Rethinking the OSS Business Model

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Fleury and Rodrigues Separated at Birth?

Come on, you have to admit, the resemblance is uncanny. I’m obviously kidding. I’m much better looking. His sizable bank account and ability to keep a beat probably balances the score though ;-)

Marc gave me a heads up on his recent post, in which he comments on Matt’s post. If you don’t already subscribe to Marc’s blog, I’d suggest you read his post today. Here are some key points that reinforce my OSS views of late.

Matt said:

“…It may mean that Benchmark knows something that the rest of the industry seems determined to ignore: services-based businesses may well be the future of the software industry. “

Marc responded:

“FALSE: the future of the software industry (as a whole) is services. I always enjoy it when in debate people mention the case of VMWare to evangelical OSS zealots. Here is a company that is creating vasts amount of technological innovation and money with a classic licensing model of software. When asked why they didn’t go OSS, the CEO responded “why would I do that?” …. What? my ideology is not perfect? the good old model is still kicking arse? by orders of magnitude in terms of technology and, it goes without saying, financial value creation?…”

“The proprietary model is alive and kicking. The existence of OSS models DO NOT negate the proprietary models. GET OVER IT, both models will co-exist and thrive sometimes at the expense of each other, sometimes independently of each other. It is not a zero-sum gain, there is value being created in both.”

“In fact, witness the RUSH of OSS companies to emulate the proprietary licensing models to monetize their bases. The VC’s may have invested in service based companies but they are all becoming product license companies…The proprietary licensing model is still top dog and the OSS guys are falling all over themselves to emulate it. BTW, on this topic, I find that Savio Rodrigues, the “community blogger” from IBM is a more enlightened read. Maybe because he is from IBM and they literally wrote the book over the past 50 years?”

I respect Marc’s willingness to speak/write with his unique sense of candor about OSS business. Whether you agree or disagree with Marc, be happy that his ($300M of) OSS credibility forces us to rethink the OSS business model, if only for a few seconds. Marc’s willingness to evolve his thinking around OSS and, gasp, learn a thing or two from the commercial vendors is refreshing. It’s a good thing for us commercial vendors that he’s retired… ;-)

All truths are challenged over time. It may well be time to challenge the belief that OSS growth will come at the expense of commercial software. As Marc so eloquently put it, there is value being created in both the OSS and proprietary markets. One plus one could actually equal two and a half. Take that Ramy (my accounting prof)!


Rethinking the OSS Business Model
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