10 Business Models leveraging Open Source

Roberto Galoppini provides an interesting list of Open Source business models  in the context of the Flossmetric project. They have identified 6 main clusters  to which I added 4 more:

1- Dual (or twin) licensing: Companies distributing software with both a GPL-like license and a commercial (i.e. fee-based) license. (For those wondering, Wikipedia explains dual-licensing pretty well). The key idea is to secure and to leverage the rights from all the contributors involved. Examples include:

• Funambol (Mobile Platform / Development)
• SleepyCat/Oracle (Embedded DB)
• MySQL/SUN (MySQL as in LAMP )
• TrollTech/NOKIA (Mobile Platform)
• Pentaho (Business Object made FOSS)
• MuleSource (SOA platform)

2- Split (or mixed) model: usually companies distributing interesting commercial (fee-based) plug-ins on a FOSS success (e.g. Firefox) with a liberal license (e.g. Mozilla MPL). Thin line to walk since plug-in can always be developed / reverse engineered by FOSS developers. Examples include:

• Hyperic (IT Operations/Monitoring) 
• SourceFire (The Intrusion Detection System SNORT made commercial) 
• Zimbra/Yahoo (messaging / groupware)
• XenSource/Citrix (virtualization)

3- Badgeware: Basically a makeover of the idea behind the original BSD license related to advertising and visibility clauses.  In short: you can use it but you’ve got to advertise us. Examples include:

• SocialText  (Enterprise Wiki) 
• OpenBravo (ERP) 
• Jbilling (Billing software)

4- Specialist/Vertical:  The code is distributed free but support, training and consulting are provided by the company. Some also provide on-demand/SaaS. Examples include:

• Alfresco (Content Management)
• Compiere (ERP, CRM)
• vTiger (shares FOSS w/ SugarCRM)

5- Platform providers: Close to the previous one (specialist) but focusing on larger environments (e.g. Linux). Often distributing “closed” distribution guaranteeing stability, enterprise support etc. Examples include:

• JBoss/RedHat (Enterprise Application Server/ SOA)
• Red Hat (well they do so many things nowadays ..) 
• Suze Linux/Novell (Linux distro made Enterprise)
• EnterpriseDB distributing PostGreSQL

6- Consulting companies specializing in FOSS zillion of them ...

A few others have been in my opinion misclassified or forgotten altogether by
FOSSmetrics:

7- Componentry:  Companies extending the model of Specialist (above) to a set of simpler and useful components. Often plays on "fear" (your code is contaminated!) and “certification” (be safe, sleep tight, we guarantee). Examples include:

• Spike Source
• SourceLabs
• OpenLogic

8- Search engines How to find the right source code and its license? And yes, Google is here too and also a few VC-backed companies thinking in the worst case they can always turn into FOSS
management companies… Examples include:

• Google code search (Labs) (note: don't want to offer the AGPLv3)
• Koders 2-4 M pages /day according to Alexa (update: acquired by Black Duck 04/28/08)
• Krugle
• Codase
• CodeFetch

9- Community/Resources The traditional repositories but also various and large forums/discussion boards. Examples include:

• SourceForge/SourceForge Inc.
  
• FreshMeat/SourceForge Inc.
  
• The Code Project
• Ohloh (uses CollabNet platform)
  
• EOS Directory

10- FOSS management/Compliance The idea here is really to play on people’s fear that their proprietary software might have been contaminated by a GNU-like license. Hence products and services geared towards cleansing, identification and Open Source compliance enforcement.

• Black Duck the leader (update: acquired Koders O4/28/08)
  
• Palamida  the distant follower
  

 

Obviously "Free" in "Free Open Source developer" does mean "Free" as in "Free beer"!

Resources:

• Here is a nice list of papers, research and articles about open source business models
• Mat t Asay's analysis of the Red Hat model
• Chritsopher Keene's Silverado rules for open source success
• The secrets of Ubuntu's business by Tristan Rhodes

Comments

[Zeth]

11. Get bought by some big firm and become a millionaire:

* MySQL/SUN (MySQL as in LAMP )
* TrollTech/NOKIA (Mobile Platform)
* Zimbra/Yahoo (messaging / groupware)
* XenSource/Citrix (virtualization)
* JBoss/RedHat (Enterprise Application Server/ SOA)
* Suse Linux/Novell (Linux distro made Enterprise)
* SourceForge/CollabNet

[jm]

Millionaire? yeah, that or getting a t-shirt: http://blog.milkingthegnu.org/2008/03/1-million-dolla.html

[Onefineham Internet Marketing]

GNU Software has provided a lot of opportunities for individuals to earn a modest living online using blog platforms and widgets.

I for one am extremely grateful for the model and have made donations to numerous theme and widget programmers.

[Home Internet Business]

Programmers should contribute more open sources to the benefit of more people who can't afford costly software to start their internet business. This will make the big business firms to price their product reasonably.