The little red hen business model

Summary:One reason closed-source developers may continue to feel smug is they have a working business model. Charging for code is an easy business model.

With Love, Little Red HenOne reason closed-source developers may continue to feel smug is they have a working business model.

Charging for code is an easy business model. You know how hard to work on a project based on how many people pay you for it, and how much they pay.

I know open source code doesn't always mean free code. The heart of the idea isn't in the price but in the fact that the buyer can look at it, and may then be under an obligation to share improvements.

But most open source projects don't charge for code. Thus many open source projects don't know the market demand for their work, and are forced to beg.

Such projects can be in big trouble if a key sponsor drops out. This happened to the Open Graphics Project recently. The project leaders are continuing to go ahead on their own dime, but they're looking for $1 million, from either investors or a partner.

This is just one troubled project. There are others. David Berlind wrote recently how JasperSoft took over its open source reporting tool, JasperReports and began charging for it, calling the result "commercial open source."

The link between the funding and the work is one big fault line for the open source world. Open source advocates keep talking about "support," but that only kicks in once someone has taken what they made. Paid source developers can usually get by on a little capital, a few loans, and the pre-orders. As projects become more complex, requiring more time and money to accomplish, the advantages of this paid source model will increase.

How can open source advocates turn this around? They might use the Little Red Hen business model.

Companies that really want the software may pre-pay for support. Future support charges might be discounted to those who provide help. This can come in many forms, staff time, physical resources, even testing.

Those who grow the wheat and bake the bread should get to eat it first. I suspect many open source projects already work in this way, and it makes a lot of sense. What do you think? Let me know in TalkBack.

Topics: Open Source

About

Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

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