[ezekg]

This is a good reminder to folks that Open Source isn't a business model [0] -- it's a distribution model. You have to figure out your business model if you want to survive. Good to see Briefer figuring this out early on. The decision to offer Cloud + Open Core is a great, well-traveled path.

[0]: https://cra.mr/open-source-is-not-a-business-model/

[ekidd]

Open source is business model, but it's not a VC-friendly, easily-scaled business model. Relatively few companies ever made it work, and it's only gotten harder with the rise of one-stop cloud vendors that host other people's software.

But open source has absolutely worked as a business model. This is actually easier to see if you look at companies like IBM. Back around 2000, IBM used to charge $40,000/year per CPU for software that was often mediocre. But as one very smart IBM marketing guy told me, the software was basically an excuse to sell IBM Global Services for consulting and customization. At heart, they were making a service play. And IBM of the early 00s loved Linux, for two rather weird reasons:

1. It allowed them to freely collaborate with other companies like RedHat based on nothing more than a handshake.

2. Even more surprisingly, it allowed collaboration within IBM, between different groups that usually had complex politics.

I as understand it, IBM was not, generally speaking, selling Linux. Linux was just one more way to sell Global Services.

And of course, RedHat themselves were a service company in those days, at least from what I heard from some of their clients.

But service companies are hard, they're sales intensive, and they're not valued nearly as highly as pure software plays with the same revenue. And if you want to be big, you'll eventually need to serve big enterprises. And of course, AWS will happily eat any low-customization revenue you might otherwise be able to snag.

So open source + consulting might be a business model, but it relies heavily on running a successful consulting or services business.

A much more common way to use open source in business is the "stone soup" model. I've helped my employers open source tons of stuff over the years. It was almost all useful tools, not their main products, so it didn't help competitors directly. The upside is that other companies may occasionally contribute something. This is usually pretty modest unless you put in extra effort promoting your software, but it happens. Sometimes, the biggest advantage is that open sourcing a tool is a great way to draw a boundary that says, "This is a generic tool that focuses on one thing. It does not contain business logic." For certain kinds of tools, this can be a fantastic discipline.

But definitely don't think that you can release your core product as open source, and then just run a standard product-based business.

[dragonwriter]

> Open source is business model,

No, it isn't. It’s more or less compatible with different business models, but it itself is not a business model.

[mindcrime]

> Open source is business model,

It isn't. It's a development model, which (mostly likely) has profound implications FOR your business model, but it's not a business model in and of itself.

It boggles the imagination that people are still confused about this in 2024. sigh

[satvikpendem]

You are just describing various business models that are compatible with open source software, but simply open sourcing your software is not in and of itself a business model, which is exactly what the article in the comment you are replying to says.

[arminiusreturns]

I hope to prove you wrong.

[skeeter2020]

Not sure exactly what they figured out; they landed were multitudes have before, even this specific market and product has similar dual-offerings. It's a very crowded space.