Making money from open-source
March 29th, 2006One the questions I’m often asked about open-source software is whether it’s possible to make a living from it. It may sound illogical, but many companies have found it’s possible to develop very successful businesses around open-source (and I don’t just mean computer giant IBM‘s USD 16 billion Linux business). Every day I answer requests from companies doing just that, and who want to use OpenOffice.org logos etc. in connection with their businesses.
Take the case of a small business supplying IT solutions to local companies. Typically, their clients will have a fixed budget they are prepared to spend on a system. If half of the budget goes on proprietary software, then that doesn’t leave very much for the supplier. However, if the supplier uses open-source software, then they can devote a lot more of the budget to support, training, and yes, a higher profit margin.
The net result of this is a much better result for the client. Paying for commodity software – Microsoft Office, Microsoft Windows, Microsoft Access etc – does not buy a company any competitive advantage. They are just getting the same as their competitors. The value-add comes from the services their supplier builds on top – how well they enable their client to use the software to meet the needs of their individual business.
These thoughts were triggered by a press release I received today from a publishing house:
World’s First Textbooks on OpenOffice.org Published
An increasing number of schools in the U.S. and worldwide are using and teaching OpenOffice.org, a free, open-source suite of word processing, presentation, spreadsheet, and database programs. To serve these schools, Visibooks has published the first series of textbooks that help students learn OpenOffice.org programs.
Another company doing good business from open source, and another indicator of OpenOffice.org moving into the mainstream.