Why you should sell open source software

http://luminotes.com/blog/why-you-should-sell-open-source-software

by witten • 18 years ago

31 40 18 years ago

sgrove• 18 years ago

Witten actually gave me quite a bit of advice on open sourcing my application, and he mentioned quite a few of these points. I think there might have been some additional benefits as far as marketing/legitimacy are concerned that he might have mentioned, but he makes a good case for selling open-sourced software.

Depending on your market, only a small minority are driven to invest the energy (time is money) required to get no-cost software - paying someone to have a ready-to-go package is simply more efficient.

cschwarm3• 18 years ago

I believe he misses some important points:

(1) The core problem are professional "free-riders" -- Linux distributions being the main candidates. As soon as they include his software in their repositories, his sales will probably stop to increase.

(2) For Linux distributions, it's also hard to make ready-to-go packages. Looking at his download page, there's no sign whether his package installs properly. Can I even use it? Is it RPM or DEP? Or some sort of .run package that needs to be made executable, first?

(3) Expensive software is unlikely to be sold under an Open Source license: think dental office billing systems, for example. Everything more expensive than, say, $25 will make people get the software elsewhere or use the source.

Nevertheless, I agree that selling open source software may provide some benefits for the seller.

witten13• 18 years ago

1. I've actually considered not charging for the Linux version and only charging for the Windows and Mac versions. From a cultural perspective, Linux users simply don't buy software. No value judgment there, but simply a statement of fact. (I'm a Linux user myself.)

2. I don't yet have official packaging yet for Linux, but I plan to start with Ubuntu and Debian debs when I do. Right now it's just a tarball.

3. You're probably right that expensive software is going to be a harder sell when the source code is available for free. When I wrote the article, I had end-user software in mind, which generally isn't that expensive.

aditya• 18 years ago

I think this is a fantastic idea, but aren't you worried that someone will take your source code, launch a clone, market it well and make a billion trillion dollars?

witten13• 18 years ago

I suppose it's possible, but pretty unlikely.

But let's say it does happen. I'm still the foremost expert in the world on this particular piece of software. Chances are I can develop it faster and better than anyone else. (This isn't to say that I'm a really good coder -- I'm not. It's just that I wrote this software and understand it very well.)

Now, you brought up marketing, so I suppose in this hypothetical example, someone could clone the product, rename it, and just concentrate on marketing rather than development.

Well guess what.. Anyone can do that anyway even without the source code! Most web-based software is fairly easy to clone. Having the source code just makes that a little easier.

omouse• 18 years ago

I would hope so. Then you don't have to work on the project anymore and you can move on to something else. OR you could take their source code and modify it and make it even better!

Anon84• 18 years ago

In most cases, the big question is...

Why should you buy open source software (assuming the source is freely available)

witten13• 18 years ago

Because for end-users, it's more convenient than building the software from source.

coffeeaddicted• 18 years ago

I'm using a lot of open source software which I didn't build myself from source. That's what distributors are doing. It seems to me you are selling the additional service of building the software. I guess it might work because you also got the name - people who know it want to get it from you.

markessien• 18 years ago

All you need is one programmer to make the binaries, and all the users can then use it with just as much ease, instead of purchasing from you.

qhoxie• 18 years ago

He dedicates a large portion of the article to answering that.

Okay, so then the obvious question is: Why would anyone actually pay for open source software rather than just downloading it for free? ...

huhtenberg3• 18 years ago

The biggest problem with open-sourcing commercial software is the risk of a blatant ripoff.

Some entrepreneurial spirit will come along, replace the application icon, repackage the whole thing and start selling it as his own. Perhaps just in his own country, perhaps you won't even notice, but it will eventually surface and you will need to deal with the situation. Now the question is if you want to spend your time and nerves on resolving the issue or would you rather continue working on the product. Especially if you are a "lone programmer" and especially if opening the source doesn't give you much to begin with.

witten13• 18 years ago

Let's say this happened, and someone in a random foreign country made a clone of my software and started selling it there. Would that really cut into my sales? Or would that perhaps increase the legitimacy and recognition for the type of software I'm selling, if not for the specific brand I'm hawking?

huhtenberg3• 18 years ago

It has less to do with cutting into your sales, and more with jeopardizing your IP and ownership rights. If this sort of theft is left unattended, the other side may start asserting its non-existing rights and escalate the situation.

It all really comes down to the risk tolerance. Opening the source establishes great deal of a goodwill towards your customers and potentially provides you with an access to free improvements and bugfixes. On other hand it opens you to the risk of needing to actively protect your IP rights, which is something that not everyone want or can do.

That's not even getting into how emotionally draining these incidents can be. It requires a really thick skin and a strong ability to ignore being taken an advantage of. Again, not everyone's traits.

wizlb5• 18 years ago

My company sells their software worldwide, so yes, it will cut into my sales.

