Thursday, May 21, 2009

The Right Way To Think About Open Source

There are many individuals who are confused about open source and monetization.

The first two rules on open source and monetization come from Marten Mickos in 2007 who was CEO from MySQL at the time:

“Success in open source requires you to serve:

1. Those who spend time to save money
2. Those who spend money to save time."

The important concept that Marten Mickos is driving home is that just like every other topic on planet earth, open source monetization is not black and white, but a gray scale continuum that we are still discovering some of the finer points.

1) There is no guarantee of monetary success just because you have lots of users.

2) If you ask someone about their monetization strategy and they come back to the concept of lots of users, then they have not a clue what they are talking about. There is no direct cause and affect between lots of users and guaranteed monetization. Yes, there is tremendous potential, but just like voltage - which is called potential, what you really want amperage. If you think this is not true, go google Xerox PARC's history and let me know how well the ROI went there.

3) There are analogies between open source monetization and every day products that you used today. Do you buy a warranty for a product that has a reputation for never breaking down? Probably not, unless your duty cycle is much more strenuous than the typical user. If you are running a business and you are using free software that never needed to be updated and never broke down would you worry about service? Probably not. Are there very many examples of software that you never update? Unless you are talking about a black box aka embedded application, the answer is not too many. There is an important analogy between home devices/appliances and enterprise software. That analogy is duty cycle.

My uncle, Merle Edstrom owns his own Welding business called Cannon Welding in Cannon Falls, Minnesota. One of the metrics that Merle cares about is the maximum duty cycle for a welder. The welding duty cycle is defined as the percentage of time in a 10 minute period that it can be operated continuously before overheating. As a professional businessman, Merle's duty cycle needs are very different than your typical home owner. Quick advertisement for my uncle. If you live anywhere near the mid part of Minnesota, Cannon Welding is the best and you should call Merle for all your welding needs!

In software, duty cycle is defined many different ways, but a common link to hardware duty cycle would be the reliability of the software expressed in the classic SLA or Service Level Agreement. If my business is running a mission critical open source application (as most are these days), then having a single throat to choke, 24x7x365 support, hot patches, professional services, value added services for massive scaling or vertical industry specifics are just some of the things that I would be willing to pay for.

At Sun we are clearly defining our Community Version and Enterprise Edition software.

More on my favorite (ok, one of my favorite topics :-) later....

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