Re: Show Me Da Money (a Cautionary Tale)
This is a reply to Tarus Balog’s Show Me Da Money (a Cautionary Tale) post.
Tarus has labelled the business model of giving away an open source core but selling proprietary extensions as shareware open source.
It’s a great term, but I don’t think it’s wholly appropriate.
If the Hyperic & Zenoss communities have a problem with the licensing terms of the commercial extensions then they are in a great position to circumvent it.
The community can re-group and build their own fully open source extensions.
If a proprietary software company provides tools under terms not acceptable to you then you either don’t use the software or you have to put up with the terms. Put up or shut up.
Both Zenoss and Hyperic have opened up their core platform. Their users have a choice. If they wish they can circumvent any commercial offerings.
I’m not saying that, to use Tarus’s phrase, shareware open source is the same as a completely open source product. I am saying that both Hyperic & Zenoss have opened up as much as they can, and that by doing so, they have sown the seeds that will prevent them from straying too far from the best interests of their respective communities.
So, Zenoss & Hyperic: don’t upset your respective communities or you may find they go off and create a new community without you. That’s just not possible with a completely proprietary product.
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As usual, you raise some excellent points, so let’s take your post and contrast it with mine.
You mention that there is a built-in force within an open source community that will react to keep a particular project on the right track. In the case of OpenNMS I would have to agree. A large part of the ownership of the code is outside of the commercial part of the business. People not employed by The OpenNMS Group have full commit access to our subversion repository. It wouldn’t take but three or four members of the Order of the Green Polo to fork it, and since we all know that, most of the decisions concerning the project are handled very democratically.
I’m not sure that can be said for other projects where the main development is done by a rather closed group of people. Sure, there is a plugin architecture to allow for community contribution, but all of the main development is still done by the commercial side. Again, pointing it out for contrast, not necessarily criticism.
Since I don’t want to get into a “my project is bigger/better than your project” argument, let’s assume that all communities are created equal, and that each community will react to keep a project on track.
Now in my post I pointed out that there is another force in play called Venture Capital. Venture Capital exists to make money. It could care less about how it is done, as long as money is made. This isn’t evil, it’s just a fact of how investment works. When you consider VCs that have invested in a company *with a stated purpose to sell software licenses* I believe that force is in direct opposition to the force of the community. How can the community contribute code without restriction when said code could negatively impact licensing revenues?
Without a strong community with the ability to fork the code pretty much at a moment’s notice, money will win out every time. And my guess is that the smart money will work to insure that the implied threat of a strong community is minimized.
Just my thoughts. Now please note that I’m speaking of VCs that invest based on software revenues. There are a number of other open source models that don’t include having multiple versions of the code: some free, some not. In those models insuring a strong community is the heart of “Step Three: Profit!”. Thus the desires of the VC firm are more aligned with the desires of the community, and the VC investment can have a greater positive impact.
I’m a big fan of “what works, works” and if these other models help the end user get things done, then more the better. Competition is good. It will be interesting to revisit this in a couple of years to see which model worked best.
Quote | Posted January 23, 2008, 6:05 pm“I am saying that both Hyperic & Zenoss have opened up as much as they can, and that by doing so, they have sown the seeds that will prevent them from straying too far from the best interests of their respective communities.”
To me, this exactly makes Tarus’s point. Their open-source business model is not a business model — it’s a business model only at the whim of the community. That may be fine for getting VC, but I don’t see how it’s sustainable. The community that differentiates your product over commercial offerings will either move to something more open, or replace you, eventually.
That’s not to say it’s not possible to find a way to make it work, but I think it will require making changes. And VCs are notoriously bad at letting you make changes until it’s too late. You have one chance to not screw it up, or they cut their losses and invest in something else. They already expect 9 out of 10 of their investments to fail anyways.
Quote | Posted January 23, 2008, 6:17 pm@Tarus - Thanks for the comment. I think you have a point about the degree to which the internal engineers write the software. If the community does not undertake core development tasks then that will significantly affect the degree to which the project can fork in the event of either company failure or the community falling out with the company.
What I find interesting, and indeed would probably make a good post, is the degree to which different projects cross fertilise each other. For instance, there is nothing to stop you, morally or legally, from combining elements of other open source projects into OpenNMS. And yet I haven’t yet seen that done. Why? Are there purely practical engineering reasons for that?
Quote | Posted January 24, 2008, 9:59 am@Benjamin -
But I thought that that’s the whole point of an open source business is that a lot of the power to tie a customer into your technology doesn’t exist because the code is open. Whilst that isn’t wholly true with either Zenoss or Hyperic it is a lot more true than it would be for a wholly proprietary product.
Quote | Posted January 24, 2008, 10:04 am“But I thought that that’s the whole point of an open source business is that a lot of the power to tie a customer into your technology doesn’t exist because the code is open”
It fascinating to see how obsessed people is with the code and how its licensed, I mean in 9 times out of 10 , if a supplier folds or go in the wrong direction its much much cheaper to look for a new product than start working the code.
Quote | Posted January 24, 2008, 1:20 pm@Robert - True enough…but at least you have the choice with open source. Although, if the product is important enough to you the code will likely be placed into escrow anyway. I doubt too many companies have the skills to start hacking around with the source code though, never mind create a testing process.
Quote | Posted January 24, 2008, 1:48 pm