[om-list] Business Models

[Mark Butler]

Hello everyone,

This is a little off-topic, but sustainable open source business models are of
general interest these days, so I would like to share my opinion.

I think that fee-based support services are a necessary part of any serious
software enterprise.  There are quite a few companies that provide this
service for open source products now.  The income from such services is ample
to maintain a well developed piece of software, but not generally enough to
finance its initial development.

So as an alternative, many companies are moving to hybrid models - typically
the core engine is developed as an open source product and various auxiliary
programs are developed and sold as proprietary products.

The core engine is typically useful standalone by someone with a serious
technical background.  Sendmail, Apache, Postgres, etc. are typical examples. 
However, system software rarely gains mass acceptance until a robust suite of
graphical administration utilities are available for it.  This is why only
companies with a Unix guru handy run Linux servers instead of ones running
Windows NT.

Administration utilities are really not what anyone wants to write in their
spare time, so developing and selling them fills a considerable market niche. 
The source code to such things is pretty mundane, so there is no reason to
keep it a secret, and much benefit to making it publicly available under a
restricted license.  It is basically an insurance policy for customers similar
but superior to source code escrow.  

Then when you do not want to develop a product any further, you just GPL it, a
la Netscape, and work on the niche products people actually will pay money for
until it comes time to GPL those as well.

Let us say that Microsoft published their complete source code under a
restricted use license tommorrow. Would anything change?  Not really - it
would be easier to make Windows emulators like WINE, but that is about it.  If
anything, it would probably increase the influence of Microsoft technology for
several years.

I am currently looking into full time consulting positions, but I have thought
for quite a while that consulting mixed with hybrid open source software
development would be very enjoyable.  In particular, I would like to develop
cutting edge software for which there is no current equivalent. 

- Mark