In this post, I elaborate on options of open source business software providers based on my experience with Compiere. This is from the perspective of an open source vendor/provider - and with the assumption that you are looking for an income stream. This is a bit different from the interests of businesses using open source products for income. In the first part of the series, I outlined the development of the open source business model of Compiere, in the second one the dynamics of open source contribution I experienced.
Open Source basics
The fundamental promise of open source is vendor independence, that you can use and modify the the product ... assuming you have the skills and time.
From an commercial open source provider point of view (i.e. you want/need to create income), the fundamental challenge is that users have no obligation to “give back”. This giving back might include contributing product enhancements, helping others or donations.
In addition to providers and users there is a third group: intermediaries, who help end users use the product in exchange for payment. Also here no obligation to give back.
A challenge for commercial open source vendors is that - if the project provides true vendor Independence - despite best intensions, in tough times payments to the open source vendor are in danger of becoming discretionary.
The basic question: How do you want to make money?
After open sourcing your product, your income options are reduced. Here are the usual options:Service based
- Support, Maintanance
- Product add-on / extensions
- Sponsored develipment
- Legal (commercial license, hold harmless agreement)
Are you the real provider?
A provider has the legal rights to the product over and above the Open Source license (i.e. you “own” the product). If you are not the provider, you options are reduced. The usual options for contributors and third parties are consulting, maybe support and hosting and depending on the license, charging for product extensions.