You open source the parts of your product that people won't pay money for. You keep proprietary the parts that people will pay money for. The open source portion promotes your product and fills the top of your sales funnel, and simplifies your marketing: you have a clear set of conversion steps and a very easy to way to fill the top of the funnel (nothing sells like "free").
Nobody wants to pay for ffmpeg. But clearly they do want to pay for slick UIs on top of ffmpeg, because ffmpeg is constantly having to threaten to sue people for violating their license.
Value-adds that people will pay for that scale like products scale:
* User interface
* Seamless integration
* Hosting
* Device support
* Content
* Extra features
Finally, it is always worth mentioning that (a) early-adopter home users are generally not willing to pay for anything but the top 1% of software titles, (b) mainstream home users will pay, if they're going to pay, whether it's open source or not, and (c) starting at around 500 employees, businesses will always pay for software, to the point of shunning software they can't pay for: the P.O. process is an integral part of IT planning for corporations.
Red Hat also starts out in some of the toughest software segments: operating systems and J2EE stacks. That's a side effect of when they were founded and the scale they are now forced to operate at.
There are plenty of software businesses that make money on services that are easier to sell and operate than entire operating systems (for which "service" is a fuzzy concept anyways). For instance: lots of security products require monitoring; in fact, lots of security products deliberately require lots of hands-on monitoring, because that drives services dollars.
Restating, point being, Red Hat may not be a particularly great example.
Agreed. RedHat doesn't make that much money either. I picked it because it’s been around for some time, it’s popular, and because its business model is well-documented.
In comments of original article there is a notion than e.g. Google helps in development of open source projects (Webkit) just because it is cheaper for them (others develop it too). There is another perspective to the issue: Webkit is infrastructure to them - it is an wonderful example of why and where Open makes sense - by developing and fixing Webkit they assure better standards adoption - thus saving money in their "primary" market (search, gmail,...).
There’s always some ratio of developers working for monetary benefit to those working their way up.
Additionally, the corporates can depress wages by pointing to plenty of inexpensive competition in the "working their way up" group. Not only are they getting lots of work for free, but their production costs are reduced as well.
Open Source is simply a modern 'try before you buy' for a majority of products. You cant sell me a sofa without letting me sit in it, you can't sell me a TV without me seeing it running. The assumption that people will buy before they try is almost exclusive to food products, which manage the majority of new customers by referral (or through marketing sugar-laced anything's to children).
Assuming people will buy a software product before they try it is absurd, even Microsoft gives 60-day trials of Office with all new computers. Open Source is no different than traditional ways to sell products. Open Source is simply a more genuine form of shareware, trial-ware and nag-ware.
That's a very limited way of looking at free software.
Free software gives you some very important freedom you wouldn't have otherwise. It also improves software quality ("given enough eyeballs, all bugs are shallow.") and development.
There is nothing in open source that makes it a "try before you buy". In theory a company can sell a product, this product being open source. So with it I should also get the freedom to use it, share it, or modify it.
Plus there is the open source development model that gives other benefits.
I completely disagree. Do you really think the most successful open-source products like the Linux kernel, Apache, and Firefox are "Try before you buy"? As far as these three examples are concerned, there is nothing to buy after "trying" it.
As a user I could as well contract a company to adapt, develop or/and support a free software to my needs. As an example there are all these companies providing services for nagios.
Companies could as well share the cost of a developer to build a software they need.
Open source is just another market force in the software business. If the price of commercial software is too high, open source keeps it honest and is a balancing force.
Ultimately, a world with purely open software is un-sustainable, just as one with purely commercial software is.
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[ 0.75 ms ] story [ 50.8 ms ] threadNobody wants to pay for ffmpeg. But clearly they do want to pay for slick UIs on top of ffmpeg, because ffmpeg is constantly having to threaten to sue people for violating their license.
Value-adds that people will pay for that scale like products scale:
* User interface
* Seamless integration
* Hosting
* Device support
* Content
* Extra features
Finally, it is always worth mentioning that (a) early-adopter home users are generally not willing to pay for anything but the top 1% of software titles, (b) mainstream home users will pay, if they're going to pay, whether it's open source or not, and (c) starting at around 500 employees, businesses will always pay for software, to the point of shunning software they can't pay for: the P.O. process is an integral part of IT planning for corporations.
There are plenty of software businesses that make money on services that are easier to sell and operate than entire operating systems (for which "service" is a fuzzy concept anyways). For instance: lots of security products require monitoring; in fact, lots of security products deliberately require lots of hands-on monitoring, because that drives services dollars.
Restating, point being, Red Hat may not be a particularly great example.
Additionally, the corporates can depress wages by pointing to plenty of inexpensive competition in the "working their way up" group. Not only are they getting lots of work for free, but their production costs are reduced as well.
Assuming people will buy a software product before they try it is absurd, even Microsoft gives 60-day trials of Office with all new computers. Open Source is no different than traditional ways to sell products. Open Source is simply a more genuine form of shareware, trial-ware and nag-ware.
Plus there is the open source development model that gives other benefits.
Ultimately, a world with purely open software is un-sustainable, just as one with purely commercial software is.