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Greed is good: 9 open source secrets to making money

Peter Wayner | Oct. 16, 2013
Low-cost marketing, hard bargains, keeping competitors in check -- profiteering abounds in the open source community

The trick is to make sure that the moneymaking features are compelling enough to support the rest of the product. They should be a small part of the product but crucial for the folks who will pay. Sometimes the extra may be a feature that increases stability for enterprise clients that want their software to run smoothly 24/7. Others offer privacy and force users of the open source version to broadcast their work to the world. These small features are supporting hundreds if not thousands of companies today.

Open source profiteering strategy No. 2: Open-sourcing code to reduce support costs
Have a problem? Here's a stack of code. Figure it out for yourself.

While it sounds callous, many open source companies rely on pointers to the source code when dishing out support. The proprietary companies need to write a complex description of what the API does, but the open source companies just point to the API gateway that does the decoding. Anyone can read the source — and many do. It's now common for companies to run a support forum next to the code with open debate about the software. It's just faster.

Good, well-documented open source software can be a gift for everyone involved. The able customers can answer their own questions without waiting for a support technician to dig up the code. The support team can save themselves the hassle of trying to translate the code into English. Done well with a vibrant community, everyone can benefit with access to the open source.

Open source profiteering strategy No. 3: Open-source to reduce development costs
Your company needs a tool or library or component. Developing it in-house would cost big bucks. Now imagine there's an open source version that does half of what you need already. Paying for someone to add the necessary features may look foolish or generous or both because the open source license will mean all the additions must be shared with everyone. But it will also cut the development bill in half. If the software isn't a critical part of the business, this can be a smart way to slice development costs while appearing to be magnanimous and devoted to the community.

Some companies solve these problems by paying the developers they know and trust. Others advertise for people who are already contributing to the project. A number of crowdfunding sites like BountySource let users pool their money to sponsor programmers to deliver the code. They come and go, but the idea lives on.

In some situations, a group of companies can rally around an open source code base, with each contributing a fraction of the development costs. They all save money while building a crucial tool they use together. The savings can be significant. Even if there's only one other partner, the costs might be cut in half. If there are 10, the costs could be cut by 90 percent.


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