Brian "Krow" Aker's Idle Thoughts - Thoughts from a Usenix Panel... Open Source Business Models

Thursday afternoon I stopped by the Usenix Annual Technical Conference on my way out of Boston to be on a panel led by Stephen Walli on Open Source Business models. I got to share the panel with Miguel de Icaza from Novell, and Mike Olsen from SleepyCat/Oracle. It was a great panel, I even got to make use of my "open source can be built on top of a tip jar economy" quote :)

There was an excellent piece of insight I gained from Mike Olson. When asked about receiving value from the community, I had said that what I find most of value was "well qualified bug reports", but what Mike thought was of more value was users who provided validation of the product's value. I've been involved in many open source projects, some well known, and some completely unknown outside of a small group. I've never concerned myself about validation since I have been lucky to have have it come naturally where I have wanted it. What Mike was pointing out was how important this validation is to projects just starting out. I think his comments were incredibly insightful for those using open source as a business model. Only through validation do most projects receive backing.

Miguel mentioned early on that he would not recommend open source as a model for a business just starting out and who wanting to be bought out. This surprised me a bit since Miguel has been a big backer of open source. After the panel I spoke to him for a few moments on this, and what I came to the conclusion of after speaking with him is that his statement is true based on the context of his work. His work has been until very recently on the client side, and on the client side I too am not convinced that there is a business model around every sort of application that exists. Unless you can create a .MAC or game environment which will have a subscription based model, a standalone application has limited ability in a purely open source model to make money.

The three of us all warned the audience on the notion of trying to monetize the entire user base of a product, to paraphrase Microsoft "if you are going to use software, please steal ours". No one realistically expects that everyone who uses your software will be a paying customer. What is great about open source is the ability to take the users who do not pay in cash, and instead receive value in different means.

The panel was great, one of the best I have been on. Both Mike and Miguel really were a job to discuss the topic of open source business models with. It is my understanding that Usenix recorded the panel, so hopefully it will go up on the web at some point.