptaty on this one. It seems to be that most people make money on support from enterprises. Yet these entrtprises also pay people to install and maintain these systems, so why do they need support? Do the people who keep these systems running not know how to support them (a geekspeek to laymen translation problem perhaps)? Are they simply overwhelmed by the number of people they asking them questions, and need the support to shoulder some of the load? It just seems like doubing up to me, a guy on site to support stuff, plus a bunch of guys over the phone. Not trying to flame or anything, I'm genuinely curious.

[darknuala]

Im with Roptaty on this one. It seems to be that most people make money on support from enterprises. Yet these entrtprises also pay people to install and maintain these systems, so why do they need support? Do the people who keep these systems running not know how to support them (a geekspeek to laymen translation problem perhaps)? Are they simply overwhelmed by the number of people they asking them questions, and need the support to shoulder some of the load? It just seems like doubing up to me, a guy on site to support stuff, plus a bunch of guys over the phone. Not trying to flame or anything, I'm genuinely curious.

Where I work at in my department, we have pc techs that do a lot of hardware and software troubleshooting. In the corporate environment when dealing with domain controllers and Exchange Servers, Antivirus, they like to have on site people to do the calls to Help Desks, and support teams, while they have a corporate group that handles the big hardware, and networking requests. Such as we have 10 Cisco Routers and 4 switches in our building, that the PC techs install, but they are maintained at the corporate level. Hope this helps shed some light on this.

[commodore]

I wanted to ask how free software developers earn money. That support thing is actually funny to me :D You can get the software for free but you have to pay for help with it. There's loads of forums where to ask help for free.

[fct]

There's loads of forums where to ask help for free.

The forums can't compare with knowledgeable staff ready to go personally to solve the problem as soon as possible. That's why companies pay for that kind of service.

And not only support, free software allows you to get paid for changes in the code (features, etc.) requested by companies that need them.

[commodore]

But whatever you do, commercial software will always bring in more money, yes?

[David Marrs]

I think one of the main reasons why you don't see Linux on the home desktop is that you can't just buy it off the shelf, just as I think one of the main reasons you *do* see Linux on the corporate desktop is because you can buy it off the shelf (i.e. Red Hat). Ymmv (your mileage may vary) will only cut it so far and I think that's borne out in real life as well. Linux, Apache, Samba and OpenOffice.org are all free software that has been developed on comission - ie. paid for, typically by customers of Sun, Red Hat or whomever.

Where it seems to get harder to make a successful business model is when you get more and more niche applications that fall outside of the realms of the well supported corporate environment. For example, it's widely accepted that you can't build the Gimp around a traditional proprietary business model because the Gimp developers can't control how their application gets distributed. To be honest, I don't think this holds up very well against scrutiny. After all, it's very easy to get hold of Photoshop without paying for it but Adobe still get enough paying customers to be a commercial success. Wouldn't customers prefer to get the rights to make copies of the software they buy, lend it to their mates, put it on their laptops, and so on? I think that if they thought about it, the Gimp team could find a way to make the project profitable, if they wanted.

I think there may be a demand for it now, actually. There's a lot of demand on the mailing list for features and simply not enough man hours to deliver them. I'd gladly pay £200 for an upgrade with certain features and I'm sure others would too. If that could pay for the team (or even somebody else) to work full time on the Gimp, that would be great.

Where free software can't deliever, proprietary software will always be there to fill the void, but I think as free software becomes more popular, there will be lots of enterprising people to find more ways of selling it.

[skirkpatrick]

Well, I don't mind paying for some software. I pay for games (even Linux ones) and I paid for the financial program (Moneydance) that I use. I do think that everyone should have at least an OS and a few programs that they need everyday (browser, email, word processor, etc) that they can get for free. What I do object to is being forced to pay for an upgrade every year or two because that's the only way I'll get bug fixes or the ability to access files created by users of the new version, especially when there are no new features that I want. In all honesty, what features has Office added since '97 that 98% of the users actually use or need?

There's another software model that's starting to take off that makes sense and in my opinion, something MS should have used for Word and Excel. You give away a version that has most of the functionality that people want and then charge for advanced features and plugins.

[majikstreet]

I think that the free software developers have day jobs.

[commodore]

Now that's **** that loads of free software is being selled with distros. If I were a programmer I wouldn't let people sell my software.

[fct]

Consider that with free software you can sell support without being the developer of the application. For example, you can get paid for Linux+Apache+MySQL server installations without getting a certificate or paying licenses. Even do formation for employees in your client company.

Also, you can use the tools without paying licenses for your programming needs. And modify those tools to your needs without being restricted to asking the developers (and most times paying the price for those external modifications).

If you decide to work on proprietary application development, you'll have a hard time programming an application from scratch that can outsell the competition.

