[thayne]

I don't thing that is necessarily the case. If your model is to sell the software as a SaaS, then yes it gives you a disadvantage, because someone else can just take it and sell the same thing without paying for development. Same thing if you sell a packaged product. If you sell support, you have a slight advantage, because you have more expertise in your product since you created it, and can make changes directly to it. But then it can be hard to find customers willing to pay, and you have an incentive to make the product difficult to use so more users require support.

I think the ideal situation would be where you are paid for the development itself, rather than selling the resuling software. Maybe with a pool that interested parties can invest in for initial development, new features or continued maintenance, like kickstarter or bug bounties. But that probably wouldn't have the high margins that the software industry has become accustomed to.

[bruce511]

Actually this is exactly how many, if not most, software companies are set up today.

The interested parties in this case are users. They pay a small subscription each month. That subscription pays for development, support, hosting, and so on.

Its the very definition of sustainable because it doesn't rely on "new sales" to fund existing customers. The overall cost is spread very thinly across the ones who are benefiting.