May 26th, 2006

There are a variety of open source business models

Posted by Dana Blankenhorn @ 11:18 am

Categories: Applications, General, Strategy

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For Memorial Day I thought it would be fun to reflect on the wide variety of successful open source business models that have appeared just since I began blogging on this subject about a year and a half ago:

• The IBM Model — All in one. You don’t even have to know it’s open source. You tell them what your system has to do, they make it happen, you pay the bill.
• The Covalent Model — This might also be called the project model. Make yourself an expert in a specific open source package, in this case Apache and related projects.
• The JBoss Model — Bring together superstars in a particular area and sell their pooled knowledge.
• The Red Hat Model — An open source variation on the Microsoft model. Build a basic stack, and then build on it.
• The Ingres Model — Spin-out a failed commercial product into an open source start-up, as Computer Associates did with Ingres.
• The NewCo Model — There are lots of these, companies born of new software which they chose to make open source in one way or another.
• The Me Model — This is how a lot of real-world open source support is getting done, individuals with expertise in a particular package gathering a collection of clients around them.

(The illustration is the business model of Social Ventures Australia.)

The point today is this is not a complete list by any means. There are many ways to create an open source business, or just an open source business practice. It’s not like it was in the old proprietary world, everything built around a package, get big or get out. You can be any size you wish.

Maybe you have a different business model, one not mentioned here. What is it? I’d love to hear it. Great bar-b-q conversation. Or great barbeque conversation, if you prefer. Just BYOB — bring your own bandwidth.