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FrOSCon - How To Make Money From Open Source Today

Gosh, one of the fastes talks i joined in the past. Nevertheless, the talk was full of informations. Mr. Widenius is an incredible likeable person since you feel the force he is up to presenting open source as a workable business concept.

Based on the speed of the slide switches and the enormous number of slides, there are a lot of gabs in my blog entry (aka talk record).

By Michael "Monty" Widenius, one of the creator of mysql and now part of the mariaDB team.

What Is The Talk About

  • how to make a good open source project
  • how to create money of that
  • understand how open source works
  • create an open source project
  • participate, drive or fork an open source project
  • try to create a company around an open source code

Good And Bad About Open Source

Good

  • more developers
  • more spread
  • much better code
  • works well for a lot of projects

Bad

  • not enough money to pay developers (most at the beginning)
  • hard to get money and investors for projects (you have to make consulting and so on to get investors)
  • investors, in general, don't belive that a open source company can make enough money

Things To Clear Up

Top Reasons For Creating An Open Source Project

  • solve one of ones personal problems (mysql/php)
  • relicense and existing closed source porject to open source to get the benefits of open source (netscape)
  • get more developers on an internal company tool/project
  • wanting to earn money and at the same time do something good
  • wanting to give something back to the comunity
  • ...

Developing Software Open Source Is In Human Nature

  • you solve your own problems and get free help and development efforts from others while doing it
  • you participate to increase your reputation
  • you use open source because its less expensive
  • ...

Before Starting A New Open Source Project

  • check if there is already an existing actively developed project (it is always better to participate then to do new project or fork it)
  • do some reseach why old and dead projects are failed
  • find a company or a group of users that wants to work with you to define the scope of the project

Its Not Just Software

  • most importent part is to create a communiy
  • you need to interact with that community
    • web pages
    • forum or knowledgebase, email lists, bug system
    • documentation and localization
    • packages, build systems
    • respository

You Need A Good Team And Active Community

  • mark a designated active leader (linux) or leaders (MariaDB/PostgreSQL) that have the respect from the community
  • ...

Transparency Is Critical For Long Time Success

  • a open development model
  • clear guidelines
  • clear license and business model
  • extensive documentation
  • be clear about your roadmap and release schdule
  • good open review process of patches that enforces quality
  • be transparent with your plans and let users influence them
  • be open about your bugs

Communicate With Your Community

  • attend conferences and talk about your product
  • listen to your users and either do it or help them to help themselves
  • make it easy for people to communicate with you and find informations about your product
  • ensure that your faq is up to date
  • ...

Be Good Open Source Citizens

  • building a supportive community later in the game is extreamly hard - you have to do it at day 1
  • ...

You Need To Get The Product Out There And Used

  • release early, release often
  • aim that each release should be bug free enought to be usable in production
  • work with the distributions and cloud providers to get your product in there
  • use a good open toolset ...

Doing Business With Open Source

Open source is a philosophy and a development model.

Open source does not gurantee that you will make enough money.

Different Kind Of Open Source Products

  • products developed by the community
  • products that are tools for the company and released as open source to get more community development
  • small team or company that is developing and driving ...

Questions To Consider When Creating A Company

  • do you plan for a virtual company (no offices)
  • are you creating a company of equals (hacker companies where company is owned by employes)
  • do you want to concentrate on services or development
  • do you plan th have a big community or work with a few big companies
  • do you plan to take in investors (if yes, you need an exit plan)

What Business Model To Choose

  • service company
    • man powered services (support, training, consulting)
    • valuation 2 times revenue
  • software company
    • licensing, software as a service (SAAS), subscription
    • valuation 10 times revenue plus x number of users

What Is The Final Goal With The Company

  • sold on the market (quick and high profit for owners, unpredictable future for employees)
  • go public on the stock market
  • owned by founders, employees
  • create an open source foundation

Why Go Open Source

  • spread the product more quickly
  • get some part of the development done elsewhere
  • get things more tested and more bug reports
  • possible to get development done in "not business critical" directions
  • easier to find good developers, partners and customers

In general, more market recognition, feedbacks ...

Reasons For Users To Trust A Open Source Vendor

  • more trustworthy as they depend on trust to survive
  • no vendor lock in (can fork it or publish patches each time)
  • little risk for trap doors

Benefits For Developers Using Open Source Vendor

  • easy to get access ...

Benefits For Big Business / Countries Using Open Source

  • no license costs
  • not depending on vendors (from different countries)
  • ...

When Go Open Source

  • ...

How To Choose An OS License

  • what is your business idea ...

Business Models To Use With Open Source

  • open core model (SugarCRM)
  • dual licensing model
  • service models
  • subscriptions

Open Core

  • its a closed source business model (like oracle and mysql)
  • ...
  • for cummunity developers, the worst possible offer

Dual Licensing

  • used first by ghostscript and mysql
  • can only be used if you have full rights to all the code
  • give same code under two licenses
  • companies that can not use the gpl have to buy the closed source version from you
  • only works well for infrastructure, easily embeddable produts like libraries or databases

Business Source (Delayed Open Source)

  • not an open source license
  • source code is available from start but using it commercially you have to pay
  • after x years, the code automaticly converts to some open source/free license
  • better than open core
  • investor friendly (early adaptors have to pay)
  • forces good behaviour
  • you to do frequently releases
  • you to innovate and fix bugs to ensure users wants it
  • ensures that company is bought by "bad entity" that just wants to close down the project
  • project can be take over if something happens to the company

Recommendatins For Business Source

  • 3 to 5 years before it becomes open source
  • target that 1/100 or 1/1000 users have to pay
  • free version and commercial should be identical

The Importance Of Selling Licensing

  • mysql was only possibly with the licenses
  • very hard to get companies to pay
  • ...

Business Differnces Between MySQL and MariaDB

  • ...
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