Wednesday, December 31, 2008
Tuesday, December 2, 2008
Open Source: The Model Is Broken
BusinessWeek says "The open-source business model that relies solely on support and service revenue streams is failing to meet the expectations of investors" in the article called Open Source: The Model Is Broken
The author takes a cost sharing perspective on open source. What is common to all companies should go open source and then each company needs to provide add-on value (of some sort) and make money out of this value add. What "value add" is seen as inventions or new business models.
The author takes a cost sharing perspective on open source. What is common to all companies should go open source and then each company needs to provide add-on value (of some sort) and make money out of this value add. What "value add" is seen as inventions or new business models.
Monday, December 1, 2008
Why open source software?
Sometimes I meet people who ask "why do people give away their software for free?" Obviously it is good for users to get what they need without paying anything, but why do anyone want to put a lot of effort into something they give away for free? I believe there are three reasons for open sourcing your software.
Ideological reasons. Some people think that software should be free as a principle, to the best for mankind. The open source movement - http://www.opensource.org/ - tends to take this perspective.
Reduce costs. Organizations and individuals realize that will be cheaper to share development costs with others with common needs or interests. In the case of commercial companies they are interested in sharing costs on software viewed as not creating a differentiation (or competitive advantage) to the business. Apache projects - and in particular the Apache web server - are good examples of this strategy. Nowadays, no company or business believe that they will more successful because they have a better web-server.
Generate revenue. Organizations or individuals who wants to create an extreme volume and visibility for their product and as a "side effect" of the visibility generate revenue, e.g. by advertising or sponsorship like Mozilla gets money from Google, or by converting some of the users to paying customers by selling services and add-ons like RedHat and MySQL.
Ideological reasons. Some people think that software should be free as a principle, to the best for mankind. The open source movement - http://www.opensource.org/ - tends to take this perspective.
Reduce costs. Organizations and individuals realize that will be cheaper to share development costs with others with common needs or interests. In the case of commercial companies they are interested in sharing costs on software viewed as not creating a differentiation (or competitive advantage) to the business. Apache projects - and in particular the Apache web server - are good examples of this strategy. Nowadays, no company or business believe that they will more successful because they have a better web-server.
Generate revenue. Organizations or individuals who wants to create an extreme volume and visibility for their product and as a "side effect" of the visibility generate revenue, e.g. by advertising or sponsorship like Mozilla gets money from Google, or by converting some of the users to paying customers by selling services and add-ons like RedHat and MySQL.
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