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Greed is good: 9 open source secrets to making money

Peter Wayner | Oct. 16, 2013
Low-cost marketing, hard bargains, keeping competitors in check -- profiteering abounds in the open source community

Michael Tiemann, one of the founders of the early open source powerhouse Cygnus, once said presciently, "Fortunately, the open source model comes to the rescue again. Unless and until a competitor can match the 100-plus engineers we have on staff today, most of whom are primary authors or maintainers of the software we support, they cannot displace us from our position as the 'true GNU' source. The best they can hope to do is add incremental features that their customers might pay them to add. But because the software is open source, whatever value they add comes back to Cygnus."

While this can sound like an evil monopolist speaking, the idea has limits. If the leader does a bad job, invests in silly enhancements, or squanders its revenue on worthless add-ons, a new fork can steal the momentum. It's not impossible.

This rule limiting the power of forks doesn't hold if there are two legitimate reasons for the separate code bases to exist. If there are two distinct uses for the software, two different groups can easily specialize in both. The competition can survive if it serves a different and distinct market.

Open source profiteering strategy No. 7: Open-source to drive a hard bargain
While many open source licenses are flexible, some are increasingly Draconian. One of the newest, the Affero GPL, insists that the code must be shared if the code is merely running on a public server. The license emerged after some in the open source community noticed that some developers were benefiting from open source software but avoiding the requirement to share their own contributions. They weren't "distributing" the software, just running it, and the GPL only forced sharing when you "distributed" the software.

Some developers find this requirement easy to follow. They may be just experimenting or merely offering a free service. Sharing their own improvements doesn't put them at a competitive disadvantage. But many in business find the rule more trouble than the cost of buying a commercial license. The strength of the license helps nudge them to support the product.

The AGPL is a popular choice for many of the newer projects like the various NoSQL data stores. MongoDB, for instance, adopted the license for its core tool: the database. The company chose to protect the drivers, though, with the more lenient Apache license to encourage people to link to its core offering.

Open source profiteering strategy No. 8: Open-source to develop shared standards
Every business and marketplace needs a set of standards so that customers know what to expect and businesses know what to build. Open source can often help create these standards of interoperability.


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