Also, I sell telephony software so I don't need any more legitimacy or recognition.

known3• 18 years ago

If I have seen further it is by standing on the shoulders of giants. -- Isaac Newton

orib• 18 years ago

One interesting point to note it is certainly not an issue to sell the source to your program in a bundle with the binaries, allowing enterprising hackers to modify and update the software. You could even allow distribution of these changes.

Allowing this doesn't mean that you are forced to give up copyright on the source, or release it under an open source license. A license that says "You may have, modify, and distribute modifications to the source, but not duplicate or redistribute it" is certainly something that I would find interesting, and would love to see more software released under.

cschwarm3• 18 years ago

You may like to look at the license used by TheKompany [1].

[1] http://www.thekompany.com/products/licensing.php3

wizlb5• 18 years ago

"In other words, if you decide to make your end-user software open source, most of your users probably won't even notice!"

So, why do it then? The two points made by this article don't really motivate me.

1) "Selling closed source software is roughly analogous to selling someone a car with the hood welded shut."

First of all, we are not selling cars. Software is sold more like an HDTV, dvd player, mp3 player, etc. How many of those products really make it easy for you to fix it yourself? The answer is: It doesn't matter. These are throw away products. If it stops working for you, buy a new piece of software or an upgrade.

Don't give away your product just to please a couple of gear-head customers that can code.

2) "Your source code,...is very likely completely uninteresting to almost everyone else."

This is such a bullshit statement. The fact is that while my source code may not be that special, it's ALREADY DONE. If I don't open source it then potential competitors have to spend the time to get to where I am at.

witten13• 18 years ago

1. It's a rough analogy as I said, and honestly I don't think either the car analogy or the consumer electronic analogy is a good one. Most software is not a commodity, and unlike a DVD player, if it breaks you don't just go out and get a new one. At the very least you fix it so you can figure out how to get your data out of it. And of course, software isn't exactly a physical thing, either, so both analogies break down even further.

2. Any legal competitor who uses your source code will have to abide by the exact same open source license (unless it's BSD), meaning that you can incorporate any improvements they make directly into your original product.

wizlb5• 18 years ago

1. I agree that both analogies break down. However, my point stands: Just because a consumer can't fix a product themselves doesn't make the product inherently evil or bad or anything like that.

2. Okay, but that doesn't really address my point. If you don't open source the software in the first place then there are less potential competitors and therefore more potential money for your business.

Look at how well Salesforce does against SugarCRM. Which one do _you_ want to be?

vizard• 18 years ago

Doesnt Pascal's wager type of argument apply here? Opening the source has very little benefit in most cases while opening the source presents a very real danger of clones.

procrastitron• 18 years ago

Pascal's wager only applies if you simultaneously discount the benefits of having contributors and play up the risks of clones. This seems backwards to me; it would take much less effort for someone to contribute to your project than to fork a new one. As such, you should get more contributors than competition.

trapper2• 18 years ago

The biggest thing you are missing is that it potentially limits growth. Most entrepreneurs I know want to create wealth far and beyond what you can make with a small business. You are much less likely to do that with open source, as you either have to scale service (e.g. people, your costs increase linearly as revenue increases) or compete on price (as you get more popular, your margins decrease as the market becomes more competitive) while maintaining the product.

I'd like to hear from some people with a 10-50M sales revenue (not service) product per year who have made the switch, or considered it. Somehow I can't see it happening.

sovande• 18 years ago

Since your product seems to be coded in python the source is kind of "open-source" already isn't it? Also its not the commercial competitors that will screw you, the real danger is if someone will find your project interesting, disagree with some small thing, fork it and release it as a new free open-source product, get a few more people interested to contribute so you as a one-man-shop can't keep up and thereby replace your product with a _real_ open-source product. Heck, I'm almost tempted to copy your repository, do some simple query-replace and put it up on google code just to make a statement and see how you turn-coat and will start complain and whine in your next blog post.

witten13• 18 years ago

I could very well strip all comments and distribute just pyc files. Those can be reversed to commentless source, but it's not exactly as useful as the original source code. And honestly, anyone could clone the product just fine even without the source code.

If you really want to fork the project, go for it. That's within your rights as per the GPL license. Just as long as you continue to abide by the license yourself. If your fork turns out to be better than my code, and more people end up using it, then you probably deserve any users you "take away" from me.

If, on the other hand, you're just forking the code to be surly, then that's within your rights too.

known3• 18 years ago

A smart thief may exploit a bug (buffer overflow etc) in closed source banking software system and siphon away funds. This may continue till someone from the bank or the software company notices this bug.

Why you should sell open source software

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