Micheal Monty Widenius - Free Open Source Software Entrepreneurship

How to create a
successful (in business
Michael Widenius
and development) open MySQL & MariaDB founder
monty@mariadb.org
source project.
TIS Innovation park, 2013

Erich S. Raymond & Linus Torvalds

"Given a large enough beta-tester and codeveloper base, almost every problem will be
characterized quickly and the fix will be
obvious to someone”
or how Linus Thorvalds rephrases this
“Given enough eyeballs, all bugs are shallow”

Open source, the good and the bad
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Open source is a better way to develop software
> More developers
>
>

Better code (in many cases)

>

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More spread
Works good for projects that can freely used by a lot of
companies in their products.

It's very hard to create a profitable company developing an
open source project.
> Not enough money to pay developers.
>

Hard to get money and investors for most projects
(except for infrastructure projects like libraries).

This talk is for

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People wanting to understand how open source works.
People wanting to create an open source project.
People wanting to participate, drive or fork an open
source project.
People wanting to create a company around open
source code.

In addition I will talk about:
●
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How to make money with Open Source
Difference in business model between MySQL and
MariaDB.

Top reasons for creating an open source project
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Solving one of ones personal problems
> For the company you are working (MySQL/PHP)
>

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As a research project, part of your hobby (LINUX)

Re-license an existing closed source project to open
source to get the benefits of open source (Netscape).
To get more developers on an internal company
tool/project (no money loss if Open Source)
Wanting to earn money and at the same time do
something good.
Wanting to give back something to the open source
community.
Wanting to create a company and compete with the
'big guys' with “the power of open source”.

Developing software open source is in human nature
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You solve your own problems and get free help and
development efforts from others while doing it.
You pariticpate to increase your reputation (to get a
new job?)
You use open source because it's less expensive
(and re-usable)
You give patches back to not have to maintain them.

There are of course people that participate because they
belive in the open source cause or want to help others,
but these are a minority (and most still gets paid for this).

Before starting a new open source project
●

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Check that if there is already an existing actively
developed project.
> It's always better to participate than to do new
project or a fork!
If there are only old dead projects, do some research
why they failed and learn from their misstakes.
> Sourceforge, Github and Launchpad is filled with
dead projects.
Find a company or a group of users that wants to work
with you to define the scope of the project.
> You want to have users ASAP that are using the
project in production!

It's not just software
The most important part with open source is to create
an active community!
● You also need (to interact with the community):
> Web pages (someone needs to design these)
●

>

A forum or a knowledgebase, email lists, bug system.

>

Documentation & localization

>

Packages, build system, mirrors (for downloads)

>

Source code repository

In the beginning you can use github or launchpad to host
the project and Open Build Service to build your project,
but over time you will need more controll and do this
yourself.

You need a good team and active community
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A designated active leader (Linux) or active leaders
(MariaDB / PostgreSQL) that have the respect from the
community.
A group of good open Open Source Citizens maintaining
the community.

People with good "old time" coding style standards
that actively teach others and participate with the
community.

Active and passionate user and developer community
around your product.
Developers that is using the product daily in production.
Developers that need to extend the product for their own
needs.

Generally the quality of the product is defined by the
technical leaders

Transparency is critical for long time success
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An open development model (all email list, discussions
architecture, decisions should be open).
Clear guidelines for how things are done and will be done.
Clear license and business model.
Extensive documentation.
Be clear about your roadmap and release schedule.
Good open review process of patches that enforces
quality.
Be transparent with your plans and let users influence
them.
Be open about your bugs, and when they will be
addressed.
Keep your promises!

Communicate with your community
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Attend conferences and talk about your product.
Listen to what your users want and either do it or help
them do it themselves.
Make it easy for people to communicate with you and
find information about your product!
Ensure that most questions on your forums and email
lists are answered.
Understanding that people who write the code 'owns'
the code
Don't expect the community to produce any code.

Recognize that the path for turning a user to a customer
can be long, and don’t let short term monetary interest
distract your long term winning strategy

Be good open source citizens
Be open about your use of external code - Share the
fame!
● Provide quick feedback to providers (bug reports and
fixes, code enhancements, ideas)
● Help others in forums (around your code, and around
related code you know)
● Keep up a high ethical standard on the email
lists/forums.
● Don't talk bad about competing projects.
> Fact based comparision is ok.
●

Being a good Open Source Citizen will build trust in you
and your product, and will pay off over time.
Building a supportive Community later in the game is
extremely hard - You should start day 1
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You need to get the product out there and used!
Release early - release often, binaries + source.
● Aim that each release, including alpha, should be bug free
enough to be usable in production by those that try it.
> People will first use your product and only start
extending when they belive in it and it's easier to extend
it for their own needs then move to something else.
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Work with the distributions and cloud providers to get the
product in there.
Use a good open toolset for development (Sourceforge,
Launchpad or own) to make it easy for others to
participate.

