Making Money From Open Source

An interesting discussion has been spreading across some of the Domino Blogs since the London Developers Piss Up Meeting the other night. How can people make money from Open Source development?

As the number of Open Source projects for Lotus Domino increases there does come a point when somebody will want to start making money. As Steve Castledine mentions in a response on NotesTips, Open Source doesn’t pay the bills.

Steve has jumped onto one of the many ways of making money from open source software by splitting the license agreement so that personal use and non-profit organisations can make full use of his offerings without having to pay a license fee while commercial companies that make profit would have to pay a fee. The only issue with this is hoping that commercial companies will make the payments and not just use the software without paying.

Another way of making money from open source software is not by selling the software but by selling the service and support that goes along with the software. Take the OpenNTF mail template for example. If you have a big customer who is using ND6 why not show them the mail template. Show off the features. Sell the IDEA to them, then when they buy in charge them what ever it takes to roll out the product within their environment. Then charge them again for supporting it.

The same can be applied to BlogSphere. If you know a company that needs a website and you think BlogSphere can fit the bill then sell them the IDEA and then charge them the time it takes to configure the template to suite their environment. Use it as a base point for a new application. Use the ideas for developing a customised application. The main point is your not selling the template itself, your selling the service and support.

Don’t think it could work… Look at Linux. It is an open source OS. Go to RedHat and download it for free. No Support No Help. Yet their Enterprise server edition can cost upwards of 800 dollars for the software, printed manual and service and support.

That is how we make money from Open Source Software.

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13 comments on “Making Money From Open Source
  1. Bruce Elgort says:

    Nice blog post Declan. There are several people of who have made big $$$ off of the OpenNTF Mail Template and I suspect that people will do the same with the domBulletin project and with Blogsphere. Sell the IDEA! 😉

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  2. I think you have to ride the wave when it comes to corporates using software with no licence – common practice – you have to accept you wouldn’t get money from them anyway.

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  3. You see Bruce – thats the problem – someone else makes the money – you have done the work!

    I think the model of providing Open Source software – and then hoping to make an income from Services etc is flawed for Lotus Notes – as the original author does not exist in the income side of the model.

    Do the companies that take the Open Source software – install it and charge for it – give the open source author a kick back? – No is the answer – they just give back the bugs and problems.

    Plus you have made your code Public Domain – so you cannot even make a living from that.

    So I maintain – Open Source – for the Open Source authors is hobby only – unless someone can give me a model that works? The only people that can make an income from it – are the 2nd line people that sell and charge for it.

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  4. Open Source doesn’t automatically mean no license, the GPL is a license.And the other way organisations make money from open source is not by selling software but by using the software they offer as open source.Some companies recognise that selling the software is not their primary business but they they will gain from using it. Releasing it as open source means that they can get more development input into it than they’d be able to pay for.

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  5. Bruce Elgort says:

    Steve, thanks for your comments. I think you need to hire a sales person 😉 I mean it…get somebody to help sell your hard work for you. Let me know how I can help. Time to head to work.

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  6. Nathan T. Freeman says:

    What makes you think that anyone else on OpenNTF isn’t on the “cutting edge”? If you’re a self-promoting developer, then you’re self-promoting and self-marketing whether you’re giving away tools or not. I don’t have an employer that pays me. I have contract gigs that I generate. And open source is a killer tool to draw attention on that.

    You have a job you enjoy that is paid for by someone else who has to worry how they bring money in the door.

    This is not an accurate picture of Bruce. Nor I. Nor any number of participants at OpenNTF.

    [i]If Declan suddenly loses his job – how will Open Source help him? – The same as you – recognition may increase his chances of getting further employment. [/i]

    How do you think marketing yourself helps anyone? If you already have a steady job, self-marketing to the world isn’t going to get your promotion at your current job faster. That’s not how it works.

    [i]Open Source for Lotus Notes struggles to break out of a ‘hobby interest’ and doesn’t match ‘commercial interests'[/i]

    I really didn’t think it was necessary in the post-.com era to explain to software developers that work is personal, and that commercial pursuits which don’t dovetail with personal pursuits are generally a bad situation.

    [i]All the contributers of openntf are ‘hobby contributers’ – they do the work in their spare time – and ‘give’ to the project. They receive nothing for it – the people that then make the money are the commercial companies who pick up their hard work for free and go to their clients and charge them to install/support etc [/i]

    That is, again, simply not so. There is an extensive case-history in open source for the “bounty” project. And I’ve personally been paid to develop on OpenNTF projects, in order to deliver a customer-specific need that they wanted supported by the open community.

    [i]IF you were the open source developer who is now out of work and you said to these commercial companies – hey you – im broke – you just made a packet out of me – fancy donating to my cause – what do you think they would say?[/i]

    Is that your marketing plan, Steve?

