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Jack Bridger

Open source business strategies

published3 months ago
2 min read

After an interesting discussion with Lars - founder of P42 - about the pros and cons of open source, I've been binge-reading on open source business models.

In Profiting from Open Source - a HBR article from 2000, HP justify their involvement in open source:

  • Expand the market for its products & services
  • Reduce cost of development, marketing and delivering of services
  • Halo effect from open source involvement

Additionally, open source can help startups to:

  • Be adopted by enterprise companies more easily
  • Engage with a community of potential customers/employees

In this DevTools world, it can be tempting to simplify things to:

open source = good.

But, open source comes in many shapes, sizes and business models. And it comes with risks.

There is a great lecture on Commercial Open Source Business Strategies with GitLab CEO Sid Sijbrandij, which I'll paraphrase from below.

Open source vs hyper cloud

"The hyper clouds AWS, Azure and GCP are service-wrapping open source. For every big open source project there is an equivalent on the hyper cloud, and in that case, the open source software makers don't get paid. It's the hyper cloud that gets all the revenue."

So these open source projects retaliated by introducing a non-compete licence for AWS etc.

In response, "Amazon said, "We're going to fork and commoditize Elasticsearch. We're going to take your code that's open source, we're going to fork it, and we're going to try to make all the features that you have as proprietary features, we're going to try to make them open source." That's a big risk for every commercial open source company going forward."

Model-based open core vs buyer-based open core:

Model based open core - split open source & proprietary where it's easiest to split.

Buyer based open core - splitting features into tiers based on persona who would like them. I.e. individual developer features are open source, manager features are proprietary. This is what GitLab do. E.g. Pull Requests are in Open Core and approvals are a proprietary service

Below is how GitLab have incorporated a buyer based open core strategy (as of Sept 2019):

If you have know of resources to learn more, please let me know.

Kuba Czakon - CMO at Neptune.ai

Kuba has led Neptune an MLOps startup to 2 million views on their blog and series A funding.

Here are some of the my takeaways:

  • Never try to persuade developers, instead educate, enable and inspire!
  • Be where your audience is
  • Developers are builders, give them time and space to explore
  • Multiple CTAs can work

Listen to the full episode here

Kuba also runs a developer marketing slack community which I'm a part of - check it out.

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