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Open Source Business Models

I am apparently missing FOSSCamp because of my high workload, but I offer these notes from the excellent MIT Enterprise Forum Event on Open Source from last year, excerpted from my post MITEFC Open Source Conference Notes

Open Source licenses gemerally fall into in three buckets (Props to Simon Philips for his clear description):

  1. “A”: market forming models allow free use, modification and redistribution. Examples: BSD, Apache.
  2. “B”: Community based (or file-based) models allow free addition, but restrict modification. Such that adding a new file is external to license restrictions, but changing a file triggers the license (i.e. must open-source the changes you made). Examples: Solaris, maybe LGPL?
  3. “C”: Competitor threatening: any innovation needs to use same license: GPL

Almost all open source licenses only trigger when you redistribute - so you can use your modifications or addons internally all you like, as long as the code doesn’t leave your shop.

The previous phenomenon may be a big driver of SAAS/on-demand - a legalistic driver for this new delivery mechanism, rather than the economic/technical drivers often discussed.

Business models for open-source

  1. Support: give away s/w, sell service contracts, subscriptions. Examples: JBoss, RedHat (Is this really an insurance product?)
  2. Dual License: Have a second license that allows commercial use/redistribution. Example: Mysql
  3. Two products: Have a free software product that drives value of a second, proprietary software or content. (interesting)
  4. Hosted: offer as a service/on-demand (per the previous main point above)
  5. Hardware sales / appliance (give away FOSS, sell all-in-one (IBM’s motive?)

Hope all the folks are doing well at the Hilton @MIT, just one block away from my apartment!

This entry was posted on Saturday, October 27th, 2007 at 10:37 pm and is filed under Technology Business, Barcamp, Events. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Reddit This

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