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How does open source make money? (if it does)

Byakko

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Do open source frameworks like Django, node.js, meteor js, etc... Make any money? And if they do, how do they do it?

Open source as a business model is something that I don't really understand, I would really appreciate if someone could explain it.
 
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Digamma

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The project itself usually doesn't make any money.

People working on it profit from being experts in it, and from having a tool that is better than they would have working isolated.

Some projects have commercial entities associated with them which profit from professional services, training and support.
For example, SensioLabs with Symfony.
 

Byakko

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Not trying to be a dick but I actually found your question interesting so I quickly googled it and found lots of great insights and answers.

The best answer I think is "By far the most common method of income is to provide a service alongside the OSS product." - source

No problem, I know that through google I can find answers to almost any question. But the advantage of doing this through this forum is that I might be able to find someone who can speak from their personal experience.

Recently I was faced with the opportunity of building framework, I know there is a need for a framework like that, what I don't know is how frameworks are monetized since almost all of them are open source.
 
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Andy Black

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I remember liking the book "Free" by Chris Anderson when I read it a few years ago.
 

Alxander

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Sometimes people open $ bounties for fixing a bug. Other than that I don't know, donations that will be split?
Oh yeah and I know someone who does consultancy for bigger projects who uses his open-source project.
 
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loop101

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You can write books about how to use the software, and/or provide support services for companies using the software. Redhat makes a lot of money on services. Indie developers like Josh Owens, who works with Meteor, charge $600 a hour. Sometimes a big company, like Google, will hire the developer for prestige/support. For example, the guys who wrote VIM and Postfix work at Google. There are a lot of ways to make money with open-source software.
 
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Waspy

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Remember that saying everyone keeps bringing up about selling shovels to miners (or something like that)

Well the open source guys are making the shovels and going mining.

They create a tool, give it away for free (and let people do what they want with it). Then they provide a service, using the tool they created. After all, if you create something, you are probably the world leading expert.
 

Byakko

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Remember that saying everyone keeps bringing up about selling shovels to miners (or something like that)

Well the open source guys are making the shovels and going mining.

I really liked this analogy, it fits really well.

But doesn't it sound like quite a long shot to make a company around the ideia of building an open source framework? It probably takes a lot of time to be able to make money out of it.
 
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Napoolion

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Meteor also sells very easy way to host along side with their framework.

For example WooCommerce is free on wordpress, but they sell a lot of extensions, what sometimes feel pricey.
 
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mentalic

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If you're referring to open source frameworks (like Django, Metero etc) then companies usually make money out of the following
- Events
- Seminars
- Training material (eg books, online courses)
- Donations
- Certifications
- Providing highly priced development services

If you're referring to open source software like Wordpress, Drupal etc then services is the way to go most of the times (eg you get Wordpress installed on a secure server for an X amount of money) or paid plugins. Most of the open source software businesses have the two options
1. Here is the source code, here are the docs and here is the community forum, now go figure out everything on your own
2. We will install the source code and help you whatever for you for an X amount of money plus you get support from our super experienced team (instead of relying on 'community forum' )
 

Pilot35

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You probably wouldn't make much money developing an open source software. But, I know someone who built a 7-figure business reselling open source software to consultants and businesses.
 
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Byakko

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You probably wouldn't make much money developing an open source software. But, I know someone who built a 7-figure business reselling open source software to consultants and businesses.

That sounds really interesting. When you say reselling did he built a product on top of the open source software and sold it?
 

Kid

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Take Discourse - opensource forum software. It makes now $120k/mo. The business model they have is giving great software for free but if you want to get it hosted by them then it costs from $100/mo to $400/mo.
 

DFD

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In this free e-book, the author John Mark Walker describes an interesting point of view about quality open source software as an viable business model. Very interesting to read. One quote from the e-book: "Some think that services and support are the only way to build a business on open source software, and this book is an active attempt to counter that."

Link: Learn the Secrets of Building a Business with Open Source

What do you think about this?
 
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Byakko

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In this free e-book, the author John Mark Walker describes an interesting point of view about quality open source software as an viable business model. Very interesting to read. One quote from the e-book: "Some think that services and support are the only way to build a business on open source software, and this book is an active attempt to counter that."

Link: Learn the Secrets of Building a Business with Open Source

What do you think about this?

That looks really interesting! I'll definitely check that out. Thanks!
 

fastbo

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Redhat Linux.

Free to download. Millions use it and pay zero.

Only thing the company sells is support/integrations.

And they sell $2.4 Billion a year worth of it!

Edit: Often with Enterprise software the initial purchase price is far less than the annual cost supporting the employee's software/hardware needs.


Do open source frameworks like Django, node.js, meteor js, etc... Make any money? And if they do, how do they do it?

Open source as a business model is something that I don't really understand, I would really appreciate if someone could explain it.
 
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Millenial_Kid5K1

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I really liked this analogy, it fits really well.

But doesn't it sound like quite a long shot to make a company around the ideia of building an open source framework? It probably takes a lot of time to be able to make money out of it.
Your comment makes me curious what percent of open-source developers actually have some sort of end-game, or if they're mostly hobbyists programming with their spare time.

Even if they're all trying to get rich, that wouldn't make it much different than what we've seen in the video game community. Tons of people hoping to make that 'breakout' game, shooting for that lottery. In fact, only about 260 steam games have sold over 1 million copies(guesstimating). Given that there are now almost 20,000 products on steam, your odds of getting a return in the millions of dollars on a product that will likely take you over a year to make are about 1.3%.
 

