While the bloom may be off the rose of open source models, there is money to be made
It has become quite fashionable lately to disparage open source business models as a failure. No less an authority than the NY Times came out late last year with a piece lamenting the elusive nature of successful open source business models. Frankly they are not entirely wrong. The gold rush of money pouring into open source startups dried up along with most of the other VC funds when the economy went south. On top of that, like in any gold rush there are a lucky few who strike it rich, but the majority fails. The folks who earn their dollars supplying these companies, like the stores that sold mining supplies to the ‘49’ers do well.
But that doesn’t mean that open source solutions are a failure. Not for a second. Whether in the enterprise, the mid-market or the government markets, open source is thriving. It’s not just the LAMP stack that is accounting for it either. There are a wide ranging group of companies that have cracked the formula to open source success.
These companies have found that it takes a wide blend of complimentary services to make money from open source. It is not just selling support alone that will do it. That is a tough model. It is not making the open source version of your software “crippleware” either. That will just get people upset. But you can up sell premium features as part of the blend. Customization, implementation and design – the classic professional services that are an integral piece of the revenue pie with any software are part of the equation as well. If you can put together the right blend of revenue generating strategies around the open source software that you release, you can be successful and profitable.
At the end of the day it may be a good thing that “commercial” open source is not an industry darling right now. Away from the spotlights those folks who actually “get it” will be hard at work evolving, tweaking and improving the mix. This is usually what happens when the lights and cameras go out and the real workers come out to do their thing. The result will be a clear and successful path to profitability using open source. Remember, you heard it here first.
