Finding a Viable Open Source Business Model - The SOFA Statistics Experience (so far)

A new business is like a shortwave radio. You have to fiddle patiently with all the dials until you get the reception you want

How Hard Could It Be?: Start-up Static

All donations US$10 and over permit the donor to display the “Friend of SOFA” logo on their website, presentations, etc

One year subscription US$50 (discounted to $40 till 31 March 2011)

1. Guaranteed priority support: priority response to email queries, usually within 48 hours.
2. One bonus theme.
3. Right to display “Friend of SOFA” logo on your website, presentations, etc
   
4. If you would like to supply your company name, logo and a brief statement saying how you use SOFA or what you like about SOFA, we will randomly display two or three supporters' statements at a time on the SOFA website (subject to our discretion).

Subject: Thanks for supporting SOFA

Hi ...,

Thank you so much for your donation. It is a great encouragement to me and for the project. Please find attached two logos which you are free to use.

And please find attached some bonus themes as a small thank you. The bonus themes go in your css folder under your username e.g. C:\Users\username\sofastats\css. Once you restart SOFA you will see them in a list:

If you have any feedback on the program, or issues you need resolved, please feel free to contact me. There is also a community discussion group at https://sourceforge.net/projects/sofastatistics/.

And if you like SOFA, I would encourage you to vote for it at

https://sourceforge.net/projects/sofastatistics/ (just add a brief review with thumbs up)

or

http://freecode.com/projects/sofa-statistics (thumbs up on right side of page in heartbeat section)

All the best, Grant Paton-Simpson
Lead Developer SOFA Statistics

One year subscription US$75 (discounted to $50 till 31 March 2011)

1. Guaranteed priority support: priority response to email queries, usually within 48 hours.
2. Two bonus themes.
3. Right to display “Friend of SOFA” or “Powered by SOFA” logo on your website, presentations, etc
   
   
4. If you would like to supply your company name, logo and a brief statement saying how you use SOFA or what you like about SOFA, we will randomly display two or three supporters' statements at a time on the SOFA website (subject to our discretion).
5. Priority consideration for requested improvements or developments in SOFA.
6. Initial advice on commercial customization and integration (up to one hour total - any further work charged by the hour).

1. Give the users something in return for contact details.
2. Bundle offerings into a single subscription and have several price points so people willing to pay more can
3. Focus the sales follow-up (errr … actually have some sales follow-up) on users most likely to need support.
4. Identify blockages to buying subscriptions and target them specifically.
5. Profit!

Lessons from Leaders: How JBoss did it

SOFA Statistics is completely free and you can use it without restriction on as many machines as you like. The application is released under the open source AGPL3 licence.

The main ways you can support the project are by:

• spreading the word
• letting us know if you strike any problems
• helping other users in the community (http://groups.google.com/group/sofastatistics)

Another great way of supporting us is by purchasing our very affordable commercial support package for only US$50/year. In addition to support, you receive other benefits for free, such as extra chart/report table themes.

And if there are particular features you need that are not currently available, we can always discuss the possibility of a commission payment to have them developed, or to have them developed more quickly.

Selling peace of mind and safety (plus themes and company promotion/pride).

• Initial price US$50/year
• 4 attractive chart/report table themes for free as a thank you
• Your company logo/photo, website link, and endorsement quote displayed (on random basis) on main SOFA Statistics website. Display a couple plus a “Your logo here”
  
• Guaranteed priority support from creators of SOFA Statistics
  • We understand the code so we can solve your problem
  • We can add any fixes or modifications into the mainstream product so you can stay up-to-date
• High priority when deciding on new features/bugs to fix etc
• The peace of mind knowing that your support guarantees SOFA Statistics a strong future

Acquia sells simplification and quality assurance and official/authentic status.

Another interesting example of commercial success around a "pure" 
FOSS project is Drupal, originally developed about 10 years ago as 
the centerpiece of Dries Buytaert's Ph.D. research. About two years ago, 
Acquia was started to provide a supported distribution of Drupal with 
commercial support and now hosting for Drupal projects (drupalgardens). 
With so many themes and modules being developed for Drupal, many of which 
are free, we are now seeing new Drupal distros spring up, in much the 
same way that Linux distros sprung up in the 1990's. The various distros 
package a "trusted" collection of modules and themes, which work across 
all community and commercial versions of a specific version of Drupal, 
e.g.,Drupal 6.x. The recent Drupalcon in San Francisco had about 3000 
registrants, hundreds of sessions, and about 20 vendors of Drupal training 
and professional services. The registration fee averaged about $200, 
so that added up to some significant revenue, along with some very 
substantial expenses from holding the event in Moscone Center, the same 
place that Oracle holds their OpenWorld event with 40,000 attendees.

Even with all of this commercial activity, anyone can go to drupal.org, 
freely download the community edition with any desired modules and themes, 
and participate as a member of the Drupal community, contributing to the 
project in many different ways. 

http://news.slashdot.org/comments.pl?sid=1640754&cid=32090680

Aquia Run by Drupal founder. Because of large community which itself profits from Drupal, has to avoid appearance of blatant competition with that community FAQ - Does Acquia compete with developers and consultants for web development projects?.