Doing business with Open Source

Open Source is a philosophy and a development
model.
Open Source does not gurantee that you will get
enough money to develop and/or support your
product.

Different kind of Open Source products
●

Products developed by the community.
> Typically larger projects that are developed by many
companies to solve their business critical needs or to
embedd in their products.
Linux, PHP, Apache, MariaDB
Products that are a tools for the company and released as
open source to get more community development.
A small team or company that is developing and driving an
Open Source product as their main offering.
> These have often a hard time to compete with closed
source software (not enough money for full time
developement).
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MySQL, JBoss, Wordpress, most open source
software

Questions to consider when creating a company
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Do you plan for a virtual company (“no offices”)?
Are you creating a company of equals? Should the
company be owned by employees (Hacking business
model)?
Do you want to concentrate on services or
development ?
> If development, what license to choose?
Do you plan to have a big community or work with a
few big companies ?
Do you plan to take in investors ?
> If yes, then you need an 'exit' plan.

What business model to choose?
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Service company
>
>

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Man powered services (support, training, consulting)
Valuation 2 x revenue

Software company
>

Licensing, Software as a service (SAAS),
Subscription

>

Valuation 10 x revenue + X * number of users

What is the final goal with the company
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Sold on the market
>
>

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Unpredictable future for product/employees
Quick, often high, profit for owners

Go public on stock market
>
>

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Original owners can still be part of steering the
company
Somewhat unsure profit (as owners can typically
only sell after 6 months)

Owned by founders, employees (and investors)
>
>

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Stable predictable future
Owners gets dividends, employees gets bonus

Create an open source foundation

Why go Open Source?
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Spread the product more quickly (more users)
Get some part of the development done elsewhere (lower
cost)
Get things more tested and more bug reports (higher quality)
Possible to get development done in 'not business critical'
directions (more useful product)
Easier to find good developers, partners and customers
The above means more market recognition, feedback, leads,
business, partners and sell opportunities and a strong
trademark.
In general open source projects gets more feedback and
better bug reports than closed source project.

Reasons for users to trust a open source vendor
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Open source vendors are more trustworthy as they
depend on trust to survive
No vendor lock in. Your investment in using the product is
safe even if:
> Vendor goes out of business
>
>

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Vendor would surprisingly change business terms
radically
Vendor would stop supporting the version of the product
you are using

If this would happen to a popular product, someone would
go away with the code and start maintain it themselves
Little risk for hidden trap doors as one can examine the
product code

Benefits for developers using open source vendor
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Easy to get access, look at and use the code
Freedom to examine and change any part of
the code to satisfy your business reasons, fix
bugs or port to other systems.
Freedom to find anyone to do the above
Freedom to use (read, build and change) the
code and redistribute the code in an open
source environment.

Benefits for big business / countries using open
source
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You can develop your own infrastructure to tune the
software for your own means (language, unique
requirements)
> Facebook, Google
>

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Brazil, Iceland

You get internal knowhow you can utilize for business
Not depending on an outside vendor (for minor
things).
No license costs; Low to very low cost of ownership!
It's in your interest to collaborate with the original
community for long term sustainability
> A full fork is expensive in the long run!

When go Open Source?
IF you can create a sustainable business model
around Open Source, proprietary vendors will have
hard to compete with you
It's nowadays increasingly harder to sell closed
source solutions in a lot of business sectors.

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Nor surprisingly, it's hard to choose the right license
for your software as it significantly impacts your
strategy, i.e.
How you can co-operate with your user community
How you can build your business

How to choose an OS license?
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Key Questions:
What is your business idea around the open source
product?
> Services, subscriptions and/or licensing ?
What rights do you keep to your code when used,
modified and potentially redistributed?
What kind of community do you want around the
product?

The main open source licenses
(Very simple view)
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Public domain
> Gives user freedom to do anything, including changing your
copyright and claim they wrote it.
BSD/Apache
> Gives user freedom to full use, but needs to keep copyright in
the source code.
LGPL
> Gives user freedom to use freely, but if they distribute it
changed, they need to publish the changes under LGP
GPL
> Gives user freedom to use it freely, but if they distribute it,
they need to publish changes and their code under GPL
AGPL (Optional addition to GPL V3)
> Free usage, but users needs to publish the code and the
code connected to it even if not distributed (like web server) .

