Here is a link to a thoughtful article on the continued evolution of hybrid open source business models, particularly in the application space.

Thoughts welcome.

Thanks,
Michael

http://blogs.zdnet.com/BTL/?p=4802

Michael Harvey wrote:
Here is a link to a thoughtful article on the continued evolution of hybrid open source business models, particularly in the application space.

Thoughts welcome.

Thanks,
Michael

http://blogs.zdnet.com/BTL/?p=4802

Yep, read that one. And kind of disagree with it. In terms that hybrid model is not the only one model present that actually makes money.

http://robertogaloppini.net/category/gnu-economy/

Here is much better blog. Skip over "Open Source Marketplace: ideas in action, the SugarCRM case" ( ;) ), and head to "Open Source Business Models: a Taxonomy of Open Source Firms’ business models". There you have a nice little study of all major business models in OS world (hybrid one being maybe the most used one, especially in your space).

Now, I can't argue with that you can make money with closed product. Even much more money. But, you being kind of opensource, I suppose you don't want to go that way.

Now, looking at all those models, neither is perfect. Nice to have a hybrid model, but then you basically loose community and risk a chance that community will do your commercial part of hybrid by themselves. And it has to be rightly balanced.

The most interesting, and the most dangerous group is the last one, which is more in depth explained under "Open Source Market: OpenLogic’s CEO unveils new trends". Well, the trend is that (as I've said before) towards integrators/collectors/consultants/whatever. Those guys are a real threat. They can took your product, make money, and give nothing back to you.
 
No license will fix that. You can try, but most of above models could fail this way or the other. There has to be some other mechanism. And I believe that there could be. Just haven't got a time to truly put everything together. But, the basic is, if we look at pure opensource as a kind of communism (which we all know it wont work in the long run) and then, we also want to eat something so are trying to plug something free and available to all into strictly capitalistic model. Many problems there. So, we'll somehow have to find a middle ground. I've lived in a country that had (sort of) middle ground. Went to hell because of lack of democracy, but, reading through a LOT of economical studies lately, middle ground model is actually not proved to be wrong, and it actually in many cases works better than both of "extremes". We need market socialism ;) The one who finds a way for a fair transfer of money between all of participants in OS chain, will hit a jackpot. And again, I don't think the answer is in licens
es, but in better, coordinated cooperation between community, product specialist and integrators. Some kind of brand that will be very much recognized and accepted from customers. Kind of confederation between companies, mimicking what big conservative players do on marketing, sales, support etc front.

Could dive in more, but wont pollute this thread with more ideas that maybe seem alien to you who have 200 years of capitalism, to which my ideas could sound absolutely nonintuitive and alien.

Regards,
Filip Šelendić
Protenus d.o.o.

Me again. Another GREAT analysis. The best I've read so far. Couldn't do it better myself :)

http://www.riehle.org/computer-science/research/2007/computer-2007-article.html

Well, as I was saying, system integration is a key ;)

Short summary, product specialist (application makers) are screwed with every scenario. System integrators profit. Wee need a FairPlay network mimicking IBM.

And I don't want IBM to win. Hope this piece makes a bit clearer what I'm blabing about all the time.

Filip Šelendić
Protenus d.o.o.

OK, just to bring up this thread a little.

Sun spotted the same problems we discussed here. And is on the similar or same track how to fix them.

Sun Says, "Compensate OSS Developers"

http://slashdot.org/articles/07/05/08/0127230.shtml

"Talking at Netbeans Day, Rich Green, Sun executive vice president for software, expressed doubts about the current open source model in which developers create free intellectual property only to have others scoop it up and generate huge amounts of revenue. Green said, 'I think in the long term that this is a worrisome scenario [and] not sustainable. We are looking very closely at compensating people for the work that they do.'"

Well, here we go, market socialism is on its way ;)

What makes an open source company: Centric CRM's response.

Michael Harvey, executive vice president, Centric CRM

Over the last few days there has been some controversy about what open source is, which started with a post from Dana Blankenhorn at ZDNet http://blogs.zdnet.com/open-source/?p=1123, and a reply from Michael Tiemann, the president of the OSI: http://opensource.org/node/163

As the open source community breaks into two groups for a face-off about this (http://digg.com/linux_unix/The_Open_Source_Initiative_Finds_Its_Backbone, and http://slashdot.org/articles/07/06/21/1146259.shtml), I would like to offer our point of view.

At Centric CRM, we are dedicated to delivering value to our end customers. Our products are developed to satisfy their business needs and to provide them with the innovation, freedom and control they need for the software their business depends on.

We truly believe in our product, team and product strategy. We have never misled or mis-communicated the license that our software is based on. Our current license is not OSI-approved, nor have we ever claimed it is. But it is open source. Our software is developed and supported by an online community open to all; ships with full source code and grants customers the freedom to modify their software or any part of it for internal use; and is available for unlimited use, free of charge, by anyone who visits our website.

As Dana said in his opening post on this debate, CRM is beyond mission-critical: Customer relationship management is what companies do. It is essential that companies can protect their innovation so it can continue to be a source of competitive advantage. That is why our current license gives companies control over their own investments and allows them to protect their innovations.

We are active participants in the open source community, we build and deliver software that encapsulates open source and ensure that our business model is embraced by the end user community. As our success shows, with our software used by Fortune 500 companies, our approach to open source and business is successful. Centric CRM is a founding member of the Open Solutions Alliance and a member of the Red Hat Exchange (RHX). We remain committed to open source software.

That said, I am delighted to confirm that we've been exploring our licensing for some time.

Next week our next major product, Centric Team Elements, will be released under the Open Software License (OSL 3.0), an OSI-approved license.

In addition, we are putting out a Centric CRM SDK under the LGPL that will allow third parties to freely redistribute and build derivative works based on our public API.

We are also making our Microsoft Outlook plug-in available under the GPL so that third-parties can extend our plug-in capabilities to their products.

In the spirit of open source, I would welcome the chance to meet with interested parties, fellow vendors such as Sugar CRM and Michael Tiemann, President of the OSI, to discuss this issue.

Hi guys, hi Michael.

Congrats on brave move with Team Elements. We will use it, this way or another, on three upcoming projects ;)

No need for this apologetic tone in "What makes open source company". You basically are opensource company. No one says that all of your products ave to be open source to be one. Just, remove "open source" tag from CRM product :D At least, until you change its license to allow distribution :D

Although your actions and moves do define you as an VERY open source-ish company, some order needs to be done in a way we all define open source. Thats why I applaud OSI initiative to strengthen and restrict usage of term "open source" tied to the products. It can be very confusing and misleading. As someone noticed, you have shared source approach with your CRM, and thats fine.

Oh, yes, and congrats on VC injection! Very happy for you guys. I just hope that business plan allows for changing licenses :D

Oh, and I can see you are hiring. To bad I'm on the other side of globe :D