Open Source Business Found Parasitic, and the ADCL

[David Johnson]

On Thursday 13 March 2003 03:07 am, maa at liacc.up.pt wrote:
> Dear all:
>
> On 2002-11-22 I originated the thread "The OSD and commercial use" on
> this list (license-discuss at opensource.org), about the problem of
> selling open source software. After lurking over the ensuing
> discussion (thanks guys) I promised to come back with my thereafter
> educated reflections. Here they are now, in the form of the teasing
> little article reproduced below.

I've listened to both sides of the argument. One side says "you can't 
make any money selling Open Source Software" and the other side says 
"yes you can make lots of money selling Open Source Software." Well, 
BOTH sides are chowderheads!

First the "you can't make money" crowd. You're trying to fit OSS into 
the proprietary business models. That doesn't work. It doesn't work any 
better than a hunter-gatherer trying to sell nuts and berries in an 
agricultural marketplace. The economic systems are just too different.

The successful proprietary model of pretending to sell the software 
while really selling the license obviously doesn't work with OSS simply 
because the definition won't allow you to. A more realistic model of 
actually selling the software (without the license bait-and-switch) 
does work, but not very well. The reason you know all too well: it's 
hard to charge money for stuff that's free.

As long as you try to stick Open Source Software into a shrink wrapped 
box with a price slapped on the side, you will not succeed.

Okay, now to be fair, I'll pick on the "but you can make money" crowd. I 
don't know of one business that is making any money selling Open Source 
Software. But I do know a tiny handful that are managing to evade 
bankruptcy by begging for donations. A few others are actually making a 
few bucks selling free beer, but you can count them on one hand with 
enough fingers left over to pick both nostrils.

The stories of people getting rich off of Open Source Software are 
isolated anecdotes, most of which date back to the dot.boom era when 
you could make money just by promising to burn it when it came your 
way.

Note: People make money selling bottled water simply because in their 
particular marketplaces clean and pure water is NOT free. You don't see 
people with artesian wells buying bottled water.

The real truth is somewhere in the middle. You can make money off of 
Open Source software, perhaps even decent worthwhile money. But you 
won't see any billionaires and precious few millionaires. So get that 
kind of thinking out of your head right at the beginning.

How do you make money off of Open Source? The exact same way you make 
money off of anything else. Find out what the customer wants and can't 
get and sell it to them. That means you can't sell them the software 
because they can already get that without you, and for a much lower 
cost.

I'll finish off with an example: Two weeks ago my company needed a 
specialized RAID solution. The two options were a proprietary solution 
and an Open Source Solution. The proprietary solution was expensive, 
but it was ready to implement immediately. The Open Source solution was 
free, but it wasn't ready and didn't come with any support to get it 
ready for us. At a less critical time we might have gone with the Open 
Source solution. But we need the stuff immediately, so we bought the 
proprietary product.

My company didn't care whether it was free and open or proprietary and 
closed. Now here's the crucial point: if this proprietary solution was 
Open Source but identical in all other ways, we would have STILL chosen 
it!

The software business world needs to stop complaining that you can't 
sell free beer. And the Open Source world needs to stop insisting that 
Open Source isn't free beer.

-- 
David Johnson
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