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3. business models.html
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<!DOCTYPE html>
<html>
<head>
<title>LINGI2401 - 3. Business Models</title>
<meta charset="utf-8">
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<body>
<textarea id="source">
class: center, middle
# LINGI 2401 : Open Source strategy for software development
Lionel Dricot
@ploum - @[email protected]
???
---
class: center, middle
# One thing you learned from last week
???
Everybody should have a different one
---
class: center, middle
#Create a software
- Name?
- Use?
- Target users?
- Selling point?
- Distribution model?
- Business model?
???
Choose your license accordingly. Proprietary licenses are fine.
Take into account the initial developement time and the maintenance, including new versions.
---
class: center, middle
#Critics
- Would you buy it?
- What would competitor do to surpass you?
- What would users do to get it?
- What's the main weakness?
- What's your unique selling proposition?
???
https://en.wikipedia.org/wiki/Unique_selling_proposition
---
class: center, middle
#Every solution is good and bad
- You will have to adapt
- You need to reconsider your business model regularly
---
class: center, middle
???
https://en.wikipedia.org/wiki/Business_Model_Canvas
Example with fictive cost (50k$/developer, etc)
---
class: center, middle
#Money
- The main metric in our society
???
If someone has money, we consider that he is good/smart.
---
class: center, middle
#The metric paradox
"Every system using a given metric as a measure of success will optimise itself to maximise that metric while becoming less and less efficient to solve the problem for which the system was initially conceived."
???
Green car/red car analogy
---
class: center, middle
#Corollary
"Every organisation that needs money will have a strong tendancy to maximise money without consideration for anything else."
???
Ethics always come in second. It means that ethics will be considered only as long as it doesn't cost any money.
---
class: center, middle
#Raising money?
- Angel investing
- Seed funding, Series A, series B (Venture Capital)
???
Story of startup that raised money.
---
class: center, middle
#Investors
- Investors expect returns on their investments
- Raising money is not a business model
- What are you selling?
---
class: center, middle
#Exit
- ROI: return on investment
- Usually through acquisition
- Also through IPO (rare)
---
class: center, middle
#How to make money while making free software ?
---
class: center, middle
#Your software becomes free
- What license(s)?
- What business model?
---
class: center, middle
#Critics
- Would you buy it?
- What would competitor do to surpass you?
- What would users do to get it?
- What's the main weakness?
---
class: center, middle
*"Open Source software is not free. Somebody else payed for it."*
Tobias Koppers
---
class: center, middle
#Ideas
???
Next slides with ideas
---
class: center, middle
#Ideas
- Subscriptions for support/bugfixes/critical updates
- Consultancy
- Related SaaS subscriptions
- Goodies (t-shirts, mugs,…)
- Proprietary features
- Donations
- …
???
See the Wikipedia page : https://en.wikipedia.org/wiki/Business_models_for_open-source_software
---
class: center, middle
# Red Hat
- Created in 93. Stock Exchange in 99.
- Subscriptions for RHEL
- Community edition : Fedora
- Free fork of RHEL : CentOS
- 10.000 employees, 2.5 billions $ of revenues.
---
class: center, middle
#Odoo
See November 5th
---
class: center, middle
# JBoss
- Bought by Red Hat
- J2EE server
- So complicated to use that consultancy was necessary
- Now known as WildFly
---
class: center, middle
#Caldera Linux - SCO
- Said that every Linux users should buy a license from them.
- Faced an alliance including IBM, Novell, Red Hat (2002)
---
class: center, middle
# Mandrake/Mandriva
- Started in 98
- Very popular Linux distribution (user friendly)
- User club
- Filled for bankruptcy in 2010
- Still exists as Mageia, community drivent project
- Founder of Mandrake, Gael Duval, now funded Eelo.
---
class: center, middle
#Ubuntu
- Having a billionnaire investor
- Tried many approach for monetization
- Still not profitable AFAIK
???
sending CDs, flying developers from around the world, including in his private jet.
---
class: center, middle
#Firefox
- Initially code from Netscape under NPL (98 to 03)
- Mozilla Foundation (non-profit) owns Mozilla Corporation
- Partnerships for search queries
- Money is coming mainly from Google (85-90%)
- Rest is Yahoo, ebay, Bing, …
???
Surveillance capitalism and VC funding.
In 2018, Google paid 8 billions to Apple to stay the default search engine on Iphone
---
class: center, middle
#React.js - Angular
- Opensourced by Facebook - Google
- Because it's not their main business
---
class: center, middle
#Nokia and N770/N800/N810
- Created a swarm of open-source companies
- Collabora : diversified on GStreamer and now LibreOffice
- Immendio/Lanedo : diversified on Samsung R&D and LibreOffice
---
class: center, middle
#Advertising
- But most advertising today is mainly surveillance capitalism
- Some tentative to make advertising more ethical (uTip)
???
Often seen on Android
https://medium.com/open-collective/using-ads-to-sustain-open-source-d048b75d4979
Users are selling data about themselves without really understanding the value. (remember the 8 billions of google to Apple).
From an ethical POV, this is rarely seen as compatible with free software ethics.
---
class: center, middle
#Ads are not free!
- You are paying them more than what you imagine
---
class: center, middle
#Surveillance Capitalism
- Money spent by consumers is the new metric
(and not the money earned by a company)
---
class: center, middle
#Crowdfunding
- Diaspora* : 200.000$ on Kickstarter in 2010
---
class: center, middle
#Wikipedia, Framasoft
- Donations only
- Patreon, Tipeee, Flattr, Liberapay, OpenCollective
???
The donation business model can be creatively exploited. The Sublime text editor, for example, use an "infinite trial version" to encourage you to buy a definitive version. The author (myself), on his blog, use the term "free price" which has been popularized as "prix libre".
Many donation platforms have appeared: Patreon and Tipeee, for monthly recurring donations, Flattr, very original but currently evolving, Liberapay for weekly recurring donation with a special focus on free software or Open Collective.
#Donations?
- Free price (pun intended)
- PWYW (popularised by Amanda Palmer)
- Contribution en conscience (milieux altermondaliste)
- Prix libre
---
class: center, middle
#Community driven project
- The project doesn't earn money
- Some contributors might be paid by external companies
- At some point, a non-profit will be needed to manage the project
- The non-profit will need money to hire dedicated employees
- See the metric paradox
---
class: center, middle
#What if money was the project itself?
---
class: center, middle
#Bitcoin
2007 - Satoshi Nakamoto
---
class: center, middle
#ICO
- Initial Coin Offering
- Mostly for blockchain related projects
- Makes sense only if a token makes sense in the project
- Currently overused
- Will probably replace completely traditional investment rounds
---
class: center, middle
#Conclusion
- Always ask the question "If I'm not paying for it, who is paying?"
- Today, the challenge seems to be very similar for proprietary software
---
class: center, middle
# Discussion time
</textarea>
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