Open Source Business Plan

Open Source Business Plan-79
In the longer term, of course, the company itself also has an economic interest in ensuring continuing innovation so it can remain competitive as the market changes.

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Most of the material below is from Chapter: Open Source as a Business Approach from the Ph D thesis from Janet Hope at janet dot hope at au We've selected the citations that are generally significant for all sectors and for software, not those related to Open Source Biotechnology, which is the main topic of the research.

See also our article on Open Source Software which explains the competitive benefits of using open source software.

The business creates the tool, fences it around with intellectual property protection, and derives revenue by selling the tool or, more commonly, charging fees for access under a licensing agreement.

From a business perspective, this IP-rent extracting model has a number of advantages.

The relevant property transactions can be tailored in a range of ways, e.g. Fees can be charged independent of any services provided, which makes it possible for a new business to start small but grow quickly.

Most importantly, the price charged for the product need not bear any proportional relationship with the initial costs -- so profit margins can potentially get very large.

Open source licences support this strategy in two ways.

The first is purely practical: users cannot become codevelopers of a tool unless they have access to that tool in a form that they can understand and modify.

Take Day Software, quietly producing tons of good open source infrastructure components, they sell a great proprietary app. I think it’s the easiest way to make money out of open source. Support & Packaged Services: Sell support as subscription and high-value packaged services (monitoring, inventory, etc.) for open source software you’re producing. Proprietary distribution: assemble open source software into a proprietary stack.

JBoss was the flagship in this business with quite a success making money with it. It’s all open source software, but the recipe to assemble the different components together and deliver a coherent and supported stack is kept secret.

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