Not Your Grandfather’s Open-source

Open-source development is on the rise and the effects can be felt throughout the software development world. Hand in hand with the growth of the software engineering community, open-source has become mainstream over the last couple of decades, and is now one of the main building blocks of most software projects.

Business opportunities around open-source have evolved as well. Household names such as Redhat, MySQL and WordPress have shown that with the correct positioning and business model, open-source can be a huge business. Big companies and venture capital have taken note as well, funneling budgets and resources into open-source.

A common misconception about open-source is that it means code that is available for zero cost. The “Free” part of “Free open-source” talks about freedom (as in “free speech”) and not about zero cost (as in “free beer”) – the freedom to read, modify and redistribute the code. While there is natural resistance to spending money on something you are used to getting for free, commercially supporting open-source has only benefits in the long run.

Adding a commercial element to open-source leads to more funds being available to develop and improve open-source products, and for providing professional level support and integration services. This, in turn, reduces the total-cost-of-ownership – the costs associated with using and maintaining an open-source project that might have been provided “as-is” without commercial support.

The economics of open-source

Many look at the successes of Redhat and MySQL as outliers, and still consider open-source as a volunteer process. Hobbyist / volunteer open-source development will always be a big part of what open-source is, but many projects – as they reach a certain level of maturity and popularity – need to find some level of commercial support or face being bogged down by issue reports and feature requests, while core team members eventually move on to gigs that actually pay the bills.

At that point, open-source projects typically evolve in one of several ways:

  1. Project owners release control of the project to the community, and hopefully a team of contributors forms organically to maintain the project over time.
  2. A big company, such as Google or Microsoft, takes ownership of the project and provides paid engineers to work on it full-time.
  3. A dual-licensing model emerges where higher levels of support or features are included in commercial licenses only. This is often termed as “Commercial Open-Source”.

The first option is certainly viable but can be risky – without someone taking ownership of a project, many times development by committee hits a wall and trails off as disagreements about direction and lack of accountability derail an otherwise well-meant effort.

The second option is not really something you can plan for – great when it happens but not something you can count on for sustaining an open-source project.

The third option is what I believe would be the future of most open-source project, as they transition from a hobby to a professional pursuit.  Using a dual-license model, with commercial licensing supporting the development of both community and enterprise versions. It’s a model that companies such as Redhat and MySQL used very effectively in building billion dollar businesses and enterprise grade products.

A professional approach to developing open-source products benefits even you, as the end user. The initial cost might rise (especially compared to *zero*), but the overall costs (the total-cost-of-ownership) are significantly reduced.

How many times did you use an open-source project that had a show-stopping issue (for you) that has been opened for over 2 years? Did you ever think to yourself – “I would pay the developer to fix this bug only so I could use this otherwise great product”? What about new features or customization that would take the original developer a fraction of the time to add compared to you and your team? This kind of thinking process happens every day at a score of software houses around the world. Wouldn’t it be great if that option actually existed?

A big opportunity in a huge market. Are you excited yet?

The software market is huge and growing fast, as software penetrates every aspect of our daily lives. As the industry matures and becomes more professional, so do the products that drive it – and especially open-source. With several big names and a host of small successes already in the books, commercial open-source products constantly prove this model works well, and benefits all sides involved.

Building a successful business is not easy regardless of the field, and it’s the same story with open-source products. The opportunity is there, and the time is now – as there are still relatively few professional open-source offerings, especially compared to the huge range of software projects that could benefit from it.

Most likely you have never considered building a business from releasing code. If I have opened your mind a bit for new business opportunities as a software developer, then my goal in writing this article has been achieved.

If you have any questions or comments – hit me up in the comments. Let’s talk about it!

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  • http://skillcode.wordpress.com/ Alex

    Hey Eran,

    that is a nice website You got, never heard of it before, but I really like the idea. Definitely something I am going to consider once I get my own web development skill-set.

    I have been thinking about something similar actually, I can definitely sense that there are big things happening around us, and in the next two/three years we are going to see some really nice software being released. At the same time I believe that the big guys, as you mentioned, WordPress, MySQL etc. They are going to stay for a while. And there is gazillions of dollars to be made.

    I like WordPress a lot, especially the simplicity of it. Although from my personal experience, not many developers appreciate that. SitePoint is a great example of how a simple website/blog should look. Easy for the eyes and not so hard to find what you’re looking for. Hopefully in the future, WordPress search is going to get improved for bigger sites. Nothing that some PHP/JS can’t do though!