Being the founder (and chief developer) gives you a unique selling proposition

Aim different messages at different audiences:

Moodle sells “official” status to partner businesses

Those officially listed as a Moodle Partner, contribute ten per cent of sales to continue
the progress of the Moodle project. Moodle founder and lead developer Martin Dougiamas is 
the Managing Director of Moodle Pty Ltd, located in Perth, Australia. The company currently 
employs 15 staff members, including eight developers. 

Moodle: The free learning platform

Selling convenience.

Make it much easier to run automated scripts.

"When talking to the user base, I've found there are two types of users. Those that like to get 
their hands dirty, writing scripts, make modules. Nothing commercial would make them happy. 
If we continue adding features, but not [turn Metasploit] into a real product, they would be happy."

The second type is one that, for a variety of reasons, would like to make Metasploit easier to use 
and is willing to pay for that. They might be IT folks who are too busy to spend time customizing 
their penetration testing tool; they might lack the development know how; they might be security 
researchers or others in charge of testing tens of thousands of machines that "simply don’t have 
the time to run tools by hand."

Metasploit's HD Moore from (almost) rags to (not quite) riches - Metasploit might become an example of how a fully FOSS project grows up to turn a profit.

We don't guarantee them or otherwise vouch for their work. We only say that we receive 10% from them to feed the source project (see Moodle partner scheme) and promote them on the official SOFA Statistics website.

Better to have partners than no slice of the action.

The message to businesses based on your products must be - don't destroy the upstream ecosystem you rely on. Give something back.

It could even be argued that it is more fair, and better for project longevity, if aggregators and system integrators subcontract to the developers who make the original software in the first place.

I see the aggregation model as a supermarket style business. When I shop at at supermarket, 
I expect that they will take a (small) cut from everything I buy, in return to dealing with 
many suppliers, bringing all the items I want to all to one place for me and providing a car 
park and shopping trolleys. I expect that most of the economic value will go back to the 
companies that produced the products.

OpenLogic and a couple of their competitors have a valid opportunity for a supermarket-style 
business. It's just that they seem to hope that open source, as a new market, allows the 
notion of a supermarket that keeps virtually all the money and doesn't reimburse suppliers. 
That's a destructive model that can't survive in the long term.

There are more sustainable routes to aggregation. A number of global SIs offer support 
contracts to customers that include aggregation services and, in order to provide the quality 
of support enterprise customers need, subcontract to various open source companies. In other 
words, they don't aim to keep all the money for the goods in the supermarket, and they price 
in the provision of real support.

Replies to Nonsense about Open Source

Certainly, only the original developers can guarantee code commits to the core project.

But if you are not a large company, the realistic approach is to gain something from partners rather than get nothing.

Dokuwiki seems to want nothing in return: Professional DokuWiki Support and Consulting

I've got a few friends down here who have built a business around taking online products to market, and basically doing all the sales and marketing that's required - all they need is a product that they can sell, and they work it all based on commission (as opposed to a fee etc up front). 

Donate US$35 or more and you will be identified as a Friend of Eclipse for 1 year. Benefits include:

• Friends of Eclipse Mirror Site - This will allow you to download new versions of Eclipse faster.
• “Friend of Eclipse” logo***

• Listed on site
• Lots of different levels e.g. sponsor, champion, benefactor

http://osuosl.org/friends

From Elizabeth: I also suggest you use the p-s website to plug how you can use and customise SOFA for clients.

• Use the community to lobby on behalf of project awards or funding
• Explicitly think about the Developing World angle

• need to call either North Shore or Manukau - http://www.frst.govt.nz/funding/business/technzpartners
• see http://www.frst.govt.nz/funding/business/technzpartners/sixstep

• University academics might be able to participate using grants from its Fund for Innovation and Excellence in Teaching
• The International Rice Research Institute provided early funding for development of a customised CAST e-book with biological examples that later became the Biometric e-book in CAST.
• The Rockefeller Foundation contributed towards development of the two African CAST e-books that were originally targeted at agriculture students in sub-Saharan Africa.
• Both the UK Met Office and the UK Department for International Development helped to fund a series of e-books for use in courses run by the University of Reading to teach basic statistics to climatologists in Africa.
• The CAST material about design of industrial experiments was developed with funding from Nestlé.
• The World Food Programme funded development of the first chapter of the Official Statistics e-book about Data Presentation.

• Research in Information Technology
• Likes open source which reduces the cost of tertiary education esp library, learning, reducing cost of scholarly activity etc. Might be a fit if framed carefully.
• Gave $100,000 to the Open Polytech to improve Moodle Open Polytechnic receives international award
• Gave $50,000 to the University of Waikato for the Greenstone project within the Third Annual Mellon Awards for Technology Collaboration (see http://matc.mellon.org/press-release). “We understand that the committee was primarily impressed by Greenstone’s impact in the developing world as testified by many users who supported our candidacy online” http://www.greenstone.org/blog/2008-12-23/greenstone-wins-andrew-w-mellon-foundation-matc-award/
• Partner with Waikato Uni. The Foundation probably won't deal with me or my company directly.

• Supported by $1.5 million in funding from the Tertiary Education Commission, The Open Polytechnic project team selected an open source eLearning system, Moodle, and made improvements to it for widespread release. Open Polytechnic receives international award

• FoRST funded WEKA

We could explicitly mention that we are willing to discuss bounties etc with interested parties e.g. $5,000 for the addition of major functionality - perhaps that required by a business integrator making a killing off our product .

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