Been an interesting day today and not just because the market is down or maybe it will be up by days end? The Boston metro area temp is approaching 60 degrees on the 1st day of December. That's a little unusual. But what's really unusual are a few articles in the Business Week online magazine where one author (Rachael King) wrote an article entitled "Open Source: A Silver Lining in the Economic Slum" while Stuart Cohen publishes an article entitled "Open Source: The Model Is Broken". The good news, a fair and balanced set of articles around the open source space.
In his article Cohen states the following:
"Companies have long hoped to make money from this freely available software by charging customers for support and add-on features. Some have succeeded. Many others have failed or will falter, and their ranks may swell as the economy worsens. This will require many to adopt a new mindset, viewing open source more as a means than an end in itself."
My opinion is that commercial software companies also have ups and downs including some very famous failures as you can imagine. So why just call out open source companies? Also, since when is open source a business model? Business Models have been around forever. Think about the business models of Walmart, McDonalds, Amazon, eBay. In Kings article, she points out the following:
JasperSoft is thriving as other vendors struggle because it provides software at a lower price than competitors. In fact, JasperSoft supplies the basic software for free, making money by selling support services or additional features. Its annual fees can be as much as 85% to 90% lower than its competitors. "We're seeing more interest from companies looking to replace an older software product they can no longer afford," says Chief Executive Officer Gentile.
JasperSoft is a software company that is supported by a business model pointed out in the paragraph above. It's up to the CEO, in this case Brian Gentile and his executive team to come up with the appropriate business model to drive profit and return to its investors and employees. Clearly they have a business model that is working. They claim that they had record breaking revenues in Q3. Their software is open source not their business model.