How can large open source projects be monetized?
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This document discusses how large open source projects can be monetized. It begins by introducing Bruno Lowagie, the original developer of iText, and poses the question of how to monetize large open source projects. It then discusses some of the expectations and demands users and companies have of open source developers. Various monetization strategies for open source projects are presented, including donations, ads, documentation, support, and dual licensing. The document uses iText's experience as a case study, and discusses licensing options like GPL, LGPL, AGPL and open core models. It also addresses copyright enforcement and presents iText as a success story for monetizing an open source project.
How can large open source projects be monetized?
- 1. © 2016, iText Group NV© 2016, iText Group NV OPEN SOURCE INDIA How can large open source projects be monetized? Bruno Lowagie, CTO iText Group NV
- 2. © 2016, iText Group NV Introduction: who and what? How can large open source projects be monetized?2 Bruno Lowagie Original developer of iText ex-CEO, current CTO at iText Group
- 3. © 2016, iText Group NV An economic law How can large open source projects be monetized?3
- 4. © 2016, iText Group NV How can large open source projects be monetized?4 You’re an open source developer…
- 5. © 2016, iText Group NV … What are the implications? Users will ask questions on how to use it, Users will demand that you fix bugs, Companies will expect warranties (even if the license says they accept FOSS as-is), Companies will want 100% clarity with respect to the IP, Companies will expect you to maintain and update the software, Companies will want you to upgrade to the newest specifications, You will be cursed if you don’t answer fast / friendly / accurate enough! What if you can’t live up to all these expectations? How can large open source projects be monetized?5
- 6. © 2016, iText Group NV How can large open source projects be monetized?6 What can you do about it?
- 7. © 2016, iText Group NV Create a business model How can large open source projects be monetized?7 http://www.theserverside.com/news/2240234582/Reflecting-on-open-source-software-Java-9-and-startup-strategies-at-Devoxx-2014 http://www.zdnet.com/article/openssl-needs-corporate-funding-to-avoid-heartbleed-repeat/ http://arstechnica.com/information-technology/2014/04/tech-giants-chastened-by-heartbleed-finally-agree-to-fund-openssl/
- 8. © 2016, iText Group NV Ideas to monetize your project How can large open source projects be monetized?8
- 9. © 2016, iText Group NV How can large open source projects be monetized?9 iText: the early years
- 10. © 2016, iText Group NV Donations How can large open source projects be monetized?10
- 11. © 2016, iText Group NV Generating revenue using ads How can large open source projects be monetized? Free online tutorial: • Google AdSense • 2004: $8,900 • 2005: $14,500 • 2006: $6,200 • 2007: $2,350 • 2008: $1,900 • 2009: $1,500 • 2010: $280 • 2011: $520 • 2012: $350 • 2013: $160 11
- 12. © 2016, iText Group NV Making money with ads? How can large open source projects be monetized?12
- 13. © 2016, iText Group NV Writing documentation How can large open source projects be monetized? 1st Edition: 2006 • 11.600 copies • Approx. $33K 2nd Edition: 2010 • 9.200 copies • Approx. $30K 13
- 14. © 2016, iText Group NV Selling support How can large open source projects be monetized?14
- 15. © 2016, iText Group NV Selling professional services Not scalable There are only so many hours in a day All time spent on a tailor-made application is time you don’t spend on your product Are you really going to compete against these guys: How can large open source projects be monetized?15
- 16. © 2016, iText Group NV How can large open source projects be monetized?16 What did we do at iText?
- 17. © 2016, iText Group NV Which business are you in? •For instance: Amazon sells books and AWS •For instance: Google sells ads, services,… •For instance: Uber sells rides Are you selling a service? •For instance: an ERP system •For instance: a PDF library •… Are you selling software? I’m assuming a context of selling software How can large open source projects be monetized?17
- 18. © 2016, iText Group NV B2C or B2B? •For instance: a tool or a game people can download, •Users download and install the tool: use, no distribution, •The users have no commercial activity relating directly to the software. B2C •For instance: a library that parses XML, creates PDF,… •It doesn’t work unless you write some code around it, •Typically, it is distributed (e.g. in a SaaS context). B2B I’m assuming a B2B context How can large open source projects be monetized?18
- 19. © 2016, iText Group NV Copyright versus Copyleft Copyright law • allows an author to prohibit others from reproducing, adapting, or distributing copies of the author's work. Copyleft • gives every person who receives a copy of a work permission to reproduce, adapt or distribute the work as long as any resulting copies or adaptations are also bound by the same copyleft licensing scheme. How can large open source projects be monetized? © © 19
- 20. © 2016, iText Group NV Open Source License overview How can large open source projects be monetized?20
- 21. © 2016, iText Group NV GPL-style software licenses It’s all about distribution How can large open source projects be monetized?21 License: MPL / LGPL GPL AGPL Car distribution (e.g. OEM) Commercial use? OK for gratis commercial use Commercial license needed Commercial license needed Bus service (e.g. SaaS) Commercial use? OK for gratis commercial use OK for gratis commercial use Commercial license needed Free/Proprietary Before iText 5: Improvements engine: LGPL Car or bus: can be proprietary Car: must be GPL Bus: can be proprietary Since iText 5: Car or bus: must be AGPL Or: buy commercial license
- 22. © 2016, iText Group NV Dual licensing How can large open source projects be monetized?22 Enterprise closed source open source commercial source FOSS Company The product is available for free for those who accept and comply with the F/OSS license If the product is also distributed under another license, a commercial license is needed. The FOSS company makes the product available under a custom license for those who pay for the product: • Support, • Warranty, • Indemnification, • Release from the requirements of the F/OSS license
- 23. © 2016, iText Group NV Open Core licensing: e.g. iText 7 How can large open source projects be monetized?23 Open source Closed source Your project ?
