Open Source: where does the money go?

It seems we are not alone in being curious about how the growing number of open source businesses are making revenue.

Kirk Wylie, of OpenGamma, has written this blog post to answer a question that he probably gets asked several times a day. In a nutshell, it seems that commercial clients of OpenGamma need a range of services to tailor OS software to their needs, services that sometimes, an open community cannot provide (Kirk will be speaking at CEO Tales: Open Source Business Models on the 6th February if you want to ask him more detailed questions).

But what if your customers want to reuse the code in their products? Kaltura, an open source video platform, gives a good explanation here of how to run a dual license model that allows customers to embed their open source software in proprietary systems. The emphasis from both models is on transparency – that the majority of development is done in the full view of the developer community.

Which gives that community a significant amount of clout: for example the interesting story from earlier this year of the spat over  Vert.x between VMWare and RedHat. Two big hitters in the open source world, squaring up over who has rights to a valuable bit of code – a recipe for large lawyers’ bills and years in court, right? Well, no. The development group supporting the project weighed in and the companies have promised to work things out through the community.

What’s different in open source is that the community tends to win over business interests, and the community’s over-riding interests will always ensure that value flows ultimately to the user. Which makes open source solutions typically much better value than proprietary ones, but arguably nowhere near as profitable.

A tricky path to tread – and we’ll hear more from CEOs of open source business on this and other challenges in our first CEO Tales of 2013, looking at open source business models. You can learn more and register here.