Most closed-source developers I know work on a dedicated, on-demand basis. They go for niche markets and ask tons of money per license. But whenever a big enterprise steps into their market, they lose most clients since they are able to program better software with their huge amount of programmers employed.

Now, if you develop free software, there are lots of doors that can be open. For example, companies like Redhat, Sun, Novell or IBM are employing free software developers to work full time on their favorite projects that said companies need (the linux kernel, gnome desktop system, etc.). Also, you can get help from the community of developers that use your app and submit patches to the source code to improve it. Not to forget that self-employment is seriously affected by the amount of money you can spend at the beginning (some friends I know started a web design company and spent half the money in software licenses - they were in red numbers for more than a year).

Also, many people like the ideology behind it:

http://www.gnu.org/philosophy/philosophy.html

However you look at it, there are many people out there making a living out of free software, be it development, services, or both. Here in Spain some regions even require the software developed for them by companies to be absolutely free.

[commodore]

I am not a programmer actually but I am very interested in it. If I would develop an app I would really like to make it free, but I need money. I don't even have my own computer :D My whole family uses the comp I'm behind.

[David Marrs]

Remember that you can still sell the software you develop. It's the souce code you have to make easily available free of charge. It really depends who you're marketting this stuff to how successfully you'll sell it to them. If they're the kind of people who are happy finding cracks for software then you'll have difficulty selling it whether the source is open or closed. If they want a product that just works then they may be willing to pay for the convenience of having a self-installing binary.

But I think most developers get their pay working for companies that sell solutions to other companies. Their clients typically want a product with a guarantee and they're willing to pay thousands for that product, regardless of whether the source is closed or not. The advantage of open source is that if Vendor X goes out of business, Vendor Y can still provide upgrades because they have access to the source code. So there's a guarantee of longevity there that doesn't exist with closed source (unless you're buying from a giant like Microsoft).

Both open and closed models have their relative strengths and weaknesses. Which ever model you use, the important thing is to take advantage of its strengths and try to avoid its weaknesses.

[commodore]

Remember that you can still selle the software you develop? I said how do free software developers make money :D

[fct]

It's free software as in freedom, not free software as in "gratis" (think the difference between free speech and free beer).

Let's say you pay me 3000 $ so I develop for you some software. If I provide you with the sources and a license that says you can modify it, redistribute it and stuff, it's free software.

[cyberkoa]

The actual free is freedom of using not free of charge

software under GPL is free , the software itself is free of charge but not the other thing like media , support etc.

If you do not understand how they can make money , try to study the business model of Redhat, JBoss .

Therefore , there is a myst that open source program cannot make money , at least the owner of RedHat corp is very much richer than a lot of people in the world.

Just my 2 cents opinion :)

[baRRacuda]

Have a look at this:
http://www.gnu.org/licenses/gpl-faq.html#TOCDoesTheGPLAllowMoney

[az]

Remember that you can still selle the software you develop? I said how do free software developers make money :D

Red hat is probably not the best example.

The point of GNU is that software is not property. A company like microsoft only sees software as property. That is the difference.

A developer who works for microsoft works on code all day long and when she goes home, that code does not belong to her. The same developer working for an open source company can say that she owns the code she wrote. It belongs to everybody. She gets to keep her paycheck too!

Most professional software developers work on projects that they do not end up selling in stores. Usually, they work on in-house projects or utilities that are not of value to the mass market. There is an advantage in Free-libre open source software that the tools for developing such software is easier to use and holds no overhead. You do not have to pay to make the programs you need to run your business.

[commodore]

I know that free in free software means freedom, but I want to make the software also free from paying for it. Sorry that I used the word free software.

Is red hat GPL? If it is then is it possible to get red hat linux from my friend for free?

[rjpiercy2]

Hi there,

Ah to be 14 again...

You can certainly download and burn fedora core, which is one of the descendents of Redhat (the other being Red Hat Enterprise Linux).

http://fedora.redhat.com/

Obviously, red hat enterprise is what they are peddling. I use ubuntu but I heard fedore core was pretty decent.

One company to look at is IBM. They contribute lots of code to support linux, apache, and tomcat (among others). IBM wants to sell their big iron hardware, so if they have an OS that they don't have to license from M$ (they got burnt once in the early 80's).

Basically, the better linux is for datacenters, the more hardware IBM can sell.

[cactus]

-Support (installation/administration/etc)
-For hire customization (company A needs feature X, but cannot code it themselves. So..the pay the main development team to add it.)
-Hosting of services (Some people dont have the reasources to run certain open source packages. think clustering, websites, etc)
-Advertising (some projects are sponsored by a corp, in order to garner good will/reputation in industry, or to show their customer base they know what they are doing)
-R&D (some projects are corp sponsored, as research and development projects)

that is what I came up with in... 30 seconds.

