[svlug] Business models (was Re: RANT: Ubuntu is Evil)

Rick Moen rick at linuxmafia.com
Thu Jan 21 14:18:26 PST 2010

Quoting Luke S. Crawford (lsc at prgmr.com):

> I believe the vast majority of 'open source business 
> models'  are based around using the open source software to build 
> infrastructure, then selling or otherwise obtaining money in 
> exchange for those services that are provided by the aforementioned
> infrastructure.

There are a bunch of standard analyses on the Web (which Chris
apparently could not bother to look up).  Because this topic's
already been done to death, they tend to be a decade or more old.  One's

   There are at least four known business models for making money with 
   open source:

   1. Support Sellers (otherwise known as "Give Away the Recipe, Open A
      Restaurant"): In this model, you (effectively) give away the software
      product, but sell distribution, branding, and after-sale service. This
      is what (for example) Red Hat does.
   2. Loss Leader: In this model, you give away open-source as a
      loss-leader and market positioner for closed software. This is what
      Netscape is doing.
   3. Widget Frosting: In this model, a hardware company (for which
      software is a necessary adjunct but strictly a cost rather than profit
      center) goes open-source in order to get better drivers and interface
      tools cheaper. Silicon Graphics, for example, supports and ships Samba.
   4. Accessorizing: Selling accessories - books, compatible hardware,
      complete systems with open-source software pre-installed. It's easy to
      trivialize this (open-source T-shirts, coffee mugs, Linux penguin dolls)
      but at least the books and hardware underly some clear successes:
      O'Reilly Associates, and SSC are among them.

Linked from there:  http://hecker.org/writings/setting-up-shop
   Setting Up Shop: The Business of Open-Source Software

There are a bunch of others.  It's a trivial exercise, for example, to
invent a proprietary software business model that centrally uses
copyleft licensing to prevent _others_ from proprietising one's code,
while still allowing the copyright owner to sell proprietary licenses to
the same code.

Those would be the same copyleft/reciprocal licences that Chris claims
prevent "commercialising software" [sic].  (But of course Chris is
merely annoyed when he cannot proprietise _other_ people's software.)

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