Misunderstanding open source #3: applying ‘Free Software’ religion to open source business models

Applying the philosophies of the Free Software movement to the world of open source business models is a pointless exercise.

To the participants in the open source movement, open source is a great way of creating software – the transparency, openness, and participation/contribution mechanisms enable better software to be created more quickly. This is a practical, pragmatic viewpoint. This is the viewpoint of the commercial open source companies. Open source advocates want a future where great, customizable software is available for every task or domain.

The participants in the Free Software movement see things differently. They have a purist viewpoint of  intellectual property rights, and apply their viewpoint religiously. Free Software advocates want a future where intellectual property and intellectual property laws are a thing of the past.

When Free Software advocates give opinions about commercial open source companies and business models, its like sending vegans to a  steak-house – there isn’t much on the menu to their liking.

Open Core Business Model

A particularly contentious issue for Free Software advocates is the ‘open core’ business model. In this model a company creates an open source code-base in a particular domain (business intelligence in our case), and provides additional features, support, services as commercial offerings. The idea is that the community around the open source code will help lower the development costs so that the commercial offerings can be at a price point that is disruptive in that domain.

The open core model only works if the open source software is full-featured and valuable. If it is not there will be no community, and no community contributions. Without this the development costs will be the same as with a proprietary development model and the company will fail. In most cases the ratio of installations of the open source software vs the commercial version is 99:1 or higher.

The Free Software advocates, however, claim that the ‘open core’ software is hobbled, restrictive, or so feature depleted, that everyone needs the commercial version. This is utter nonsense. Take Pentaho, we offer in open source:

• An Extract/Transform/Load (ETL) tool – Kettle.
• A metadata editor and OLAP schema editor
• A report designer
• A Business Intelligence server complete with ad-hoc reporting, pivoting slice/dice UI, dashboard framework, and scheduling.

I see the open core model as vital in this phase of the growth of open source. Imagine a future where the majority (or all) of the software used by individuals and businesses is in open source. How do we get there? By creating an environment where innovators and investors are discouraged from creating any open source? That does not help. I see the open core model as something that provides new software start-ups and established software vendors a viable option to use an open source model. If there is any significant up-front development or investment needed, a support/services only model is rarely seen as a viable model. For an ‘open source future’ the usage of the open core model is much more preferable to the proprietary option.

When it comes to start-ups the options considered viable (by most investors) are
1) produce 80-90% open source code with an open core model
or
2) produce 100% closed code under a proprietary model

Given these choices the first option is clearly preferable to open source advocates. To Free Software advocates, using an ‘exclusively 100% free’ viewpoint, the open core model is flawed and so they argue and petition against it – regardless of the practical consequences, which is more proprietary software.

If you reject the open core model you are, in effect, asking start-ups to stick to proprietary development. This is a step backwards and delays the creation and adoption of open source software over the long term