It's very hard to make money from free software Re: [Fsuk-manchester] RMS on Swedish Pirate Party vs Free Software

[green h]

... this is interesting. This last branch of posts has focused on one small, but important, part of software freedoms.

 

I went to a talk about free software last year and this point came up over an over again.: "How do I earn money from free software?". As far as I could tell no satisfactory answer was ever given.

 

Tim earns money from using tools to design/create useful things (eg websites), implementation and administration.

 

Red Hat seems to make its money from support, implementation and admin too.

 

It's becoming clear to me that the question might be too broad (as in "What's the meaning of life?" - great question but it means a different thing to just about every individual, so can't be answered satisfactorily), so asking a more specific question might be helpful.

 

One such question might be "How do I run a commercial business that creates free software products?". If the answer is "... by selling services to support and modify them", that's fine for some who are providing services for existing products but not for others who want to create new products as the effort (and investment) put into creating them in the first place needs to be balanced by income, within a sensible timescale.

 

For example, if the investment is many people years before a viable product is available to be implemented and, hence, used as a vehicle to sell services, the services income must be able to recoup this (historical) investment as well as cover (current) R&D, admin etc and still leave enough to pay a good rate to the technical people (development and customer facing service delivery) who are doing the work that brings the money in. However, service rates are pegged to a market expectation of a fairly low hourly/daily rate so it's not a great financial model on which to base a business. The traditional way to get around this has been to sell the software to increase earnings.

 

What's a realistic alternative?

 

Cheers, Des

 

 

----- Original Message -----

From: Tim Dobson

To: Pater Mann

Cc: address@hidden

Sent: Thursday, July 30, 2009 9:44 AM

Subject: Re: [Fsuk-manchester] RMS on Swedish Pirate Party vs Free Software

Pater Mann wrote:
> The simple fact is that it is very hard to make money from free
> software.

Teehee. Not in my experience.

Things I've done in the last five years:

* Webdesign a couple of years back:

Zencart for a site wanting a shop
Wordpress for a band wanting a website

* System administration of virtualised webhosting cluster
Xen, centos & debian used.
Usually install Apache, PHP, MySQL for the developers to play with
sensible-editor also recommended for editing config files

* Improving systems for company who install PBX systems
Asterisk used for PBX running on Ubuntu 8.04
Zimbra mail accounts resold
Request Tracker, SugarCRM, Mediawiki, Nagios etc. used internally
(we have written *another* Asterisk UI which we will shortly be
releasing as free software and we are paid to write new features into it)

So for the small guy trying to make money from IT in a land where large
companies rule, things are looking good.

And larger operrations like Red Hat aren't finding things *that* tough;
http://www.reuters.com/article/AIRDEF/idUSN2421958220090624

"Software company Red Hat Inc (RHT.N) reported a 7 percent rise in
quarterly profit onWednesday[sic], bucking an industry trend of
declining earnings, as margins widened under the scrutiny of its
cost-conscious CEO." (24th June 09)

Cheers,

Tim


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