Wednesday, April 14, 2004
Open Source Business Models that Work
A good overview of the various combinations of revenue streams that companies are using -- selling consultancy / support / maintenance. Overall the companies are remarkably orthodox in their outlook -- they just happen to be leveraging (and some are nurturing) open source communities and code bases. All the things that closed source and non-software companies deal with are dealt with head on -- the value of customer relationships and quality of delivery are key, the fact that the software development costs are considerably lower (not zero) is pretty much beside the point.
General themes:
[If anybody wants attribution for comments / questions let me know]
A good overview of the various combinations of revenue streams that companies are using -- selling consultancy / support / maintenance. Overall the companies are remarkably orthodox in their outlook -- they just happen to be leveraging (and some are nurturing) open source communities and code bases. All the things that closed source and non-software companies deal with are dealt with head on -- the value of customer relationships and quality of delivery are key, the fact that the software development costs are considerably lower (not zero) is pretty much beside the point.
General themes:
- A couple of interesting questions came up regarding the current trend for outsourcing.
- Dev model vs business model -- dev models very between employing OS devs / relying on the community / using devs located around the world. Largely the business models are completely standard.
- The topic of 3rd world / cheap labour markets and their influence on OS dev models came up. For example, Brazil is making noises about encouraging all their dev to be OS -- does this mean Brazil will fail to benefit globally in revenues since they are unable to capitalise on sales?
- Is it required to have a large, quality code base built PRIOR to going open source? Or can a startup being with a very small codebase?
- How to manage the relationship with your OS community came up -- how do you make money off a project and try to steer it, without alienating the devs?
- Interesting view that OS lowers the barrier of entry for small companies since much of the infrastructure code (and indeed much of the rest) for software can now be aquired off the shelf for minimal cost (integration only)
- The ASP model is also very amenable to OS -- you're selling a service, no-one cares how you built the software.
[If anybody wants attribution for comments / questions let me know]