[Joeb]

The real answer to the question is simply by providing a service that people are willing to pay for.

If I develop proprietary software, I may make some money from the initial sale, but it is in providing maintenance services where the real money is at (look at the price of Microsoft SQL Server vs the annual maintenance fees).

Likewise, with FOSS software, I can sell my software, but whoever buys my software may turn around and give it away. So the answer again is in the service revenue of supporting the software, whether a linux distribution or just one application.

Unlike proprietary software where you are locked into the support from the "owner" or one of their associate companies, FOSS allows the user to go to the best service provider, so it keeps me, the original developer on my toes if I want to maintain that revenue stream.

If I offer the best support, then I will have the revenue. IBM is an example of this model. They don't produce their own Linux distribution, but they do support a number of them. Why? Well, large companies, particularly those already used to doing business with IBM, like support from other large companies.

That said, I know a lot of independent service providers for both Microsoft (proprietary) and/or open source software. They stay in business and grow, by providing what the customer wants -- solutions to their business problems. In otherwords, by providing a service that people want.

So, in answer to the original question of "How do people make money with free software?" They don't. They make money by providing a service that people want.

[crispingatiesa]

I wanted to ask how free software developers earn money. That support thing is actually funny to me :D You can get the software for free but you have to pay for help with it. There's loads of forums where to ask help for free.


When you are in a big company and suddenly server X goes down or there is some other problems you don't want to get your personnel to go to the net to start learning how to deal with the specific problem, most certainly if you have the "man" putting fire in your behind. It is better to have support from the developer. There is also legal implications, if I buy a product from Red Hat for instance and I get its support if something goes wrong and make me loose money, then I can always sue Redhat :D

[curuxz]

You can also make money with opensource by including it in other aspects of your business model. I'm talking other than selling support packages.

Eg. in my company I build websites using CMS systems, not because I can't code them my self but because of the massive time savings that it provides.

Secondly we use opensource not only to make money but to SAVE money, and in business savings are as good as earnings because you end up with more money ;) this is by using linux only computers and development enviroments, servers, groupware systems and software. If I had to pay for the microsoft equivilent of what my business uses I would be in debt for thousends a year in software that would be worse than the free stuff I use!

Lastly we use opensource to provide marketing for other things, the savings on software and servers means we can offer certain services free of charge and all we have to do is setup some opensource app. then this encorages traffic which gets people to use our services such as high quality web design, graphics and yes you guessed it service packages :D

[commodore]

IMO the most boring thing is support :(

[Joeb]

IMO the most boring thing is support :(

Not as boring as sitting around wondering where your next meal is going to come from.

[curuxz]

lol joeb too true ;)

[oldmanstan]

Yet these entrtprises also pay people to install and maintain these systems, so why do they need support? Do the people who keep these systems running not know how to support them (a geekspeek to laymen translation problem perhaps)?

Some enterprise users may also want support as a kind of warranty, if it breaks YOU fix it as opposed to having to pay someone to come in who doesn't really know what they're doing. Also, not sure about this, but there might be issues with various standard and quality compliance (ISO, etc.) if you use unsupported software and whatnot, though as I said I'm not totally sure about that.

[jobezone]

The most interesting thing that free software provides is to break down the technical separation that proprietary software creates between a user and the program he uses.
It also "theoretically" enhances the possibility for programmers to be back in charge, or at least have a big say, of software development choices. If this has fully been achieved or not, is another question, and depends from case to case.
KDE, from my outsider point of view, seems the biggest example where this has somewhat been achieved.

P.S.- On the other hand, you may say that this lead to KDE lacking on the usability front, but it's common knowledge that they want to improve in that direction as well.

[soltanis]

THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.


This doesn't cut it for most businesses.

[ktzqbp]

How do you make a money with open-source software?

First of all, it should be mentioned that most FOSS developers don't do what they do to make money. It's usually done as an act of good will (or good PR in a corporation's case), to be a part of a community of software developers, to support the software they're developing, or because they're customising open-source softare software and it would breach the license to release it as closed source.

But your question does hold merit in an organisations's circumstance: how is open-source softare financially viable for them, in any shape or form?

To name a few methods to make money out of it:

donations and sponsorship from organisations
release open-source code, but under a license that requires royalty payments to the owning company to embed and package it in hardware (Sun's Java)
distribute the code at a price (Linux distros)
offer professional support/customisation (Red Hat, Canonical)
offer services to host the software offsite (i.e., open-source cloud software)
use the F/OSS to promote the brand name, but make money off other industries like selling hardware (Sun, IBM, Apple*)
host events to promote the code (PyCon)

*Even though their code isn't open-source, you could see how their model would work for a company with open-source software.

But yes: currently, for the large majority of software uses, closed-source software makes much more money than the open-source alternatives. Most open-source developers have day jobs.

