Open Source: A New Model

Perhaps this will date me, but do you remember when OSS referred to Operations Support Systems?  Today, the new OSS stands for Open Source Software.  In fact, the Open Source Initiative (OSI) maintains the Open Source Definition (OSD) and approves licenses as OSD conformant.  There are no less than 70 OSD conformant licenses including the much publicized GNU Public License (GPL), Mozilla Public License (MPL) and the infamous Common Development and Distribution License (CDDL).


What does OSS mean to you?  Does it invoke images of Linux?  Do you equate OSS with free?  How about $1 Billion?  The price that Sun paid for MySQL.  Can you imagine a world without Ubuntu or Red Hat? 


Today I was engaged in an invigorating discussion regarding the validity of OSS as a business model.  As an avid supporter of OSS, I am actively involved in the community and utilize Ubuntu, Red Hat, Open Office, and everything in between in both my professional and personal life; I am a staunch supporter of the OSS business model.  My advisory is skeptical of OSS, a reluctant supporter of Microsoft, and believes the OSS business model will never generate revenue.  He points to the fact that outside of “eyeballs” and advertising dollars, no open source model generates any real revenue.


On the surface, I understand his points completely.  However, there is general confusion between OSS and free websites like Facebook, MySpace, and others.  Also, do you consider Novell or Red Hat OSS vendors or OSS supporters?  On one hand they are both generating revenue, on the other hand they are the dot coms that support the dot orgs.  Did Citrix and Sun waste $500 million and $1 billion respectively purchasing OSS vendors?  


I believe that there is a revenue model for OSS that will propel an OSS vendor into the hallowed territory of a $1 billion software company.  However, the new model must be radically different than today’s models and requires a bit of faith that if “you build it the revenue will come.”  For today’s start-ups, this will mean you need a VC that is patient, visionary, and willing to stay the course.


Of course there will be components of today’s licensing including dual-licensing, source code, and derived works but I have different ideas about how to collect, distribute, and generate revenue.  My ideas center on the power and will of the community, the users, and the strength in numbers. 


For now I’ll keep my model in a shroud of secrecy as someday I will test my theories.   In the end, the strongest validation will come from creating the next strong, independent, revenue generating, and cash flow positive OSS sensation.  Stay tuned!