how to make money out of open source software?

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28th, Oct 2011 FOSS4G Korea 2011 Keynote Talk OSGeo Korean Language Chapter Shin, Sanghee([email protected]) 한국어 지부

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You can watch real presentation of this material at this URL : http://www.youtube.com/watch?v=Ls7TaVQXK0Q

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Page 1: How to make money out of open source software?

28th, Oct 2011 FOSS4G Korea 2011 Keynote Talk

OSGeo Korean Language Chapter

Shin, Sanghee([email protected])

한국어 지부

Page 2: How to make money out of open source software?
Page 3: How to make money out of open source software?
Page 4: How to make money out of open source software?
Page 5: How to make money out of open source software?
Page 6: How to make money out of open source software?
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Page 10: How to make money out of open source software?

1.  Lower cost of innovation 2.  Faster time to market 3.  Share risk with others

Page 11: How to make money out of open source software?
Page 12: How to make money out of open source software?
Page 13: How to make money out of open source software?
Page 14: How to make money out of open source software?
Page 15: How to make money out of open source software?

Quantity

Price

Demand Curve Supply Curve

Quantity

Price

Demand Curve Supply Curve 1

Supply Curve 2

Page 16: How to make money out of open source software?
Page 17: How to make money out of open source software?

“If it’s digital, sooner or later

it’s going to be free.

Page 18: How to make money out of open source software?
Page 19: How to make money out of open source software?

Free

KRW 800

KRW 5,000

Page 20: How to make money out of open source software?

KRW 120,000

KRW 1,995,000

KRW 3,500

Page 21: How to make money out of open source software?

USD 4.95

Free

Page 22: How to make money out of open source software?
Page 23: How to make money out of open source software?

Culture

Brand

Reliability

Experience

Page 24: How to make money out of open source software?
Page 25: How to make money out of open source software?
Page 26: How to make money out of open source software?
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Page 28: How to make money out of open source software?

Community Open Source Software Developing Model

Core Developers

Administrators

Engineers Community

Contributions

Contributions

Peer Review

Use Cases

Testing

Documentation

Translations

Features

Forum Help

Bug Fixes

Roadmap

Design

Software

‘The Project’

* Source : James Dixon, The Beekeeper

Page 29: How to make money out of open source software?

80%

57%

41%

20%

18%

15%

15%

15%

10%

6%

5%

0% 20% 40% 60% 80% 100%

Price

Source Code Access

Community Code Review

Don’t Know

Bug Fix Turnaround

Security

Code Quality

Best Product Functionality

Easier to Adopt in Organization

Other

IP Protection

Open Source Software Advantages over Proprietary * Source : Barracuda Networks

Page 30: How to make money out of open source software?

Proprietary Software Advantages over Open Source * Source : Barracuda Networks

65%

47%

44%

35%

28%

23%

17%

9%

7%

4%

3%

0% 10% 20% 30% 40% 50% 60% 70%

Vendor Professional Services

Easier to Adopt in Organization

Automated Updates

Reduced IT Support

Best Product Functionality

Security

Code Quality

Don't Know

IP Protection

Other

Price

Page 31: How to make money out of open source software?

1. Lack of formal support and services

2. Velocity of change

3. Lack of roadmap

4. Functional Gaps

5. License Types

6. Lack of endorsements by independent ISVs

* Source : Ray Lane, 6 barriers to open source adoption

Page 32: How to make money out of open source software?

Advantages of

Proprietary

1.  Professional service 2.  Continuous support 3.  Easy to use 4.  Reliability 5.  Functionalities

Advantages of

Open Source

1.  Cheaper price 2.  Source code access 3.  Community review 4.  Quicker bug fix 5.  More standard based

Commercial Open Source Software

‘Whole Product’

Page 33: How to make money out of open source software?

Software

Integration

Software

Services

Installation

Training

VARs Other

SW/HW

Certification

Support

<Whole Product>

<Open Source SW>

Page 34: How to make money out of open source software?

Core Product (Basic functions, symbols, experiences)

Actual Product (Quality, design, brand, packages)

Whole Product (Additional services)

Market Offering (Additional benefits offered by partners)

Page 35: How to make money out of open source software?

Commercial Open Source Software Business Model

Customers

Partners

OEMs

Open Source

Software Community

Commercial Open Source Company

‘Go To Market’

Sales, Marketing, Support, Services, Engineering, Pro

duct Mgmt.

+

+

+

Community can hear more functionalities & requests

Customers can gain higher quality software at a better price

The bigger community

the more resources

Page 36: How to make money out of open source software?

ACCESS

MONEY

TIME

SKILL

Customer

Next Demand

Next Market

Page 37: How to make money out of open source software?

Thank You!!!