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