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Open Source IS a business model From the "cool titles bring $$'s" files:
Analyst group 451 Group has a non-public report out titled, "Open Source is Not a Business Model." To put my views front and center - this report title is clearly an attempt to generate interest with what some might think of as a controversial view. I have somewhat different views than 451. In a blog post by 451 Group analyst Matt Asslett he wrote that: Open source is a business tactic, not a business model. Open source is not a market in and of itself, nor is it a vertical segment of the market. Open source is a software development and/or distribution model that is enabled by a licensing tactic. There is very little money being made out of open source software that doesn't involve proprietary software and services.Bottom line in my view is that open source IS a licensing approach and it IS a development methodology. It's also used as a marketing strategy sometimes too. That said many millions have been made from open source technologies - like Linux. Mozilla's Firefox open source browser generates more than $50 million a year for Mozilla. I could go on, but you get the point. There is also a move by some (governments and others) to specify open source software as part of the procurement process. I'd say that qualifies as a category. Saying that open source is not a business model is sort of like saying that search is not a business model. Search itself (Google or otherwise) is of course a vehicle on which a business model can be built (in Google's case a very good one). The same is true for open source - it is the medium/methodology - on top of which money is made. The fact that many open source vendors have a dual-licensing model should not be seen as a failure of open source to be a business model in and of itself which is kinda/sorta what 451 Group is implying. Every time I've ever spoken to any open source vendor with a dual license strategy the reason why they have one always has to do with choice and policies at the end user enterprises. Open source can co-habitate with proprietary solutions and the fact that the two can co-exist is a sign of strength not weakness and doesn't mean that open source is not the basis for a business model. Understanding how to make money from open source software is an important thing and that's what I see as the key issue that needs to be understood. Understanding that it's a balance of open/closed and free/paid is critical to success. But that's nothing new is it? Hasn't Red Hat been grappling with that issue since its creation? Isn't Red Hat an Open Source vendor? 0 TrackBacksListed below are links to blogs that reference this entry: Open Source IS a business model . TrackBack URL for this entry: https://swarm.jupitermedia.com/mt-tb.cgi/5545 3 CommentsLeave a comment |
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Hi Sean,
It is unfortunate that many people have taken the title of our report to be a criticism of open source or an indication that open source has 'failed', it was not meant to be. I don't actually think it is controversial at all.
It was meant to make a statement, that is supported by our findings, that enables vendors to avoid misconceptions about open source and instead focus on how it can be used as a development and licensing strategy as the basis of larger business model.
In our report we do point out to vendors some of benefits they will potentially be giving up by deciding not to take pure open source approach, as well as those they will gain from proprietary extensions.
It is up to the vendor to decide which approach best meets their objectives. What we have observed, however, is that most of the vendors building business around open source code are using some form of commercial licensing to distribute, or generate revenue from, open source software.
Matt
"It is unfortunate that many people have taken the title of our report to be a criticism of open source or an indication that open source has 'failed', it was not meant to be."
Bull droppings.
"I don't actually think it is controversial at all."
Bull droppings.
It's a three thousand something report that requires as much publicity as possible to be sold. The only buyers are corporate suits without a clue about FOSS who are looking to reinforce their beliefs, and who are looking for outside corroboration to justify their reports or arguments made to senior management.
Others who report that they have read the executive summary (since they aren't wasting three grand) only confirm (whether outright or by their own summation of the executive summary) that the report's title is in fact a criticism of open source, and is in fact "an indication that open source has 'failed'"
The report's title was designed to sell a three thousand + dollar report. Therefore, it was absolutely necessary to make it controversial and a criticism. And everyone and their mothers who know anything about FOSS and controversy/criticism know that such a tactic is the equivalent of throwing a grenade and then shouting fire in a crowded theater.
The only problem now (for Matt) is that Matt Aslett can't stand the heat.
Ok, so forgive me asking the stupid question -- but can someone expound on HOW the open source business model is making money ?
I mean if you're going to disagree with a seemingly accurate and, personally, actually positive take on open source such as:
"It is up to the vendor to decide which approach best meets their objectives. What we have observed, however, is that most of the vendors building business around open source code are using some form of commercial licensing to distribute, or generate revenue from, open source software."
Then explain how can open source in and of itself make the money it needs to stay solvent ?
And please don't just tell me Mozilla generated $50 million on advertising dollars alone.
Comparing search to open source doesn't quite seem to be that similar. They're both free ? But profiting from search seems so much easier than open source ( see: Advertising ) And besides, how many new competitors can or even have the financiang/infrastructure to enter the search space now ? vs the plethora of open source software vendors: current and future.
I tend to agree with the observation and analysis provided by 451.