What is a good business model for an open source framework?
- posted by: Okyasoft on 2015-01-04
- tagged:
software, business-model, revenue
- score: 2
When building a startup based on an popular open source framework used by many developers, what are some of the revenue options? I can think of charging for services, customization and some support. Are there other alternative models that companies are already using ?
The open source framework I have in mind is a Phantom.JS based automated front end testing solution.
Answer 1877
Take a look at Symfony:
- Web agency
- Consulting
- Training
- Certification
- Books
- Support
And I’m quite sure I’m forgetting stuff…
Potentially add, just off the top of my head:
- Commercial plugin/theme/module/whatever platform (allow devs to make money using it)
- Paid-for customization platform
- Paid-for support platform
- Paid-for bug hunt platform
- Paid-for feature sponsoring platform
The list can probably go on and on…
Answer 1881
It always comes down to your value add. You are asking customers to give up dollars in exchange for the value you provide for them.
That value could be as simple as doing for them something they aren’t capable of doing themselves, maybe you’re enabling them to get to market faster, or you are offsetting the cost of resources that they would need to hire permanently to solve a problem that might be project based.
From a revenue point of view, there are a couple key aspects/considerations.
- Is it time and materials based work or fixed rate. I.e. are you
being paid by the hour or are you being paid a set amount?
- Who owns any intellectual property you create? In theory with it being
open source, your work product will be merged back into open source project,
but in reality, you may be paid to USE The application and not customize it.
Especially in the case of libraries.
- Pay attention to purely intellectual products like books and white papers and
the like. While they might not pay you a lot of money, they help build your
reputation and credibility.
- Look for things you can build once and re-sell over and over. These might be
proprietary extensions that are licensed commercially or they might be recipes
or patterns. A good example of this is a training curriculum. You can license
your work product to a company like Global Knowledge which can pay you every time
they teach your class.
- Be aware of your place in the global marketplace. Find other experts in the platform
and partner with them. Take their overflow, give them your overflow. Handling things
like burst are the hardest problems for a starting up company. This is especially
relevant for niche opportunities that are outside of your wheelhouse. You can present
your organization as being a full service group if you have partners for fulfillment.
On the flip-side, there are some things to watch out for.
- If you don’t have a career statement of work that indicates your obligations and
the customers obligations, you can end up doing a lot more work than you expecte
and the price per engagement or price per hour may make the work invaluable.
- Don’t chase every customer. Some customers don’t have any idea how to engage in
your services, and if you’re bending yourself into a pretzel you aren’t focused on
the majority of customers out there.
- Watch out for stale IP products. If you do make white papers or books/etc, you’ve
got an implied obligation to sustain them. Be aware of the overhead associated with
producing these if the platform is changing a lot.
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