Is There Money in Open Source?

Mar 13 2011 by Rosston Meyer | 12 Comments

Is There Money in Open Source?

Web development and free and open source software (FOSS) have gone hand in hand since the beginning of the web. Popular scripting languages and web development frameworks such as PHP, Rails and Python are all open source, and many of the most popular platforms built on top of them, like WordPress and Drupal, are too.

Open source has leveled the playing field by reducing the costs of creating software and web services, as well as nurturing innovation and sharing in the web development community.

However, even though the languages and platforms are free — and infrastructure to host them on are getting cheaper and cheaper by the minute thanks to cloud services and affordable hosting solutions like virtual private servers — a booming economy has evolved around the development of products and services for use with open source software.

This economy includes a range of software and services from premium themes for popular open source platforms such as Drupal, Joomla and WordPress to the use of open source web development frameworks like jQuery and Ruby on Rails for creating subscription-based web applications.

Free and commercial open source are symbiotic and complement each other by allowing software products and services to emerge in the marketplace that would not have been possible without open source. Commercial extensions increase the versatility and competitive viability of open source products while also creating a self-sustaining economy.

The Commercial Side of Open Source

Drupal, Joomla and WordPress are three of the top open source CMS platforms and are all built on PHP (also open source). Plenty more lesser-known content management systems exist, and are also viable platforms to build sites on.

WordPress is possibly the most popular one of the bunch. Like its counterparts, the core WordPress package is free and open source, but they also offer premium services to end-users. Drupal core is free and open source, but has premium products and services geared toward enterprises offered through the Acquia network. Selling premium products and services for open source projects is a common strategy for monetizing open source development, especially for such widely used systems.

Some open source products take a different approach by licensing the basic product as free and open source, and then selling premium versions and services of it under a commercial license. One example of this is MySQL, a popular relational database management system that offers a community edition (free) and several enterprise editions under a commercial license. Magento does the same for its open source e-commerce platform, and Alfresco for their enterprise CMS.

A smaller scale example of the free and commercial open source relationship is the creation of commercial plugins and modules for popular open source platforms such as WordPress, Joomla and Drupal. Plugins and modules offer functionality outside of the scope of the core package, empowering end-users by making the systems more versatile while creating an incentive for professional web developers to create better solutions for the community of users.

Commercializing Open Source Development

Making money on open source web development has pros and cons. A very active debate on the programmers’ question and answer site, StackExchange, shows just how varied opinions are on the subject from a developer’s perspective.

By releasing extensions through an existing platform, developers are able to utilize the community’s forums and marketplaces to make their work available to thousands, if not millions, of users.

However, unless you have a marketing team and a solid distribution channel in place, it is an uphill struggle to gain visibility for your product.

Software marketplaces — a portal for selling digital goods — can give you the ability to put your work out there.

Below is a short list of software marketplaces. The list isn’t meant to be comprehensive (because there are a ton of open source marketplaces out there), but rather, it’s just to give you an idea of the viability of commercializing development for open source projects.

Chrome Web Store

Chrome Web Store

Google’s Chrome Web Store offers themes, extensions, and apps for users of the largely open source browser, Google Chrome.

Android Market

Android Market

The Android Market offers thousands of paid and free apps, all built on the open source Android mobile app platform.

WP Plugins

WP Plugins is a niche software marketplace for WordPress plugins. They offer premium WordPress plugins for extending WordPress with features such as e-commerce capabilities.

ThemeForest

ThemeForest

The popular marketplace by Envato with over 600,000 members, ThemeForest is a place where you can find premium themes for WordPress, Drupal, Joomla, and many others.

Binpress

Binpress

This is a marketplace for source code for languages like PHP and JavaScript.

Joomla Extensions

Joomla Extensions

Joomla has its own extensions directory, some of which have commercial/premium versions.

AgileWebDevelopment

AgileWebDevelopment

This is a directory for Ruby on Rails plugins; the site currently lists over 1,600 plugins, and that number is growing.

Make a Living on Free and Open Source

Creating products and providing services for open source software is a viable way for web developers to diversify their income channels. If you have reusable code that you use in most of your projects, or have a good idea for a project that fulfills a need not answered by free solutions, then publishing a commercial alternative might give you some relief from the freelance project hunting cycle or that 9-to-5 day job. In many instances, developers can even make a living solely on products and services for free and open source software.

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About the Author

Rosston Meyer is a freelance web designer based out of Delray Beach, FL. He has collaborated on interesting projects over the years, including the Ocean Energy Council with family members and with Wizard Sleeve Toys on designer toy production and marketing efforts. You can find his work and social profiles at Rosstamicah New Media Design.

12 Comments

Harsh

March 13th, 2011

Interesting article about serving out an open sourced platform for earning (mostly by letting others earn).

How do individual and complete products fare in the open source market, though?

Stephen Ou

March 13th, 2011

I think a great business model for open source project is to charge for support.

Everybody gets the code for free, but if someone needs additional help, he/she needs to pay a fee.

A Web Developer

March 13th, 2011

There are quite a few ways to commercialize on (or with) open-source.

I provide an Apache, PHP, MySQL based software product called WampDeveloper (which is a LAMP-type distribution — except it’s for Windows).

To be successful here, you have to answer a difficult question that’s in the mind of the potential buyer…

“Why would I buy your product when I can get this for free?”

Additional feature lists will not. You have to solve an existing problem that the user has: a “pain point.”

If you can solve an existing pain point, which is not solvable with the alternative free versions, you can make money with open-source.

You’ll also have to target your market, engage the visitor in about 2 or 3 seconds, and with your marketing convert that visitor into a buyer. Not an easy task.

OSLiving

March 13th, 2011

This is a topic I hold close to heart and one that I’ve been blogging about, particularly with regard to WordPress. There are two main models when it comes to monetization of FOSS. Freemium and app stores. The one offers services over and above the software (support, modifications, consultancy work etc.) and the other commodifies core software add-ons. In both cases the core software files remain under FOSS license and develop laterally through community input. It’s interesting to note that the major platforms have been able to survive in part because they have found a way for their development communities to make a living from their popularity.

David

March 13th, 2011

It’s an interesting debate all i know is that there is definitely money to be made developing with the open source platforms.

Steven

March 13th, 2011

Opensource software is a tool not a business. There is just as much money, if not more in opensource software development. The cost to client is much lower than any other software, you are allowed to repackage and rebrand the OSS software as you see fit with no restrictive rules. Yes there is money to be made in OSS.

Michael Tuck

March 13th, 2011

Ask people like Linus Torvalds, Clay Shirky, and Jono Bacon. Open source is a great way to make money in a forward-looking, less carnivorously market-based way.

Audrius Jankauskas

March 14th, 2011

Nice article. Key elements are put together correctly. Would be interesting to see more comprehensive list of marketplaces. Each has different ideas and structure behind it. Beside Android Market, GetJar also should be mentioned.

echo

March 14th, 2011

so, dont afraid to contribute an open source project :)

Freebious

March 15th, 2011

The only reason I’m building dynamic websites is the availability of open source scripts.

Irina B.

March 15th, 2011

There’s an interesting blog post by Linux Journal about emerging app store model in Drupal: http://www.linuxjournal.com/content/drupalcon-rocked-chicago

Michael Tiemann

March 15th, 2011

I started the world’s first open source software company, Cygnus Support, in 1989. I made money in open source when we were a private company, when we sold it to Red Hat in January 2000, and since then, working for Red Hat.

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