Cannell.org/blog

It's interesting to watch the disagreements over open source business models that apparently started last week when MySQL let it slip they would be offering proprietary extensions to their open source products. I think Matt Asay got it right when he said:

The key, again, is to separate the core from the complement. MySQL, the database, is the core. That should be open source. It's good for MySQL that it be such. It leads to greater distribution.

As for monetization, in open source you do it exactly the opposite as in proprietary software, which jealously guards the core and throws trifles to the crowd as free complements. In open source, you charge for the complements while giving away "the crown jewels."

But there are many bloggers who disagree with Matt, like Gianugo Rabellino, who said:

"a support model can only bring you this far as best customers turn into worst nightmares once they realize they have become competent enough to support their Open Source stuff."

Some of this reasoning probably goes back to comments Jon Williams of Kaplan Test recent made at the Open Source Business Conference 2008. Matt Assay captured it this way:

"the more happy he is with his commercial open-source software, the less likely he will be to pay for it. Why? Because his developers will acquire the expertise over time to support themselves and because the product will mature to the point that support will be less necessary."

Hence, there is no money in supporting open source software so the dual-licensed hybrid software model is the only viable business model.

Some points to make here:

1. ANY software that matures to a point where support is not necessary is probably not being used (or is used very little and for nothing important). This applies to both commercial and open source software. I have seen support contracts dropped for commercial software too.
2. How many companies can afford to have developers support all of their products? How many developers do you employ to support word processors? This may not be the best example but you can't assign developers to all products used within a company.

I find it hard to believe that any company (with very few exceptions) will gain enough competency in all of their open source products to not need some form of support. Most companies simply will not invest in these types of resources. Either way, they are paying for support. Either through headcount or through a support contract (and headcount gets awfully expensive).

Also, Gianguo's analogy between open source and cars doesn't work for me. He says

"The problem with commercial Open Source is that it doesn't sell cars. They sell insurance."

It seems to me there is lots of money to be made in car insurance (we surely see enough TV ads about it). Plus, there are service revenues associated with cars (at least the cars I drive) that look fairly substantial to me.