open source and small business

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alex.barylski
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open source and small business

Post by alex.barylski »

We have all heard of the plethora of ways to make money from open source.

1) Offer services
2) Premium support
3) Customization

These money making avenues are usually coupled with large, successful, open source projects with enterprise user bases:

- Linux
- MySQL
- Apache
- PHP

*** Smaller Scale***

- SugarCRM
- Mambo, Joomla, etc

What about smaller projects which are intended to serve a vertical market, which are done right, both in Interface and Implementation.

Software IMHO should be so simple, there is no (or very limited) need for service or support. This kind of defeats the arguments for making money from open source. So my question becomes this: "Perhaps the open source model only applies to large business?"

Cheers :)
Last edited by alex.barylski on Thu Aug 16, 2007 5:35 pm, edited 1 time in total.
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themurph
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Post by themurph »

Software IMHO should be so simple, there is no (or very limited) need for service or support.

That's great, as a generalization, but in the real world, things don't always fall in to place that easily. I don't care how good of a developer you are.

No matter what market you are servicing or coding for, even within very targeted vertical markets with widespread standardization, different businesses simply do things in different ways, and have vastly different wants and needs. Furthermore, markets change, even singular markets... and they do so constantly. Core needs change. Legislation is passed. Standards change. New variables are introduced. Businesses expand and shrink. Employee turnover occurs at all levels. Most importantly.. technology advances. Whether it's a one man shop or a large scale multi-national enterprise. The same rules apply. People are going to need and want support.

They want to pick up the phone and have someone on the other end say "What's wrong? How can I help you? Yes I can change that for you right away". I would hazard to say this is even more important when open source is involved, and more important still in a small business setting. Most of my small business clients have trouble operating their Microsoft word processors correctly. Say the word "linux" or "open source" or even "software" in front of them, and their eyes tend to glaze over a little.

You don't have to know the inner workings of an internal combustion engine to drive a car. But you'll save a hell of alot of money in the long run if you invest in a relationship with a good mechanic.

"Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time. But for right now, for your sake, for your daughter's sake, ya might wanna think about buying a quality item from me."

- Tommy Boy
wei
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Post by wei »

bsically, no two businesses are the same
alex.barylski
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Post by alex.barylski »

Haha...indepth reply wei. :P

I realize no two business are the same, but I have yet to find a small business which succeeded at making money off open source, especially when the target audience is small business.

I am aware of at least a dozen companies that sell webware to small business but none which offer a "truely" open source solution, much like SugarCRM.
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Chris Corbyn
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Post by Chris Corbyn »

Aren't you looking at this from a "now" point of view? Surely MySQL, Linux and everything else that's now "big" started of as a small project. If you're successful then naturally you will become something other than small. I doubt MySQL just fell out of the sky as a huge company.

EDIT | And if you're referring to small companies that target small markets then are you surprised you don't know of any. Isn't that the point? They're small companies targeted at small markets so what reason would you have to know about them?
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The Phoenix
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Re: open source and small business

Post by The Phoenix »

Hockey wrote:Software IMHO should be so simple, there is no (or very limited) need for service or support. This kind of defeats the arguments for making money from open source. So my question becomes this: "Perhaps the open source model only applies to large business?"
Many corporations won't use a product unless they can get a support contract for it - even if its completely, 100% well-designed. Its reasonable, since shareholders expect corporations to spend their money wisely. As a result, even a well-designed software package can need support contracts.

But beyond that, even for small businesses, installation, configuration, tuning, and more are all things that can offer dramatic value. Consider the yoga instructor down the road, or the small clothing shop owner across town.. they don't have any IT experience. They don't even know what the little "E" is that they click to get on the 'net. Those are people that will find substantial value in a turnkey installation and setup.

Even beyond those issues, each business is different, and needs the software tuned for their needs. Will Apache run with default settings well on most loads? Sure. But a business that gets thousands of hits a minute needs custom tuning.

Each business is different, and each software package is different. You can definitely have an easy to use product and still make money off of support and customization - even to small businesses. In fact, in many ways, there is more opportunity at the small business level. Large businesses can afford Microsoft licenses, and huge support contracts with hundreds of calls a year. Small businesses could go out of business with a single poorly timed day of downtime.

Research your market, and sell to their needs. Thats just good business.
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s.dot
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Post by s.dot »

Advertisements on web sites also make money. If the open source software has a web site, which it should.
Set Search Time - A google chrome extension. When you search only results from the past year (or set time period) are displayed. Helps tremendously when using new technologies to avoid outdated results.
jason
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Post by jason »

Not needing support is not indicative of being well designed. Indeed, not needing support really means not having a market. Well designed software needs support. Support isn't always "I don't understand how this works" but rather, "I need this software to support this feature."

Indeed, if well designed software didn't need support, then no software ever could be described as well designed.

Software doesn't live on it's own, either. It works with other software. No software is perfect. Look at Mac OSX. Even if it was perfect software, it would still require support, as it works with other hardware, other products. And even if all that hardware was made by Apple, it would still require support, as each component is different. And of course, not all needs are the same.

As an owner of a small business, I can assure you support is more than just passing the buck to someone else. I've purchased support from companies for open source products. Not because the products were poorly designed. On the contrary, it's because the products were well designed that I purchased additional support. After all, while I might be able to handle 90% of the issues, someone who is an expert with the product can actually tell me how best to use it for my special cases.

Of course, support isn't just about supporting their products. Let's say I have support for MySQL (which I did), and something goes wrong with the servers and the database crashes (because, you know, database servers need power). Having a support contract means when my network administrator is trying to get the database back up, he can be on the line with someone else who is an expert in that field and can help provide immediate feedback. Rather than my guy doing it alone, or second guessing things, he can work together with someone who knows what to look for.

And generally, the support provided will be cheaper than getting the same level of support from an employee. I don't need a full time MySQL system administrator on my staff. But when something goes wrong (with MySQL, or something that affects MySQL), I have that level of insurance.

Yes, I can call someone up. Not to place blame, but to solve the problem.
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