[TriLUG] Can open source solutions be viable companies?

[Thunder Bear]

On Fri, 2002-06-28 at 08:48, Vestal, Roy L. wrote:

> Question to me:
> "Do you have pointers to info on how open-source solutions can still be
> viable companies.  There is a big debate in the bioinformatics community
> about this, and I thought you might have some info."

I better get ready to dodge some tomatoes here.

I'm not convinced that it is wise to build a business model that uses
Open Source as the focal point.

Many companies have tried in the last few years, and most have failed. 
I even question that Red Hat has been able to make much money off of
their open source products.  Remember, they've made a lot of
acquisitions and some of those acquisitions may possibly be responsible
for the bulk of revenue.

"Open Source" is more attractive to developers and hardcore geeks than
it is to your average joe on the street.  What is an architect going to
do with the kernel source?  Nothing.  Maybe compile it once with a lot
of handholding.  The focus on Open Source IMHO has very little market
appeal.  It's a tough sell.

Now open sourcing your software can be the responsible thing to do, and
it can help to rally geek support for your product which can help to
sell it when geeks recommend to their friends and clients to use your
product.  But your business model will still have to be based on a
proven model in order to be viable after the VC money dries up.

I think IBM has stumbled on a good hybrid solution, and if it pans out
for them maybe we will see broader support of an Open Source development
model there.  Currently only a few products that I am aware of are open
source there, and they are products that already existed that IBM jumped
in on (except for jikes which I haven't heard anything about in a long
time, and postfix which is not maintained by IBM).  There may be
others.  But  I doubt IBM would be involved in these projects at all if
they weren't making money off of them with their consulting division,
IBM Global Services (which was making money hand over fist BEFORE they
dabbled in open source).

Remember the anecdotal story about how RMS got all fired up and started
the FSF?  IIRC it was all over a printer driver more or less, wasn't
it?  Well that is a good example.  Go ahead, sell printers.  Sell lots
of printers.  Make your money there.  Open up the source to the
drivers.  The few customers that can do anything with that will be very
happy, and you might even get some useful patches back.  The geek
community would likely rally around that particular manufacturer.

Anyway I have my wife looking over my shoulder, giving me the evil eye. 
I have to get going.  Sorry I won't be able to participate in the debate
that this will likely start.  Maybe some late replies from me in a week?

-- 
-=[*Thunder Bear*]=-
+[Upchuckee Nation]+
"TRILUG, Free as in Beer."