I am one of those people who when I was introduced to the concept of open Source Software I was impressed by the generosity of the developer and honestly thought they make their money through donations and well wishers. Over the years my appreciation of the Open Source industry has immensely improved. This article aims to help your organization open up other revenue streams and or save it large amounts of money. Below is a brief guide on how to make or save money by making use of open source software.
Zimbabwe is currently faced with an acute shortage of foreign currency which is used to purchase most of the software programmes in use by the corporate. Offering them open source programs that are free of exorbitant yearly licenses would be welcome. That, some may think, would then kill the commercial licensed software and hence the industry. One has to appreciate the fact that Open Source software is commercial software; the GNU/GPL licenses do not preclude commercial exploitation of the software.
Consider the following:
Services or not licenses
Distribute the open source software for free and then provide the services of installation, implementation and maintenance at a charge. One can even go a step further to develop world class systems using open source tools which will be less expensive to maintain.
How to get started
Visit well known open source code repositories such as Freshmeat.net or Sourceforge.net. Search to find projects that address your requirements. Check to see whether the projects are in a programming language you are well versed with and the project is still active. Download the project and make modifications to the project, for example, style sheet changes, logos, form changes, etc. Contact the existing project community and let them know you want to build a commercial application and you will comply with the license.
Package it
Package your solution in a form downloadable via the internet for no cost. This produces a friction free manner for distributing your application, allowing you to establish your product’s credentials and market presence. But also consider that being in Zimbabwe, downloading from the internet may be an uphill task for your users; provide a packaged version of Cd’s and printed manuals. Put a price to cover the material used. Another way of packaging your system is building an appliance solution constituted of a preinstalled operating system, database application server and your application on top.
Marketing your product
What does it take for your product to get noticed? Obviously, by using open source attributes when marketing your product: Market the fact that you give your customers the complete source code to the system; market the fact that the code does not have a use-by date or sunset clause. If you and your business collectively fall under a bus, your customers can continue to use and have third parties provide ongoing support. Leverage the fact that local business and government consumers are risk averse, and that you, unlike a group of coders in Iceland or Brazil who produced the original code base, can indemnify your customers using your professional and product liability insurance; market the fact that you are local or regional and can provide same time zone business support.
By commercial support, I mean commercial support. Charge the customers $200 per hour for it, but make sure you deliver the goods. You should also play the perpetual code escrow card. Many potential customers of vertical business applications need to be guaranteed that they will not be left stranded when deploying a new line of business system.
Paying the bills
But how do you make money? First up, support revenue. As soon as you can, establish mailing lists and discussion forums so that users of your software can help other users. This takes the load off your team. You will need to kick start this community by providing technical support freely at first. Once momentum has been reached, provide no more free support. Instead, offer various paid support options, with credit card payments: per incident, quarterly and yearly. For business-grade vertical applications, this could be hundreds of dollars per incident or thousands of dollars per quarter. Next up, provide installation, customisation and enhancement services. This is where the real money is. Show the market you are a serious commercial open source player. Whilst your code is indeed open source, and your users could extend it themselves, most businesses do not have the time or the inclination to undertake this kind of activity; it’s not their core business. Firms will instead turn to you.
Additionally, no one should know the code as well as you, and your time to build for extensions and any integration work will far exceed others’ value delivery. All you need to do is capture just a small percentage of all those users who pulled down a free download and you can generate some real revenue with customisation work. And because any such resultant work can be open source too, you can slowly build upon the functionality of your product, thus attracting more users.
Finally, you can make money by re-licensing. Just because you licence your software under an open source licence, does not mean you can not also licence it under non-open source terms as well. For various tactical reasons, the best open source licence to use for this purpose is the General Public Licence (GPL). This approach works especially well for libraries and for products which you could classify as ‘engines’, such as computing engines (scientific and engineering), database or transactional engines. By using the GPL, anyone who links to your engine or library and plans to redistribute that combination as a total product must also licence their own IP under the GPL.