As open-source software matures and piracy increases during the global credit crunch, those providing closed-source software will no doubt see continued falls in profit.

Despite Richard Stallman's fanatical ideals, I don't think the whole world will ever be able to entirely run open-source softare. However, the software industry is definately in for a financially-rough, yet interesting ride in the coming years - I haven't a clue where that ride is going, though.

I'm not sure, but I don't think there is going to be as many hired developers in a decade's time.

[lavinog]

This doesn't cut it for most businesses.
Doesn't M$ have the same clause?

[CptPicard]

It always seemed to me to be a false economy to suggest that putting an artificial price on an intangible asset that is reproducible at no cost is somehow the rational thing to do.

If I am a baker and some other baker makes bread at a lower cost than I do, let's say because he has some Jesus-like capabilities to multiply the bread as if by magic, I am not all that sure that it makes sense to say that there must be a floor-price to bread so that I can make a living. I might just as well concede that the bread-issue is already taken care of, so I might just as well look elsewhere for my time to be productively used.

It is great if there is a huge and growing pool of code out there to draw on to solve actual problems with. That's how science works -- natural laws are not patentable, but engineers get paid to apply them.

Mind you, even if this means that there are less economic opportunities for coders, so be it -- I'm all for culling the ranks of any profession to only maintain the best. Remember -- the degeneration of society is proportional to the ratio of lawyers to rest of population...

[nvteighen]

Remember -- the degeneration of society is proportional to the ratio of lawyers to rest of population...

Wow, a great phrase... :p

[TheBuzzSaw]

Hmm... ancient topic, but good topic nonetheless.

I know of a few ways to make money. My last job was all about FOSS. Your focus should be on selling service, not software. For instance, I was helping build some timeclock system, and a couple companies paid a handsome sum just to have their logos/links on the front page of the home site. Other businesses paid money to increase the priority on their particular feature requests. If you sell your talents/abilities/time, FOSS can be very profitable. Offering support on something you created is probably the most common money-maker.

[linux4life88]

I think a lot of the open source people code because it is simply loads of fun. They make money because they have a day job and their open source projects are simply a hobby of sorts. This is the way it is for me at least (and my day job has nothing to do with computers or programming at all, go figure). Also, some will sell shirts and the such with logos on them (Ubuntu is one of these). Take a non computer software example the webcomic XKCD, it is free but the writer of it doesn't have a day job because he sells so many shirts he doesn't need a day job.

[Reiger]

Consider the case of Opera which is a gratis webbrowser: Opera ASA makes money off its (gratis) desktop browser because Google for instance pays money to have their search engine be default. Google in turn makes money from the adds displayed when you search for something.

Another thing is that a company could write free software on order: much of a rent-a-coder concept.

A third is the widely mentioned support. Forums are good if your are an individual willing to spend time & effort to use these forums [find 'em, sign up etc. etc.] but are unacceptable for corporate environments for a number of reasons:
1) Forums require that you supply sensitive data, over which you have no control, furthermore forums generally are not geared towards a many-persons behind one account system so a single corporate account may not be viable;
2) Forums don't come with guaranteed Qualtiy of Service and are not subject to contractual obligations -- if someone pulls the plug out of the forum you are left on your own.
3) Forums are a security risk (most forums thrive on adds, which in turn make them particularly vunerable to XSS and similar attacks)
4) The prospect of forums containing valuable corporate information may be enough for 3rd parties not to consider you as a serious business partner.

A fourth is that Gratis and Libre software may help further market share in other areas; in particular if you have for-pay applications which depend on the open source components.

[benj1]

does every one realise this thread started in 2005?

also totally unrelated why does 'realise' come up as a spelling error, isn't this a uk site & i though south africans spelt it the same?

[Reiger]

Mind you, even if this means that there are less economic opportunities for coders, so be it -- I'm all for culling the ranks of any profession to only maintain the best. Remember -- the degeneration of society is proportional to the ratio of lawyers to rest of population...

Once upon a time the issue was mitigated by convincing the lawyers & co. to make a space trip. Then they bumped into the earth. 42.

[lisati]

also totally unrelated why does 'realise' come up as a spelling error, isn't this a uk site & i though south africans spelt it the same?

Sometimes it has more to do with browser settings than the site hosting a web page. I just set my browser to NZ English and it flags realise as well, even though the UK preferences for many words is what I was taught at shool.

[benj1]

thanks lisati, sorted.
I was starting to think I was in M$ Word or something.

[slavik]

Once upon a time the issue was mitigated by convincing the lawyers & co. to make a space trip. Then they bumped into the earth. 42.
and the rest of the population died from a disease contracted from a dirty phone ...

[0per4t0r]

Donating brings in a lot of money, and if the software's good enough, people will pay more.

Also, merchandising helps too.