Business models to use with open source
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Open-Core Model - have an open-source core and sell
closed-source features on top of it (e.g. SugarCRM)
Dual Licensing Model- one product/project that gets
licensed with a viral, GPL-style license and a commercial
closed-source license (e.g. MySQL)
> Another option is “Business source” or Time Delayed
Open Source
Services Models - where you get to download a
productized version of an open-source project and pay a
fee for the support you get on it for new features.You can
normally also pay for training, features etc
Subscriptions (Usually a combination of support,
extended product lifetime and guaranteed updates)
Creating a non profit foundation to fund the

Open Core
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Probably most popular way nowadays for business trying to do
open source first time.
What Oracle is doing with MySQL and EnterpriseDB with
PostgreSQL
Is not an open source business model, because it uses closed
components and most of the benefits open source developers
expect from the product is gone:
>
You can't change, modify, port or redistribute the code
>

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You are locked to one vendor

You may be able to create a small developer community around
the product but mainly by people that doesn't need the closed
source extensions.
For community developers, the “worst” possible offer is open
core or closed source that used under subscription and stops
working when subscription runs out

Dual licensing
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Used first by Ghostscript. MySQL was the second
product to use it.
Can only be used when you have full rights to all
the code.
Give out the same code under two licenses, for
example GPL and normal commercial closed
source.
Companies that can't use the GPL (because they
don't want to give out their code) can buy the
closed source version.
Only works well for infrastructure, easily
embeddable products, like libraries or databases.

Business Source
(or Delayed Open Source)
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Not an open source license, but gives the community
similar advantages.
Source code is available from the start. Anyone has
the right to copy, modify & distribute but can't use it
commercially under some conditions you define.
After X years the code automaticly converts to some
open source/free license. The date has to be explicitly
set in all source code files to avoid misunderstandings
Better than Open Core as this removes the “one
vendor” problem and the code will eventually be free.
Investor friendly (as there is a way to force some users
to pay).

Business Source
Forces good behaviour
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You have to do frequent releases
You have to innovate and fix bug, to ensure that users
want to have the latest release.
Ensures that the company is not bought by a 'bad
entity' that just wants to close down the project.

This is ensured by that if the project is not developed
future, anyone can continue with the original code and,
after a short delay, take over the project.

Recommendations for Business Source
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3 or 5 year before it becomes open source.
> Depends on how long you have between releases
and how good your investors are.
Target that 1/100 or 1/1000 should have to pay.
> The bigger your 'free community' is, the more benefit
you get from it.
Free version and commersal version should have
identical source code and tools.
> Do NOT try to combine this with open core or closed
source. Instead tune the Business Source license so
that it can generate the income you need to
succeed.

Business Source
Resources and background
Created around 2004 by David Axmark and Monty
● First news article about it (with lot's of comments):
> http://www.zdnet.com/open-source-its-true-cost-andwhere-its-going-awry-by-monty-widenius7000016024/
●

Published in http://timreview.ca/article/691
● Overview at http://monty-says.blogspot.com
● Fred Trotter is doing something similar, calling it
“Open Source Eventually License”
> http://projects.opensource.org/pipermail/licensediscuss/2013-August/001072.html
●

Business Source
Lots of confusion
●

Discussed on Slashdot:
>

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http://developers.slashdot.org/story/13/06/26/155221
5/monty-suggests-a-business-friendly-license-thattrends-open

Lots of confused people about the intention:
>

http://readwrite.com/2013/05/31/mysql-co-founderwants-you-to-pay-up-for-opensource#awesm=~ofq8ilsT7Ja6kG

>

http://channel9.msdn.com/Forums/Coffeehouse/Busi
ness-source-Is-it-really-open-source-at-this-pointMonty-Widenius

Business Source
Projects using it
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Baasbox just switched to use Business source
>

“Open source backend for your apps”

>

Discussion at
https://twitter.com/arduino/status/399718918639857
664

>

Free for everyone except third party SAS vendors

The importance of selling licensing
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MySQL would never have been possible without licenses.
Very hard to get companies to pay for support or
development
> Companies expect to use open source for free
>

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Exception is companies you work with to develop the
open source project

Subscriptions are good, but also hard to sell
Licensing is “free money” for the project
> You need one entity that holds the copyright to the whole
project or use SAAS (Software as a service)
>

You need to be able to dual license your project

>

Your project is an infrastructure project that is usually
embedded into others.

Business differences between MySQL and MariaDB
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MySQL Ab made money on services (support,
training, paid for development) and dual licensing.
Designed to be able to take investors.
MySQL was mainly developed by one company.
MariaDB has companies like SkySQL that does
services around it.
MariaDB Foundation gets donations to drive
MariaDB development with the community.
A lot of development on MariaDB is done by
SkySQL, but there is also a lot of community
development, (Google, Taobao, ...)

Micheal Monty Widenius - Free Open Source Software Entrepreneurship

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