Can You Sell Something That's Free ?

There is an interesting trend happening within the Open-Source Software community. There appears to be a steady rise in the number of companies that are being quite successful in monetizing Open-Source Software and building a thriving business out of it.

Take for example, Red Hat. They had an IPO in 1999 and have never looked back. Under the stewardship of Matthew Szulik, Red Hat grew from a rag-tag assemblage of geeks and hackers, into a half-billion dollar a years services corporation. Matthew left a few years ago, and Jim Whitehurst was given the nod to grow the company into a billion dollar company. From all accounts, he is doing a pretty good job of it.

Remember, this is Open-Source Software. Nobody OWNS the code. Instead, these companies earn the right to provide services AROUND this software with their customers. In this case, they are selling their intellectual property in terms of services & support, instead of software licensing.

Another example is Digium. My namesake - the OTHER Mark Spencer in the Open-Source Software world - created a project called Asterisk. It is an Open-Source telephone switch (often called a PBX). It forms the heart & soul of a Voice-Over-IP (VoIP) system. He developed the software for free.

His company, Digium, designs, manufactures & sells the hardware boards that go into a computer to convert the signals from the telephone provider into a digital signal the computer can handle. Effectively, his free software creates a demand, and his business supplies that demand ! very good business indeed !

A third company would be JBOSS, founded by Marc Fleury. There is the open-source JBOSS, which is found at www.jboss.org and then there is the commercial JBOSS, found at www.jboss.com  For the record, JBOSS was acquired by Red Hat about 4 years ago, ostensibly to shield them from a hostile purchase by another giant software company - who is decidedly AGAINST open-source software !


The opinions expressed are purely those of the author. Opinions are like noses - everyone has one, and they are entitled to it !