    Great article.

  • Arun

    Hi Eran,,
    I liked your Article, can you suggest any article you had liked on the same topic.

  • Arnfinn Høgda

    The “commercial open-source” you are advocating, is commonly referred to as open core and seen as a blith upon free software. RedHat does not practice dual licensing. Most of their offerings are available under a free software license. Enterprise Linux, RHEV, OpenShift and Identity Management, they are all GPL-licensed software. RedHat didn’t get to their market position by selling dual-licensed software, but by providing long-term support of free software for their customers.

    MySQL is a different story. After the acquisition of Sun Microsystems by Oracle, more of the ecosystem around MySQL has moved to a open core model. This has in no shape been hugely successful as you say. RedHat themselves has opted to replace MySQL with MariaDB to rid themself and their customers of the open core model.

    • http://www.binpress.com Eran Galperin

      Commercial open-source is the commonly used term. I think you can trust wikipedia as a reliable source – http://en.wikipedia.org/wiki/Commercial_open-source_applications

      MySQL had a dual-licensing strategy way before they were acquired by sun. One of the original MySQL developers and the current main maintainer of MariaDB, Monty Widenius, is a huge propent of this model. You can read his opinions on this subject on his personal blog – http://monty-says.blogspot.com/2013/06/business-source-software-license-with.html

      Commercial open-source is a more mature model to create sustainable open-source. Did you know that over 93% of open-source is no longer actively maintained? that’s because a free, volunteer model – while altruistic – is generally not sustainable.

      I can understand the natural resistance for paying for something you are used to get for free (who wants to pay, right? that’s why software piracy is so widespread), but any reasonable person once he puts some thought into can see that creating a sustainable economy around open-source is a win-win situation for all parties involved.

  • http://www.freedomsponsors.org Tony Lâmpada

    Hi Eran,

    Thanks for the great article.

    > How many times did you use an open-source project that had a
    > show-stopping issue (for you) that has been opened for over
    > 2 years? Did you ever think to yourself – “I would pay the
    > developer to fix this bug only so I could use this otherwise
    > great product”?

    I can definitely relate to that. (Hey, Apache Maven I’m talking about you!)
    I’ve been a software developer for 13 years now.
    Always used a lot of open source stuff and this kind of situation always happens.

    I would add that there’s a new trend ou there that might create a 4th option for Open Source projects: Crowdfunding.
    Freedomsponsors.org is aimed exactly to help solve that kind of problem (Disclaimer: I’m the founder).
    Hopefully one day there will be developers who will be able to work on the Open Source projects they love, powered exclusively by the crowd.

  • http://narayana-games.net Jashan

    This is a nice article. I’d just like to comment on one statement:

    > Did you ever think to yourself – “I would pay the developer to fix this bug
    > only so I could use this otherwise great product”?

    Yes … and that happened for a product that I paid quite a bit of money for. It wasn’t open source, so I couldn’t fix it myself. There were actually 3 or 4 major releases until that issue finally got resolved – and it least in my environment, it was kind of a show-stopper.

    So far, I haven’t seen similar issues with open source products. But maybe I was just lucky with the open source products, and unlucky with that particular commercial product.

    Another example: I strongly dislike the direction Apple and Microsoft are currently going (with more and more Cloud-dependence which raises severe privacy concerns). I’m a paying customer – but that does not make a difference at all. With an open source product, there could be a branch going into a more reasonable direction.

    I’m not saying these problems don’t exist with Open Source. But what I am saying is that these problems can also arise with commercial software. Just because you’re paying doesn’t make much difference (unless we’re talking about custom made software ;-) ).

    • http://www.binpress.com Eran Galperin

      I think you might have misunderstood the article a bit, or maybe didn’t read it all the way through – I’m very pro open-source. I’m trying to suggest a way to improve on that model by making it more professional – not suggest that we use closed-source software and tools instead.

      By adding a commercial incentive and the ability to focus full-time on supporting open-source, we’ve found that it’s much easier to provide the kind of support that businesses expect. That’s where I see open-source moving going forward.

  • Jon Islan

    I don’t think that any of the founders of “open source” believed that the would be developers condemned to support an open source app forever. The concept was that if the consumer got the source code for the software they would be able to find a developer to repair the software rather wait on some future “fix”. Kind of like buying a car, you don’t have to take it back to the factory to get it repaired, you can take it to a local dealer or learn to fix it yourself.