Money from FOSS-projects

Question

What, if any, are the most popular ways to get some money from a FOSS-project?

I see that many projects ask for donations, and some of the larger ones do get a decent amount of donations. But how about the smaller ones? Is it really realistic that, assuming you have a small userbase, once you put a "please donate" badge somewhere, the change start dropping in?

Or, is it more of an anomality that you get any money out of your pet projects, and should assume that you will never get any monetary compensation out of a FOSS-project, unless you're doing something "everyone" uses?

Have any one of you done something similar, and got some cash out of it?

Yes, I know, FOSS is, by definition, a poor money maker. I'm just interested, if there's any chances to even get a self-sustaining coffee-budget. Feel free to consider this more of a higher-level question than trouble-shooting a specific problem.

Answer 1

Make hardware which uses FOSS software, and sell it. There are dozens of examples on the market of people doing this.

And not to sound elitist here, but the products like this that tend to do better in this regard are those which promote the cool-factor of the gadget itself, rather than the open-source software it's running. Sometimes, depending on the nature of the hardware, this is definitely the case, but most people aren't interested in it. At any rate, in my experience, this is the most direct way to earn money using FOSS software.

Answer 2

There are several models for doing this.

• Dual license: this model has the code released under two licenses (or more). One will be a commercial license. The other tends to be a restrictive open source license (most commonly GPL because it's viral). Personally I think this is a poor model because you can't really take community contributions (at a source code level) like you can with a project that's purely open source. It really combines the worst of both worlds;
• Commercial Support: this is more common on projects like MySQL, Glassfish and the like. The idea is that you can use the particular product for free but what you're paying for is support (and typically indemnity). The problem with this model is that the number of people willing to take their chances on the unsupported version greatly outweighs those that aren't. Like the previous model you tend to no longer have community development;
• Commercial Documentation: this is a variation upon commercial support. The software is free to use and you have limited documentation. You can get really good documentation if you're preapred to pay for it. JasperReports is like this. I kinda like this model because the documentation tends to be cheaper than the lowest commercial support option.
• Donations: probably the least money maker but also the least intrusive. I think people mainly use this on projects they've made a significant time investment in as a way of defraying the cost;
• Modularization: for this one the basic software might be free the software will allow modules to be developed without having to make them open source and then you simply sell some really good modules. This is perhaps the best model I can think of because you still get community development of the core product without engendering any sort of ill-will. You're basically on a level playing field with other module developers (well, slightly better off).

Answer 3

I don't think FOSS is per definition a poor money maker. Classically, the motivation has been more "scratch an itch" than "make some money".

I think it really depends on what kind of project you're sitting on. Richard Hipp apparently does well with sqlite offering commercial support. You don't hear about them, but a lot of other small projects make money with a dual licensing strategy.

The assumption there is that your project is relevant to and used by companies. Which would rule out projects like window managers and ncurses bittorrent clients. :)

I can say first-hand that donate buttons don't really do much good in the vast majority of cases. I remember the campaign to free blender worked well with voluntary donation, but then that is high visibility and wasn't exactly the rule.

There's material gain to be made from working on free software, but it is often very roundabout. Building a portfolio of credibility and experience, honing technical skills which elevate your asking price, scratching an itch your company has thereby making you more valuable, etc. Just because it's indirect doesn't make it any less financially tangible, just more difficult to trace cause to effect.

If on the other hand you're the lead maintainer for a high profile enterprise-friendly project like, say, couchdb or hadoop and you're looking at paypal donation buttons, then my cluebat wants a word with you :)

Answer 4

This depends a lot on what the software is about. If you are offering FOSS software for larger horizontal markets, you are more likely to generate revenue from enterprises that see this software as an alternative to high-priced commercial offerings (if it's good).

It also depends on you positioning yourself: You might license your software open source and try to make customers depend upon you or you might make it an option to hire you or someone else for extending it.

There has been a good interview in the javaposse podcast with Jonathan Schwartz (CEO at Sun) a while back (November 2005) about Suns OpenSource strategy. He has some great insights on how to make money giving stuff away for free.

Another example within the not-so-well-known projects is Liferay Portal Server, offered by Liferay Inc. Until last September (I have no data since then) they have been steadily growing to ~75 employees worldwide (if I remember correctly) - all organic and self-funded. The portal is MIT-licensed, to they have provided maximum freedom for their users, yet (despite or due to this) they are making good money on implementing, customizing and improving their product. Of course, there are some very-high-priced competitors that are easily trumped by the 0 € (or 0 $) license price tag.

Of course it's easier to name the working examples than to repeat that success, but it might give some insight about the direction to go.

Finally one last thought: There have been quite some people that have been hired to continue their work on their product because the company hiring them gained a lot more influence in a product that they were already using in the first place.

You might also point to projects that you are involved in in your cv or unrelated job interviews.

Answer 5

The two models I like for sustaining open source are Liferay Enterprise Portal and OWASP. Liferay does it via professional services while OWASP has corporate sponsorship as well as donation buttons for individual contributors.

Answer 6

I've released several and been paid rather well over the years to modify them. The trick is getting them noticed, I highly recommend Ohloh.

Free / Open source software by definition is most decidedly not a poor money maker. If you can write good, useful portable code and manage other programmers agreeably, there is no reason why you can not make money.

Part of managing means quickly going from "well, what do you think" to "well, this is what we're going to do and here's why .." While flying solo, make sure your commit logs are tailored for an audience that you have yet to meet. Blog major change ideas a week (or at least a few days) from committing them. Go a year without breaking the interface that (maybe, someone somewhere) is using .. and keep at it , regularly.

Overnight success happens in very rare cases. Keep at it as if you had thousands of users. After all, you do expect that you will, yes?