No Open Source Business Model

[Authors note: I receive frequent requests from the software supplier community to discuss the various “open source business models” and the “open source software (OSS) market.” My opinion on these subjects are scattered through various other ebizQ feature articles and/or blog posts, but perhaps so scattered that my findings are not clear. This article summarizes all past ebizQ “OSS-business-issue” category findings in one place and links back to more detail in previously posted articles.]



The following is considered heresy by many:

In addition, there are very few “open source vendors,” because most open source software now comes from the same friendly guy or woman in the blue-striped suit (Polo shirt at trade shows) who has always called on you. OSS is very much a means to an end for software suppliers rather than an end in and of itself. Users need to take the same attitude.

Valley wags in particular and others bent on creating new categories of any type of information technology (IT) disagree. That’s because they want to raise capital or unnaturally differentiate product A from product B, the two primary reasons for creating unneeded IT categories. However when I look for an open source-based product or service that is monetized and brought to market in any way uniquely different than various closed-source software has been monetized and marketed over the last half century, I cannot find any examples. Two supporting points to that finding are:

  • The idea of giving away the razor to sell the razor blade predates IT by another half century. I admit that when IT suppliers freely distributed source code prior to system/software unbundling, the code typically ran only on the system with which it was distributed.  So the distribution really did not have the same effect as OSS today but the business model was the same.
  • The idea of “free as in air” software was not new when first described as such in the mid 1980s. In addition, there is really no business model to ascribe to pure “free software;” however it is an interesting cultural phenomenon as described below.

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