- 24. © 2016, iText Group NV Business Source License: e.g. MariaDB How can large open source projects be monetized?24 All source code is open, but not “open source”: it’s “business source”. MaxScale is only needed in case of heavy use of MariaDB. This prevents perceived abuse by GAFA & co.
- 25. © 2016, iText Group NV How can large open source projects be monetized?25 What are GAFA companies doing? Googleplex, Mountain View, CA
- 26. © 2016, iText Group NV When to use a permissive license? •You want to use software and do whatever you want with it: •You sell software as a service (Google) •Your main business is ads; your users are your product (Facebook) •You sell rides (Uber) •You sell professional services (RealDolmen) •… Suppose that you’re Google, Amazon, o a similar big organization •Developers can make you “King” and allow you to disrupt entire industries! •You don’t want to pay for software; you want developers to release their code for free. The software used in your company doesn’t represent any value, but… •You hire / sponsor zealots that are popular among developers looking for a role model. •You spread messages such as: “Asking money for software is bad” and “The (A)GPL is evil!” •As soon as a product doesn’t meet your needs anymore, you drop it and replace it. Hence you brainwash developers How can large open source projects be monetized?26
- 27. © 2016, iText Group NV Beware of “anti GPL” propaganda • You are the King in your business (selling ads, rides, services,…). • Your value is not in the software, hence you can give it away for free. Suppose that you are the next GAFA company • If they aren’t competitors, they might improve the software. • If you can also benefit from their improvements: you win! • If they are competitors, they can try to copy you, but: • You can easily crush them because your brand is King, • You can buy them if they are interesting (and possibly kill them afterwards). Other companies can use your software • Oracle dropped Glassfish, • IBM backed away from Geronimo, • Pivotal left Groovy… As soon as there is no longer an economic benefit, drop all support How can large open source projects be monetized?27
- 28. © 2016, iText Group NV Is that a sustainable situation? • Will we wait to put out the fire until after the house burned down? When will we be confronted with the next Heartbleed disaster? • Open source used to be written by enterprising people. • Some of them were smart enough to become successful entrepreneurs. • Nowadays, it’s as if most open source software is written by employees. • Developers aren’t King; managers are. • Developers are disposable, replaceable jokers… • What will be the impact on the innovative aspect of open source? Who is currently creating open source software? How can large open source projects be monetized?28
- 29. © 2016, iText Group NV How can large open source projects be monetized?29 Can a FOSS license be enforced?
- 30. © 2016, iText Group NV The problem with B2C How can large open source projects be monetized?30
- 31. © 2016, iText Group NV Copyright infringements How can large open source projects be monetized?31
- 32. © 2016, iText Group NV How abuse is detected •For instance during the due diligence for an investment or in the context of M&A A third party performs an audit •For instance: when an integrator introduced iText without telling his customer A future customer finds out •Directly “we are using iText at our company” or indirectly “We have a question about iText” A developer informs us •For instance: we see hundreds of visits from the private network of a specific company •For instance: we discover a PDF that contains iText’s visible or hidden fingerprints We find out ourselves •Example: lawsuit against German company A partner informs us How can large open source projects be monetized?32
- 33. © 2016, iText Group NV Step 1: Go to bailiff Document the infringement: How can large open source projects be monetized?33 June 12, 2015
- 34. © 2016, iText Group NV Step 2: send a Cease and desist How can large open source projects be monetized?34 June 16, 2015 June 30, 2015
- 35. © 2016, iText Group NV Step 3: go to court How can large open source projects be monetized?35 July 8, 2015
- 36. © 2016, iText Group NV Step 4: Get confirmation from court How can large open source projects be monetized?36 July 17, 2015
- 37. © 2016, iText Group NV Step 5: Get confirmation from abuser How can large open source projects be monetized?37 August 27, 2015
- 38. © 2016, iText Group NV Is this the way we make customers? Of course not! • We are ethical people, but we expect users to be ethical too! • We prefer a friendly negotiation over a trial before a court • You don’t make customers by adopting a punitive approach On the other hand, we can’t afford being abused… • … so we have to set an example once in a while! • Why should we tolerate blatant abuse? The courts are there to help you • Case solved in about 2 months • All costs paid for by the party that lost the case How can large open source projects be monetized?38
- 39. © 2016, iText Group NV How can large open source projects be monetized?39 Open source success story
- 40. © 2016, iText Group NV Awards •BelCham Entrepreneurship Award: “Most Promising Company of the Year 2014” •Deloitte’s Technology Fast 50: Winner in Belgium 2014 •Best In Business International 2015 Silver Award: “Product of the Year” •American Business Awards 2015 Bronze Stevie: “Most Innovative Company of the Year” •European Business Awards 2015/16 National Champion: “Entrepreneur of the Year” •Deloitte’s Technology Fast 50: 2nd place in Belgium •JavaOne Rockstar Award 2015 •European Business Awards 2015/16 National Public Champion: winner of the national vote in Belgium •Flanders Investment & Trade 2016: top 3 in the “Lion of the Export” •American Business Awards 2016 Bronze Stevie: “Most Innovative Company of the Year” •International Business Awards 2016 Silver Stevie: “Most Innovative Company of the Year in Europe” •European Business Awards National Champion 2016/17: “Business of the Year with Revenue of 0 to 20M euro” 2016 How can large open source projects be monetized?40
- 41. © 2016, iText Group NV How can large open source projects be monetized?41 You could be in this picture…
- 42. © 2016, iText Group NV How can large open source projects be monetized?42 Questions from the audience? iText Software Asia sales.isa@itextpdf.com +65 67 16 97 85 itextpdf.com