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  7. Bruce you see thats the difference – and what makes it a great debate – we are at the opposite sides of this – im at the cutting edge of it all – the guy thats has the ideas and i’m the freelance developer – the one thats does the shop floor stuff – don’t have the employer that pays me – I’m the employer! – so as with any business – you have to be financially self sufficient – and you write and sell software to do that.

    You have a job you enjoy that is paid for by someone else who has to worry how they bring money in the door. So to you then (correct me if im wrong) Open Source is a Pension – maybe you call it in when you need to (your making a name – recognition) – but not as hard cash – but as “hello i’m Bruce, I acheived this maybe I should work for your company”?

    I would then take Declan as another example – I expect he too has a job – so is paid – development on blogsphere is a hobby – as it is outside of work – he receives nothing for it – apart from recognition. If Declan suddenly loses his job – how will Open Source help him? – The same as you – recognition may increase his chances of getting further employment.

    So my point being – Open Source for Lotus Notes struggles to break out of a ‘hobby interest’ and doesn’t match ‘commercial interests’ – as it stands – which is why I am so interested in peoples views on this – because I would love to be proved wrong!

    All the contributers of openntf are ‘hobby contributers’ – they do the work in their spare time – and ‘give’ to the project. They receive nothing for it – the people that then make the money are the commercial companies who pick up their hard work for free and go to their clients and charge them to install/support etc

    IF you were the open source developer who is now out of work and you said to these commercial companies – hey you – im broke – you just made a packet out of me – fancy donating to my cause – what do you think they would say?

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  8. Nathan T. Freeman says:

    “Do the companies that take the Open Source software – install it and charge for it – give the open source author a kick back? – No is the answer – they just give back the bugs and problems. ”

    Uhh… wrong Steve. People like Torvalds and Cox have made MILLIONS from Red Hat and VA Software. Even Eric Raymond was on the payout list for Red Hat, and he didn’t contribute a single line of code.

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  9. Hi Nathan – I would be interested in what model they used to acheive that (in fact when I get a chance I will research it) – but as it stands the Lotus Notes model as we know it doesn’t allow for it – so like comparing apples with pears.

    Thats how I see it – until someone can show me different – are you and Bruce getting kick backs from installations of the openntf mail template?. If not what is your motivation? – just achievement – recognition? – neither pays the rent!!

    I’m sure (and I am quite willing to be corrected – I would never put myself out to be the person who is right – just my current understanding) you could never acheive the same with Lotus Notes because of the way the design is structured – which is a million miles away from coding linux etc.

    I would then seriously like to know how you think you would achieve with individual Lotus Notes appliacations the same as achieved with Red Hat? – so its still apples and pears to me (and those that do not understand that – in England it means comparing two opposites – like trying to fit a circle into a triangle in those baby shape play toys!).

    I’ve a stash of software for Domino that is 80% complete – I would love to Open Source so I can move on to the next idea – I’m yet to be convinced of where the author benefits outside of hobby acheivements – and when you are a freelance developer – that is important!

    So having said the above what makes me wrong? Because if you can give me the answer to that – im going back to spain and rubbing my hands with glee with all the money I could make!! – Remembering I am refering to Lotus Notes Open Source – not Open Source in General.

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  10. Bruce Elgort says:

    Steve, just a quick note as I head out the door…..I haven’t personally made a cent off of my OpenNTF efforts however, I have established many new relationships, resources and friends. Someday I may need to cash in on these to pay the rent. For now I enjoy my day job. I am specifically curious as to why you think the model can’t work and I am serious about helping you in any way I can.

    Bruce

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  11. Here are some interesting comments echoing Steve’s from Hans Reiser the bloke who created ReiserFS.http://newsforge.com/article.pl?sid=03/04/28/1859244

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  12. Declan Lynch says:

    Does OpenNTF have a standard license agreement that can be tagged onto all OpenNTF releases? At the moment I don’t think it actually has any license agreement.

    Maybe one should be drawn up. Invite as many people together to suggest the terms and conditions that they would like to see, take all the ideas and draw up an agreement and then publish it for approval.

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  13. If you want to make the software the comodity, then don’t release it: try to sell it and take your chances.However, if you want your services to be the commodity then the ‘open source’ way (what ever that is?) might serve you. How? Well not directly! You can’t expect to release code then sit back and rake in the cash. But it may do the following:- improve the quality of the products you use to provide your services by getting others (possibly withother skills) to help the development of them- improve your skills- improve your reputation- give you access to useful contacts- give you exposure to a wide range of skills/knowledge/experience from others you may not ordinarily meet.All of the above will increase the value of your services.As a consultant I think that the quality of your services are the most important thing, not the pieces of software that your develop. Software comes and goes and what’s groovy today will be common-place in a year. Face it, clients don’t really care which piece of software you deliver as long as it works, and solves their problem. What they care about is if they can trust you, and if they have confidence you can solve their problems.I think this is what people gain from releasing software as open source. Look at Apache! Think they’re crying foul about all those greedy people making money by installing their free web-server?

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