I get asked quite frequently about open source software and how can you make any money, especially if you give software away. My two word response is quite simple: “business model.” Open Source software does have licensing terms & conditions and revenue is part of the business model. Having personally spent approximately 3 years front and center in the open source software world– I’ve explained it many different ways in an attempt to get others to grasp the concept and not get stuck on myths.
My latest analogy to open source software is to use a popular franchise of Major League Baseball, whom some of us know as a customer. Take the Boston Red Sox. Clearly this is one of the most successful baseball teams in the world, especially since John W. Henry took ownership of the team in 2002.
Now the analogy can apply to any sports team but I specifically am using the Red Sox because of it’s presence, reach and magnitude throughout the world which is important for open source software. If you live in the Boston area, as I do, you know first hand that securing tickets to any home game is an expensive monetary acquisition. Even if you gain entry into a home game there are tiers within the ball park that dictate how much revenue you contribute to the Red Sox for the service provided:
There is a very wide margin of service one can obtain if they are willing to pay money. A bleacher seat for a single game is $26 U.S. dollars, while the cheapest seat for the Oakland A’s is $9 U.S dollars… see what I meant about reach and presence of a community. Fenway Park is an enormous revenue generating machine using game tickets, food concession, merchandising, television broadcasting rights and loyalty.
Now let’s talk about the vast majority that do not choose to spend money or do not have any money quite yet for the Red Sox. There is an enormous following of the Boston Red Sox throughout the world. To be a Red Sox fan costs you nothing, only your involvement with the Red Sox community. You can watch, follow, cheer and get a similar Red Sox experience for free from a television, radio, free internet game tracker or newspaper box score. The Red Sox welcome all types of community fans irrespective of where in the cycle of the business model they currently reside. A subscription is available to every fan depending on their affordable level of service. Some loyal Red Sox fans commit up front to many years of continued service. The key point is that fans (community) can come and go and spend or not depending upon their own circumstance. Free TV fans are adopters where revenue is not a primary focus while premium paying fans are contributing to the Red Sox revenue stream. In the end both types of fans are customers of the Red Sox and the Red Sox nurture the needs of a varying wide fan base for profit.
The Red Sox certainly want to reach as wide of a fan base as possible including all demographics. For example that young 11 year old female in bleacher seats with her Dad and pink Red Sox hat may be a future CEO of a Fortune 500 company. Her company may want a corporate suite at Fenway Park some day. It’s very clear to the Red Sox that young Red Sox fans of today usually become future adult Red Sox fans that are likely to contribute revenue to the Red Sox. When the Red Sox play away games you can see many loyal Red Sox fans at baseball stadiums in Tampa Bay, Baltimore, New York, Oakland, Toronto and Cleveland.
The Red Sox model works for all fans with time and/or money but clearly the Red Sox have been successful by growing their fan base world wide and providing a superior product for their community. So when you think open source software examples think Red Sox and opensolaris, openoffice, eclipse, ubuntu, mysql, java, opensuse, glassfish, redhat, apache, etc. and the largest contributor of open sourced software in the world. The choice is yours for choosing the team and community that is right for you. Developers from many FOSS communities are getting together at CommunityOne West in June. Click here to register.