The waning of pure play open source
There seems to now be a general recognition that it's tough to make the numbers work with a pure pay-for-support open-source business model.
Not everyone considers this a good thing. But it's the reality of a development model and licensing approach that's gone mainstream, depends in no small part on corporate patronage, and is now widely viewed as simply an efficient approach to developing many types of software. What's struck me recently, however, is not just a cooling of some of the passion around open source as a social movement or alternative to commercial software. Rather, it's what feels like a general and widespread acceptance that business models built around pure play open source simply don't work for the most part.about how pragmatism is trumping ideology throughout open source.
Stuart Cohen, who used to head the Open Source Development Labs (one of the predecessors to the Linux Foundation), had this to say in 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.
In a recent podcast, Matt Asay (GM of Americas for Alfresco) and Dave Rosenberg (co-founder of MuleSource) express a similar point of view. What's striking to me isn't just that folks with strong open-source credentials are making such statements but that, for the most part, people don't find these conclusions especially radical or contestable.
When I say "pure play open source," I'm referring to business models in which a company's products are open-source software and only open-source software. (From the context, I take it that Cohen means something similar when he refers to "the open-source business model.") Such a business model depends on selling support for open source bits given that there aren't hardware or proprietary software sales to subsidize open-source development as a sort of loss leader or complement to the stuff that really brings in the money. (IBM has perhaps most notably leveraged investments in Linux and other open-source projects in this way.) There are various tweaks on this basic approach but they all boil down to driving adoption and building community with open source and then monetizing through support contracts when the software goes into production.
It's hardly a wrong-headed idea. Plenty of companies use open-source software for many tasks and some do indeed want a single point of support for that software--especially if it's being used as part of particularly critical systems.
However, successful models aren't just about reasonable notions, or even reasonable notions that play out in practice to some degree. Rather, they're about numbers. It's not enough to sell something. You have to sell enough of it at a high enough price to turn a profit. And this is where pure play open-source approaches have mostly fallen down. Some companies buy support, but not enough do.