Monday, December 01, 2008

Open Source as a Business Model

I've always had my doubts about the open source business model. This piece in BusinessWeek does a great job of explaining the problem. Companies had hoped to add value to open source software by selling support and service. It just hasn't worked out. The most telling quote from the article:
And therein lies the great paradox: Open-source code is generally great
code, not requiring much support. So open-source companies that rely on
support and service alone are not long for this world. The traditional
open-source business model that relies solely on support and service
revenue streams is failing to meet the expectations of investors

Open Source: The Model Is Broken - BusinessWeek
For anyone who hasn't been paying attention to the software industry lately, I have some bad news. The open-source business model is broken.

Companies have long hoped to make money from this freely available software by charging customers for support and add-on features. Some have succeeded. Many others have failed or will falter, and their ranks may swell as the economy worsens. This will require many to adopt a new mindset, viewing open source more as a means than an end in itself.

No comments:


Related Posts Plugin for WordPress, Blogger...