Economic Free Software Perspectives
“How do you make money with
was a very common question just a few years ago. Today, that question has evolved into
“What aresuccessful business strategies that can be implemented on top of FreeSoftware?”
In order to develop business strategies, it is first necessary to have a clearunderstanding of the different aspects that you seek to address. Unfortunatelythis is not made easier by popular ambiguous use of some terms forfundamentally different concepts and issues, e.g. “Open Source” being usedfor a software model, development model, or business model.These models are orthogonal, like the three axes of the three-dimensionalcoordinate system, their respective differentiators are
axis is the one that is discussed most often. On the onehand there is proprietary software, for which the vendor retains full controlover the software and the user receives limited usage permission through alicense, which is granted according to certain conditions. On the other handthere is Free Software, which provides the user with unprecedented controlover their software through an ex-ante grant of irrevocable and universalrights to use, study, modify and distribute the software.The
axis describes the barrier to collaboration, rangingfrom projects that are developed by a single person or vendor to projects thatallow extensive global collaboration. This is independent from the softwaremodel. There is proprietary software that allows for far-reachingcollaboration, e.g. SAP with it’s partnership program, and Free Softwareprojects that are developed by a single person or company with little or nooutside input.The
axis describes what kind of revenue model was chosenfor the software. Options on this axis include training, services, integration,custom development, subscription models, “Commercial Off The Shelve”(COTS), “Software as a Service” (SaaS) and more.These three axes open the space in which any software project and anyproduct of any company can freely position itself. That is not to say all thesecombinations will be successful. A revenue model based on lock-in strategieswith rapid paid upgrade cycles is unlikely to work with Free Software as the
1Data and text was partially adapted from the results of the EU projects FLOSSMETRICS and OpenTTT (opensource business models and adoption of OSS within companies), COSPA (adoption of OSS by publicadministrations in Europe), CALIBRE and INES (open source in industrial environments). I am indebted withGeorg Greve of FSFE, that wrote the excellent introduction (more details on the submission here:http://blogs.fsfe.org/greve/?p=260 ), and that kindly permitted redistribution. This text is licensed under CC-by-SA(attribution, sharealike 3.0)http://creativecommons.org/licenses/by-sa/3.0/. I would grateful for an email to indicateuse of the text, as a way to keep track of it, at firstname.lastname@example.org.
2Free Software (defined 1985) is defined by the freedoms to use, study, share, improve. Synonyms for Free Softwareinclude Libre Software (c.a. 1991), Open Source (1998), FOSS and FLOSS (both 200X). Following scientifictradition, FSFE prefers the first established term, which is used in this appendix. For purposes of this document, thisusage is synonymous with “Open Source” by the Open Source Initiative (OSI).