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by krallin 4154 days ago
This is exactly what we're doing at Scalr (http://www.scalr.com/). Our experience has been the following:

+ An open-source version that folks can download, install, and trial is a great way to get your software in as many hands as possible. However, that's also more work for you: if folks download your software and it doesn't install / has bugs they can't troubleshoot, you're providing a very bad experience, and that will reflect badly on your commercial offering.

+ Research your market first. In our case, it's increasingly difficult / unpopular today to provide developer / IT tools that aren't open-source. In other words, being open-source is becoming a requirement.

+ Open-source offers reassurance to enterprise customers who might not have considered your product otherwise (you're small, and they don't want to tie their success to your survival, but if your product is open-source, this concern is more limited). There again though, it depends on who're selling to.

+ Our product hasn't been forked / used by a competitor. This wasn't really ever a concern. Note that we're following a model where we do open-source releases on a 3/6 month basis (we don't develop in the open); that's a reason, too.

+ We did lose several prospects to our own open-source software, but we also acquired several customers who transitioned from the OSS edition to the commercial edition. the only incentive at this time to choose the commercial edition instead of the open-source one is "support and more frequent updates" (which is good, but not always enough to get prospects to sign you a check). Before you decide to open-source your product, think very hard about how you'll differentiate your open-source and commercial editions (options include delaying updates, differentiating on features, support...).

+ Most of our revenue is now coming from the commercial single-tenant edition, whereas it used to be the SaaS edition. This happened after we pivoted to the enterprise, and made it much easier to deploy your own Scalr installation (it used to be a pretty daunting task).

+ We're not getting that many contributions (probably largely because of the model I mentioned above), and because so far we haven't had the energy to encourage them. In other words: just putting your product out on GitHub doesn't mean some folks from the internet will suddenly start working on it for free. That just doesn't happen. We did get a few very-well-thought-out bug reports, though!

Ultimately, I'd conclude with saying that open-sourcing your product is a solid way to get more attention. However, it's also more work: you're creating a competitor (your own product) that you must somehow beat in deals, all the while making sure that that competitor is solid enough that it doesn't turn people off your product.

Hope this helps!

You can reach me at thomas@scalr.com if you have questions you think I could answer!

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One last thing that isn't stricly-speaking sales related is people. We have an open-source culture here at Scalr, and there are employees (including myself) for whom that matters a lot.