Alexlewter

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I think you've got a few options:

Give away the software, but charge for support. For B2B, this would seem to be a decent model, especially for big businesses, where the idea of running a server without support, is unthinkable. Basically, we're talking about RedHat, and companies like that.

Give away the software, but lock it down anyway. This is basically the Android model, Android is free and Open Source, but Google Play isn't, so while Google can simply give away Android, what provides a lot of the value, the Google apps and store, are not Open Source, so OEMs pay for them.

Use software to provide a paid-for-service. Basically this is like GitHub, git is free of course, but GitHub wrapped a nice service around it and charged money for it. I don't care if git is free or not, I pay GitHub to provide me with the service, not the software.

Ultimately though, those business models are not going to work everywhere, if the next Call of Duty was free, but they charged for support, that's not going to work and everyone knows it.

While I do use a lot of Open Source stuff, most of the software I make cannot be Open Source because it doesn't suit any of the business models which you can use for Open Source.

I think in a sense, we should stop treating Open Source like it's some kind of freedom issue, because it's not. There is nothing wrong with wanting to charge money for your work, and if to do that, we need to keep our source closed, then so be it.

All the Open Source business models suit larger companies, so if we insist on Open Source we're basically saying that there is no place for smaller software companies, the cottage industry of software development. Ads don't work for niche products, but charging $99.99 most certainly does.

If you give away the software, you're going to need to make money elsewhere, that might be through support, it might be through ads, it might be by providing locked down products on top of it, but at some point money is going to have to leave the pocket of someone, and end up in the pocket of someone else. I think in a very real sense, closed source products are actually kind of a very honest way to do that.

Closed source is simply, I make something, someone wants it, they pay me for it. Done. I don't really see how it's different to building a TV, no-one expects to download the schematics and firmware source code.

Open Source as a business is about finding workarounds either via support contracts, ads, or some other way to make money. Not all businesses can run on ads, not all businesses can burn up VC money. Some of us actually need to charge for software.
 

Chromozone

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Do open source frameworks like Django, node.js, meteor js, etc... Make any money? And if they do, how do they do it?

Open source as a business model is something that I don't really understand, I would really appreciate if someone could explain it.
For B2B software just have a look at how Salesforce did it. Marc Benioff wrote a book called Behind The Cloud, which is very insightful.

For a lot of open source software, it's not that the whole software is open source (e.g. Google's search algorithms), but it allows developers to create a lot more functionality to solve their own needs = more customers = more money.

I think anyone who is creating software should really consider open source from the outset. It's very important.
 
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Consolation

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Well open source basically means free coders.

So the exact same way closed software can. You have to compete a little more.

You can also build on the open source product with your closed software

(Hello Apple) OSX is basically freeBSD with some pretty stuff.

You valueadd. Your average Joe won't go download the free Ubuntu operating system, install it on a blank computer from eBay, and then flip it..they will buy a Ubuntu computer or laptops though so there is a thriving slow lane niche on eBay doing exactly that. Hell, I sold one for a tenner, my mate pulled out the neighbours trash can. 10- 1(for cd) 9 for 30 min work, before the whole thing got oversaturated that was my best business achievement.
 

Late Bloomer

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It's not always about making money. Sometimes it's about saving costs.

Let me give a hypothetical example. Suppose you and I both run businesses that make deliveries. I have a chain of pizzerias. I deliver pizzas to customers as fast as I can once they phone in their order. You have a specialty warehouse that distributes emergency medical supplies. You delivery medical products to clinics, nursing homes, hospitals, as fast as you can once they phone in their order.

We both have big enough companies for an in-house Information Technology department with some code monkeys. (I was a code monkey for in-house IT. No disrespect is meant to either code or monkeys.)

We both need a delivery scheduling system. It should integrate between inbound calls, a list of orders, production process (scheduling my pizza ovens and your warehouse runners), vehicles, drivers' phones, etc. We could each try to buy an off the shelf closed source system and heavily customize it. But if the vendor goes out of business, we're both screwed with a pile of bugs that will never get fixed. We could each write our own delivery management software. But we would duplicate a lot of the functionality, and one of us would have an inferior product because our code monkey didn't happen to know about the latest really good algorithm for scheduling resources.

We are not competitors. Nobody will ever say, forget my order for insulin, a pizza can get here five minutes faster so I'm buying that instead! Both of us depend on scheduling. But we both are not in the business of offering a scheduling service or product to our customers.

So, let's have our code monkeys work together on a really great production management and delivery tracking system. My version will tell me to put in the deep dish pie first even though it's not needed till later, because it needs longer to cook. Your version will tell you to put the insulin in the cooler first before you get the bandages that don't have to be refrigerated. The best scheduling algorithms either of us can find, will benefit both of us.

While we're at it, let's publish the software under an open source license for anyone to use, and for anyone to suggest an improvement in github.

Or maybe someone has already done this. So each of our code monkeys will grab that free software, customize it, send in a patch if they happen to have one. If it's a popular system, there are consultants available to help us with it. If we get pissed off at our consultants, we can fire them and not be stuck with their own weird code we can't fix.

A lot of open source software came about in this way. It wasn't all from humanitarian, communistic super-hackers donating their best efforts to save humanity from evil corporate greed. A lot of it comes from, "I scratched my itch, and if this happens to help you too, more power to ya."
 

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