Open Source and being broke don’t have to go hand in hand. There’s no reason you can’t make money from software you release as Open Source. Think about it – you’re giving away the source code for free – not the knowledge and expertise that went into creating it. That’s hard to put a price on. The advantage of releasing as Open Source is that your product gets into many more hands that it might have done had you gone down a normal commercial route. This means more people playing, testing and giving you feedback, which is always a good thing.

The commercial Open Source model I’m going to look at is much more suitable for medium-large projects, rather than tiny programs. The reason for this is simple: commercial Open Source relies on your customers not being able to do what you can do, even with the free software you’ve given them.That’s much more likely to happen in larger applications.

Here we can see where your revenue should be coming from. You need to make it easy for users to convert from the free model to the paid for model (operational comfort).

For this, you need to first of all have a great product, and second of all have great support. If there’s no noticeable advantage over the free edition, why would people bother to change? Lots of developers go down a subscription model, or offer to host the ‘enterprise’ version for a small fee.

Here’s the big 3 you need to get right:

• Marketing: More believable and cheaper marketing through engaged community.
• Engineering: Superior product that is developed faster thanks to fast and immediate community feedback.
• Support: Lower support costs thanks to self-supporting user community.

Remember you have leverage in the natural assumption that the product developer is the best person to go to for support. This is nearly always the case.

In short, you are allowed to make money from the open source  model. Many companies have done – RedHat, SugarCRM and SmoothWall to name a few. Open source has the added marketable advantage of ‘try before you buy’. Can you imaging being able to ‘try’ a version of Windows, then not pay a penny if you didn’t like it? Lots of people use Microsoft SQL server, even though it sucks compared to Postgres. Microsoft rely on their huge marketing and sales arm to ram software down user’s throats – and their market share in the Office environment  has been falling steadily over the last five years. Likewise with Internet Explorer, which has taken a huge hit since the release of Chrome. It’s for this reason that only well made open source software gets big. If it sucked, no one would be using it anyway. That’s good for the company and good for the consumer. Good luck with your open source project.

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