Article 9C1E How to Make Money from Open Source Platforms (Linux.com)

How to Make Money from Open Source Platforms (Linux.com)

by
ris
from LWN.net on (#9C1E)
Over at Linux.com, John Mark Walker examineswhy companies aren't making money on pure open source ventures. "It is not that there is no money in selling open source software, but rather that the business models have shifted. Whereas, under the old proprietary world, a larger percentage of money went to pure software vendors, now that money has spread among a larger spectrum of companies and industries; lots of people get paid to work on or with open source software, but an increasing number of them don't work for software vendors, per se. In addition to looking in all the wrong places, the current investment model is suspicious of an open source approach. The vast majority of venture capitalists, especially in Silicon Valley, are very risk averse and shy away from open source products that, in their view, will not give as large a return on their investment. In order to secure the funding required to scale a company, investors will frequently require that the startup company include proprietary bits as tools to increase revenue and margins. These two factors - diffusion of revenue and risk-averse investors - combine to both give a false impression and, in part due to the false impression, prevent pure open source software vendors from getting funding."
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