The Business Of Open Source

OpenSide
Phone: (801) 319-6764 | e-mail: dan@fellars.com | twitter: @DannyFellars
TheBusinessofOpen
Source
Dan(Danny)Fellars

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aboutme
M.S. Computer Science BuyDansHouse.com
Chile
OPENSIDE

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“HowCanYouMake$$GivingItAway”

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“OpenisforLosers”
-Dave McClure (500 Startups)

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TheHeatedDilemma
http://youtu.be/X0R0toLhmwk

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OpenSourceBusinessModels
“Free software” means software that respects users' freedom and community. Roughly, the users
have the freedom to run, copy, distribute, study, change and improve the software. With these
freedoms, the users (both individually and collectively) control the program and what it does for
them.
When users don't control the program, the program controls the users. The developer controls
the program, and through it controls the users. This nonfree or “proprietary” program is
therefore an instrument of unjust power.
Thus, “free software” is a matter of liberty, not price. To understand the concept, you should
think of “free” as in “free speech,” not as in “free beer”.
A program is free software if the program's users have the four essential freedoms:
•The freedom to run the program, for any purpose (freedom 0).
•The freedom to study how the program works, and change it so it does your computing as you
wish (freedom 1). Access to the source code is a precondition for this.
•The freedom to redistribute copies so you can help your neighbor (freedom 2).
•The freedom to distribute copies of your modified versions to others (freedom 3). By doing this
you can give the whole community a chance to benefit from your changes. Access to the source
code is a precondition for this.
- GNU.org (GPL)

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Agenda
●Walk thru of my quest for
answers
– Locations
– Industries
– Licenses
– Languages
– Lifespan
– Investability
– Business Models
●The Impact of Cloud/SAAS
●Commercial Benefits of
Open Source
●Company Case Studies
●Bees & Trees Analogy
●Final Key Takeaways

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KeyTakeaways
• Commercial Open Source does not have to be
a oxy-moron
• Find the right time and place for when to go
open source
• The model and license matter, a lot
• The move to cloud is both good and bad for
open source
• Limits of Commercial Open Source

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Locations

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Operating
Systems
IndustryImpact
Databases Server/Cloud Enterprise
Software

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CMS
IndustryImpact
Education eCommerce Security

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Application
Development
IndustryImpact
Consumer Mobile Ads/Media

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BSD
OpenSourceLicenses
MIT APACHE
GPL AGPLLGPL
MozillaEclipse OSL

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BSD/MIT
Licenses
APACHE GPL AGPL
MPL/CPL/OSL LGPL

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JAVA
Language
PHP
Python
.NETC/C++
Erlang
Ruby Javascript

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2010+ 2008/09 2006/07 2004/05
2002/03 2000/01 1998/99 <1998
AgeofCommercialOpenSource

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$100M+ $80-$100M $60-$80M $40-$60M
$20-$40M $10-$20M $5-$10M
InvestmentReceived

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Dual License
OpenSourceBusinessModels
Support /
Services
Tiered
Product
Partner
Program
On
Demand
Access
Key
Multi/
Add-on
Products

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Support/
Services
BusinessModels
Tiered/
Dual-License
OnDemand/
Multi-Product
Partner
Program
Donations

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ImpactofCloud/SAASonOpenSource
•Cons
• GPL Loophole
• Less motivation to contribute back to open
source projects
• Full applications less likely to be open
sourced
•Pros
• On Demand Business Model
• More Libraries being open sourced

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BenefitstoCommercialOpenSource
Thanks toJamie Dixon (Pentaho) - jamesdixon.wordpress.com
● Making Open Source a Whole Product (Crossing the Chasm)
● Market Optimization
● Company Culture and Management
● Collaborative Development
● Customer Focus
● Talent Acquisition
● Quality Assurance
● Community, Community, Community
● Quicker Adoption

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CaseStudies
License
Wordpress/
b2-cafepress
OpenX/
phpMyAds
Android
Business
Model
SugarCRM
Mozilla
Industry/
Competition
Education
Business
Intelligence

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SugarCRM
Full Price Discrimination

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Education
Incumbent Pure
Open Source
Commercial
Open Source

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BusinessIntelligence
Incumbants SAAS Open Source

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CaseStudy:OpenSide
Market
Marketing
Automation
License
AGPL
Business
Model
Access Keys
OnDemand
Technology Stack
PHP/MongoDB/Backbone.js

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PureOpenSource

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Proprietary

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CommercialOpenSource

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Support&Services

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KeyTakeaways
• Commercial Open Source is not an oxy-moron
• Find the right time and place for when to go
open source
• The model and license matter
• The move to cloud is both good and bad for
open source
• Financial Limits of Commercial Open Source

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ThankYou
• Feel free to contact me with any questions
• Dan Fellars dan@fellars.com @DannyFellars

The Business Of Open Source

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