class: center, middle # CSCI-UA 480: OSSD <br> ## Free and Open Source Software - Business Models .author[ Instructor: Joanna Klukowska <br> ] .license[ Unless noted otherwise all content is released under [CC BY 4.0](https://creativecommons.org/licenses/by/4.0/). ] --- ### Sources and Interesting Articles - [Wikipedia's Business Models for Open Source](https://en.wikipedia.org/wiki/Business_models_for_open-source_software) is a Wikipedia article on various business models used in the open source community. - [Explosive growth of open source software](https://techcrunch.com/2017/04/07/tracking-the-explosive-growth-of-open-source-software/) is an article about the growth of and tracking of open source software companies, with the [BOSS index](https://www.battery.com/powered/boss-index-tracking-explosive-growth-open-source-software/) to rank them. - [Musings on open source software business models](https://spot.livejournal.com/327801.html) is an article by Tom Callaway of RedHat (now at AWS) in which he discusses various business models for open source software. - [TideLift.com](https://tidelift.com/about) is the webpage that describes TideLift, a company with a novel business plan that acts as an intermediary between open source software companies and the companies that use their products. - [8 advantages of using open source in the enterprise](https://enterprisersproject.com/article/2015/1/top-advantages-open-source-offers-over-proprietary-solutions) is an article aimed at CIOs to convince them that open source software is good for their companies. - [10 ways to learn more about open source software and trends](https://enterprisersproject.com/article/2018/9/10-ways-learn-more-about-open-source) is an article aimed at CIOs with descriptions of reports, conferences, newsletters, and other media, to educate professionals about open source and its importance in the enterprise. - [The Linux Foundation's 2021 Open Source Jobs Report](https://www.linuxfoundation.org/wp-content/uploads/LFResearch_OpenSourceJobsReport_ver5.pdf) is a report on jobs in the open source world in 2018. To give you some idea, from the report: "Open source continues its long stretch of popularity, becoming the software of choice for businesses large and small." --- ### Sources and Interesting Articles [The Business of Open Source Software](https://productivity-tools.cioreview.com/cxoinsight/the-business-of-open-source-software-nid-18119-cid-115.html) by Danny Windham [The Digital Economy Runs on Open Source. Here’s How to Protect It](https://hbr.org/2021/09/the-digital-economy-runs-on-open-source-heres-how-to-protect-it) by Hila Lifshitz-Assaf and Frank Nagle [Why You Need an Open Source Software Strategy](https://www.bcg.com/publications/2021/open-source-software-strategy-benefits) by Pranay Ahlawat, Johannes Boyne, Dominik Herz, Florian Schmieg, and Michael Stephan [4 successful open source business models to consider](https://opensource.com/article/17/12/open-source-business-models) [The Business Value of Open Source ](https://wso2.com/whitepapers/the-business-value-of-open-source/) [Open Source Within Modern Companies](https://opensource.com/business/16/5/whats-open-source-program-office) is an explanation of why modern software companies need an office that can exert influence on various sectors of software ecosystems, clarify its open source messaging, maximize the clout of its projects, or increase the efficiency of its product development. [SaaS vs Open Core Software: An Introduction](https://gravitational.com/blog/open-core-vs-saas-intro/) --- class:center,middle ## Open Source is NOT a Business Model -- ## but, ## there are business models that are ## built around open source projects --- class:center,middle ## What is _the first_ company that successfully made money around open source software? -- <br><br><br> ## RedHat --- ## [4 successful open source business models to consider](https://opensource.com/article/17/12/open-source-business-models) by Daniel Rubinstein -- - Support and services - Advertisement partnerships - Paid additional features (a.k.a., open core) - Software-as-a-Service (SaaS) --- ## Open core The idea is to keep two _versions_ of the software: - provide the core of the project as open source - keep addons, customizations, improvements as proprietary -- Form [Musings on open source software business models](https://spot.livejournal.com/327801.html) is an article by Tom Callaway: >The purpose of the proprietary software is to improve the usability of the open source “core”, and the business model is structured around the belief that customers want to use the “core” but get value from the usability wrapper. In other cases, there is a proprietary fork of an open source core, which contains extra features not found in the “core”. --- ## GitLab - [What to consider with an open source business model](https://about.gitlab.com/blog/2019/07/05/thoughts-on-open-source/) - Discussion between GitLab CEO Sid Sijbrandij and OSS Capital founder Joseph "JJ" Jacks: [open core definition and how GitLab got there](https://youtu.be/jk_DNX8LGuM?t=140) --- # Software Consulting - provide consulting to other businesses regarding the use of open source in their daily operations - provide consultation for starting and running an open source project --- # Subscription Offerings - provide services that accompany the software that is otherwise available to anyone who wants it - examples of such services: - installation - maintenance - training - localization - day to day support --- # Donations - provide the software or service and encourage donations - sell products branded with the company name Examples: - [Mozilla](https://www.mozilla.org/) - collection of web-tools, [How Does Mozilla Make Money? Mozilla Business Model Analysis](https://fourweekmba.com/how-does-mozilla-make-money/) - [Wikipedia](https://www.wikipedia.org) - open encyclopedia --- # Software as a Service (SaaS) - customers subscribe to an online service (the software running there is open source, but it is the service that generates revenue) - started as a result of industry frustration with _commercial off-the-shelf_ (COTS) software that was hosted on premises and managed by local IT - frequent overlap with open core model (i.e., companies can do both) Examples: - [Wordpress](https://wordpress.com/) - [Blackboard](https://www.blackboard.com/) - [AWS](https://aws.amazon.com/) --- # Dual Licensing / Selling Exceptions - software is available under the open source license, - exceptions to that license are made (for a fee) to allow a third party company to use it under different rules Examples: - [MongoDB](https://www.mongodb.com) - database - [MySQL](https://www.mysql.com/) - database --- # Peace of Mind - acting as a middle-men between the company consuming the open source software and the open source project itself - charge the consumer in exchange for guarantees that the project will be supported and will continue development - support the open source project (financially) --- # Bounty driven development - third party companies using the open source software pay to have the bugs fixed and new features implemented Examples: - [Caprine](https://sindresorhus.com/caprine/) - [GitHub Sponsors](https://github.com/sponsors) --- ## Reasons companies may want to (or should) use open source [The Business of Open Source Software](https://productivity-tools.cioreview.com/cxoinsight/the-business-of-open-source-software-nid-18119-cid-115.html) by Danny Windham [8 advantages of using open source in the enterprise](https://enterprisersproject.com/article/2015/1/top-advantages-open-source-offers-over-proprietary-solutions) ---