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Old 11-19-2005, 08:39 PM   #1
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how do most open source companies make profit?

I was talking to my Dad the other day about the SuSE Linux that I had just installed on my laptop and I was talking about Open Office, Gimp, etc. and he asked me a question that I was not able to really answer. He asked how these open source companies make for a viable business. I would guess that RedHat, SuSE, Mandriva make their money on tech support charges, selling support manual, etc. (am I right on this one?).

What about Open Office, Gimp, and all the others? Are they just the products of volunteers with no real aim toward profit? Are there a lot of businesses supporting these products and if so, what is the reason? Thanks.

Old 11-19-2005, 09:02 PM   #2
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Most Open Source developers are actually volunteers who are working on various FOSS projects in their free time. They are probably people who work as programmers to make a living.

I think most likely they don't get paid directly for making open source, but they get a lot of encouragement not only from the community but also from companies which use and market open source products like IBM, Red Hat and Novell. There are also community based projects like Debian which thrive solely on the dedication and commitment of thousands of contributors and volunteers all over the world. Some of the more valuable projects probably get financial backing and/or donations from corporate as well as individual users (example: KDE), but some projects choose not to receive corporate funding (example: Debian) to keep them from becoming commercialized. The business model is usually:

1. Allow people to download it freely.

2. Sell packaged versions of these software to individuals. You pay for the convenience of getting it packaged in a nice way and saving huge download times and also for the shipping costs. This is done either through centralized or decentralized means (like having local distributors or vendors in different parts of the world).

As for the business model of companies which thrive on FOSS, you're right the first time: they sell support (sometimes varying degrees of support based on the fee they charge) and also for providing convenient packaging of the software.
Old 11-19-2005, 09:24 PM   #3
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Some Companies also release their source code under the GPL, and have a user version of their product, but sell a commercial version as well(MySql). The MySql company sells commercial lisences to companies who want their product.

Other companies(Redhat, Novell, etc.) Sell the packaging and the support for their product.

Many of the OSS projects are based entireley off of volunteer work, hence they don't have any revenue come in, and they don't pay their developers.
Old 11-20-2005, 11:46 PM   #4
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I think tech support, and software packaging.
Old 11-21-2005, 01:22 AM   #5
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I'd imagine that a few projects would receive a reasonable amount of donations. Not enough to make a living off it but enough to pay for hosting etc. I know I donate to software that I use on a daily basis and when I mention that to other linux users I know, I generally get a "Me too! I didn't know anybody else did that" in reply so they do get a little cash that way.
Old 11-21-2005, 03:56 AM   #6
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If all the people the people who used the azureus donated just a dollar to the project, I imagine they'd be well off. I've uploaded so many gigs just with these linux distros. I've got 8 people leeching yoper of me now, even though they'd actually get faster download speeds direct from the site. But shhhh. Don't tell them. I'm gonna increase my upload ratio by godlike proportions.


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