White Knights and Open Source business models

by Matthew Langham

Last week, I spoke about the way we "do" Open Source at the Open Source workshop of a large German consulting company. After my talk, another - more product oriented - company spoke and constantly referred to us (somewhat jokingly) as the "white knights" of Open Source - and was sceptical as to how we are actually able to make a business model from the way we do things.


So, let me explain our philosophy. When we (a mid-sized German software company) started thinking about Open Source back in 1999, we thought long and hard about how we could use Open Source in our day-to-day projects and yet at the same time retain a good relationship with the community. For a company that was - to that point - 100% a build-custom-solutions-for-customers-and-get-paid firm, this was quite a revolutionary idea.


And yet I was able to convince my boss that "cherry-picking" Open Source solutions would only help us in the short-term and not in the long-term. So from the beginning we got involved with the community. This wasn't easy in the beginning - because the community itself was sceptical about our interests and the company was sceptical as to whether this would really work. It took a couple of years for us to actually find the correct balance between what we had to do (i.e. earn money) and what we wanted to do (i.e. support the communities). We had to learn how the communities function, what was expected of us, how we could help and we had to understand that - as a company - you need to give up (to some extent) your initial business interests to become commercially successful with Open Source.


Now, this probably sounds stupid, so let me elaborate. As a company we are prepared to invest a portion of time so that members of my team can work on the Open Source project - without there being a specific customer project in the background. They basically help other people (perhaps even competitors) fix bugs or get going with the Open Source solution. Doing so actually helps us to find new customers and extend our business reach using Open Source.


Giving up our own interests has actually proved to be more commercially rewarding than we expected. "Getting" Open Source is not easy - especially for a commercially oriented software company - and it doesn't happen overnight. To be called the "white knights" of Open Source is actually very flattering. Because it shows that many other companies don't yet understand the revolution that is happening around them.


2 Comments

steltenpower
2004-06-30 16:28:47
open source for entrepreneurs
something i wrote
fdomke
2005-11-30 09:13:29
Six Different Open Source Ecosystems
One needs to ’buy’ the ecosystem that supports the software. In order to help enterprises understand those ecosystems, Business Integration Technology has identified six basic open source business models: the “Lite” version of a commercial product, enterprise vendors embrace of open source to show “I’m Open”, the spin-off of commercial “Legacy” products into open source, the dual strategy of free and supported “Parallel Universes,” the “Jump Start” opening of an un-launched commercial product, and true open source “Community” projects.


You may find our white paper on this topic interesting:


http://BusinessIntegrationTechnology.com/PDF/OpenSourceBusinessModels.pdf