Yared argues that companies aren’t making money from open source, because:
- Open source only works for commodities (e.g. operating systems)
- Open source is as expensive as proprietary software to develop
- Selling software is miserable
- Customers are switching to software as a service (SaaS)
He argues that open source is only successful when it’s free and supported by a broad community of developers, and argues that only a handful of commercial software companies based on open source have had “liquidity events” (did I mention this was in Business Week?).
I replied (perhaps into the ether given their moderation):
We are operating under a MySQL-like model, but with even more restrictions on our source code. We have no marketing or sales department (but then we’re only 2.5 people full time with an additional 0-2 contractors at any given time). A paycheck and a job I love with lots of flexibility is the only “liquidity event” I’m looking for.
It helps having the source out there, even if it’s not covered by an official open source license, because then developers can kick the tires, go beyond the doc, and help fix bugs. And users can try it and inspect it before they buy.
We don’t need help patching the bugs, but we do need help finding them. As much as we unit test, bugs wind up in production code, and users find them. When they report source code locations and suggest patches, it really does save us time.
We’ve dealt with several Fortune 500 companies, but only the U.S. government has put us through the “approved vendor” mill, and only the U.S. defense department was ever interested in security audits (and then mostly to make sure you weren’t sending packets out over the net).
A big issue for sales is that companies want indemnification against lawsuits, mainly for patent infringement.
Are SaaS businesses really taking off? All the big companies we talk to are too paranoid to let their data offsite.