Business opportuities based on Free Software (was: Re: [ox-en] lovely ibm mantra)
- From: Stefan Merten <smerten oekonux.de>
- Date: Wed, 17 May 2006 09:51:21 +0200
3 months (113 days) ago Michael Bouwens wrote:
and here's a statement by Sun CEO:
Peer Production (4): Open Source as a Revenue Model
2. Open Source as a revenue model
Sun doesn't have a single customer, worldwide, that will run an unsupported product in their datacenter. Do such customers exist? Surely. They're called developers. Or startups. Or companies or economies that want to build their own internal support teams. That's the target for the Solaris Enterprise System. That's who uses free software without support contracts. And you're not going to win them over if you don't provide them with free and open source products. And if you don't provide them with the technology to use, they'll find someone else's free products. Opening up the Solaris Enterprise System, and giving it away for free, lowers the barrier to finding those opportunities. Free software creates volumes that lead the demand for deployments - which generate license and\n support revenues just as they did before the products were free. Free software grows revenue opportunities.
Opening up Solaris and giving it away for free has led to the single largest wave of adoption Solaris has ever seen - some 3.4 million licenses since February this year (most on HP, curiously). It\'s been combined with the single largest expansion in its revenue base. I believe the same will apply to the Java Enterprise System, its identity management and business integration suites specifically. Why?
Because no Fortune 2000 customer on earth is going to run the heart of their enterprise with products that don\'t have someone\'s home number on the other end. And no developer or developing nation, presented with an equivalent or better free and open source product, is going to opt for a proprietary alternative.
Those two points are the market\'s reality. And having reviewed them today at length at a customer conference, with some\n of the largest telecommunications customers on earth, I only heard the strongest agreement. They all, after all, are prolific distributors of free handsets.
Betting against FOSS is like betting against gravity. And free software doesn\'t mean no revenue, it means no barriers to revenue. Just ask your carrier.
This contains the point that it is possible to create businesses based
on Free Software. I'd like to put ramble a bit about this topic here.
A couple of people are puzzled by the observation that it seems to be
possible to create businesses based on Free Software. May be they
think if the basis is Free everything based on it may not be part of
I don't think so. The basis of Free Software is Free and this is not
challenged by these businesses who are selling support or security
add-ons to Free Softwre. Thus it is important to emphasize that these
business models are not about Free Software but based on Free
This is a big difference, however. To make this clearer I'd like to
compare the situation with the automobile industry. Their you also
have garages and lots of other support businesses around the product
automobile. However, the product automobile is not Free - and if it
will become Free this is probably to be considered a major
On the other hand there are other well-known businesses which are
based on some free basis. For instance all agricultural businesses
exploit the free abilities of plants and animals to grow and
reproduce. (Yes, I know this is formed over by capitalist aspects but
that's not my point here.) This has been done since the beginnings of
As far as the first comparison is concerned we can see that it seems
normal that one business operates on the basis of another business. In
the second comparison it seems equally normal that there are some free
resources which are exploited by some business. Nobody, however,
expects to be agricultural businesses to not exist just because they
are based on some Free basis.
There is of course a major difference between the two comparisons: The
first talks about a basis given by normal capitalist work while the
second talks about a natural basis. I think there could be examples
where the basis is created by non-capitalist work as well. Two
instances come to mind. The first instance is where the education of
humans is partly done in families. This is non-capitalist effort but
the whole capitalist system is built on it.
The second instance are public goods which are paid for by the state
or some similar institution. For instance streets in many countries
are created by non-capitalist players. Once again capitalism is built
on this type of public goods.
It seems to me that business models based on non-capitalist resources
are not so unusual. May be it could be interesting to explore more of
the differences and similarities here.
Mit Freien Grüßen
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