Open Source Business Model

Looking for constructive feedback on OSBM - Hard or Soft I suspect.

My motion is that successful Open Source brands, such as Arduino, DIY, Linux etc... are the natural distributors of derived works, and should (therefore) encourage derived works specifically by hosting a marketplace for them - in which they charge a fee.

The argument in favor is that google searches and other reflections of mindshare will gravitate to the Copyright holders; derivative works are therefore discouraged a priori because they lack a level market. Providing an informed market for derived works would encourage derived works with a revenue component - which revenue would feed into the parent open source project.

In a sense, many Open Source projects are competing with their natural allies by trying to monopolize the distribution chain with a solitary embodiment of the shared IP; while this makes sense in some cases, I recently did some work for an Open Source company trying to do this, and came away with the impression that they may well be sacrificing the better opportunity (think ebay for derived works) in order to make a play at monopolizing the Open Source IP - fueling certain frictions in the bargain.

Does this OS community think that Open Source projects are better funded by:

A. The project initiators monopolizing the collective goodwill to sell derived works - to fund Ops & development.

or

B. The project initiators opening up the collective goodwill for any useful derived work (an atom-store) - whilst keeping a percent to fund Ops & Development.


(btw, i can list subtle examples of these themes in place already. I'd say Sparkfun is moving the fastest towards b. especially in their BatchPCB side, which was inspired by Seeed studios OS discount etc... DIY does have 3rd party modules (ir sensors) in its store, but has yet iirc to formalize a market policy.)


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  • 3D Robotics
    bGatti: I agree on all counts---you've expressed it well.
  • Hi Chris,
    "Should" in this case used in its oxford meaning: "best advised".

    So I'm floating the notion that the Copyright holders of OS Projects are better served to operate as a market maker rather than channel competitor because there is pragmatically greater net value and greater retained value (a tax). - and goodwill in the bargain: a threefer.

    I perceive that there is a J curve problem, which is that building a market takes energy away from developing one's own product, adds partner risk etc... But in the end, may produce this virtuous trifecta and thus contribute to the growth of OS product ecosystems.

    I join you in eschewing moralism; if only because moralizing is usually a failure to explain (cannibalism for example is unacceptable for evolutionary reasons - not because of an "absolute" morality of my own invention).
  • 3D Robotics
    bGatti: I agree, although I'm a bit allergic to the word "should" (I favor pragmatism over moralism). We're already in discussion with several community members about stocking and selling their goods, and the main criteria are simply these:

    1) They should be open source, if at all possible
    2) They should serve the community, which is to say fill a need here
    3) They should be priced as low as possible, while still providing enough of a profit incentive for the maker that they'll continue to make them and keep them available long term.

    In the case of electronics, we're even willing to do the manufacturing, although that requires us to build a test jig, handle the QA and customer support, which is not a responsibility we take lightly and so we're pretty careful about what we take on.
  • Also universities all over the world are using this open source to suck taxpayers money.And when they end funds they ask for more.But also it's not okay to abuse this open source thing.A university should receive more funds for their open source projects only if the projects have a wide adoption and a big user comunity.The initial grant should be based on the lack of an open source project in that area.If a open source project exist they should try to join that project first.
  • bGatti:So if your main preoccupation is to use open source to be famous and get free workers and then try to sell it an monopolize it to compete with private companies sounds pervert to me.I like open source web pages for download and forum to be separate from the comercial side.I don't care if they don't have money to fund the dev, but once they did this it means they will modify the source code also to fit their purpose.Many are using this "open" source to get rich, but they end up loosing the word"open".I agree with you that you need money to maintain an open source project,but the development part should not make money, only the user part.The development part should receive funds from users as donations .Users will fund the development as they wish or use their own funds and became developers.You start a open source if you already have money and wish to do something good to the comunity.Open source is more related to volunteer work for the good of comunity.
  • My opinion is Open Source is more about knoweldge sharing(http://en.wikipedia.org/wiki/Knowledge_transfer).The majority of developers have another paid job or the funds come from an consortium of companies(opengl).It's harder to make money out of open source as developer and that it's not the purpose of open source.Open source means only source code available and for free and open to new developers and ideas.
    -The desire to develop an open source project is about:
    1.You can use open source paradigm to promote on a large scale an project like Google Chrome and to control the Open Source IP.It's ok to have a management monopolization.Each open source projects has some core developers who decide which feature will be added and which not.And they will decide who will be the next core developer.
    2.You obtain free human resources for development,testing,support and documentation of your project.
    -The desire to use an open source project is :
    The user can implement custom classes for
    various problems, but it's not their core competence and they want a open source toolkit
    which is widely used, robustly tested, supports major features and well documented, so that its easy for users to debug.
    A company can be a developer and a user of the same open source software at the same time.As developer they can control the development of that software and as user they can make money using that software.
  • Of course Android is both Linux and OS, Android has a Market for both free and paid apps, revenue from which funds development of said apps with some share for Android; so while it's an Open Source derivative, Android has an economy. Open Office might be very successful as a Market for "Templates" and clip art for example, by making it easy to find and pay for same. It seems we've reached a point at which Open Source projects really do need to generate income in order to remain relevant, and I wonder if the AppStore model is the better model for converting MindShare (google hits) into both shared and retained revenue.
  • I think it largely depends on the work and the apparent market. Some derived works languish for a long time because the market isn't ready or the work isn't perceived as "useful". Some die a quiet death, some are "discovered" by a new use or the market shifts and the work suddenly takes off.

    Open source work is attacked by the worker ants out there in the world and it's hard to predict where the colony is going to take it.
  • I think an important note to keep in mind is that the nature of the open source product plays a role in deciding between A and B. For example, open source projects such as firefox or Open Office might not be very successful if they became a sort of marketplace for browsers or programs. In this case, its important for the company to channel all of its energy into the specific product in order to be competitive.

    On the other hand, some hardware applications, such as the arduino autopilots on this site might benefit from a "marketplace", specifically when it comes to searching for different versions of code or airplane designs.

    It also depends on the type of collaboration in the projects. In the ardupilot case, each person is capable of buying his/her own copy of ardupilot and flying their own plane, then they collaborate for the programming aspects. A marketplace is important here so that individuals can possess the necessary parts (autopilot) to be a part of the community.

    As far as software only projects, each person does not really need to "buy" anything, and so a centralized effort to produce a single project without derived works might work better.
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