[HN Gopher] Selling open-source software
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Selling open-source software
Author : webmaven
Score : 139 points
Date : 2023-08-15 13:58 UTC (9 hours ago)
(HTM) web link (thenewstack.io)
(TXT) w3m dump (thenewstack.io)
| datadrivenangel wrote:
| The gem of a quote at the end captures good sales technique
| perfectly: "It's literally saying, What is it you're trying to
| achieve, and by when? And yes, I can help you do that."
| [deleted]
| zkirby wrote:
| As the founder of an OSS company (granted we're seed stage), moat
| is becoming more and more of a concern, especially because: 1.
| There are more saas companies (read: competition) than ever 2. AI
| has made it significantly easier to build on-the-fly
| transpilation
|
| Didn't see that mentioned in the article, but it's worth noting
| omeze wrote:
| The truth is that people who are fine operating and managing
| their own ElasticSearch/Postgres/Spark whatever cluster are not
| the people who will be buying the SaaS offering. Theres no point
| trying to convert those people, theyll convert themselves once
| they get tired of constantly upgrading and maintaining a non-
| differentiated piece of their business, or they'll just be happy
| users who bring your tech stack to their next gig, where the buy
| vs self-host choice gets revisited.
|
| The main problem is that many teams think they're "that guy (or
| girl)" who can manage a complicated piece of infra as a small
| team and will be saving money. If you spend 10% of your time
| doing devops work, you spend 10% less time on your actual product
| (you might as well be binging netflix). A majority of these teams
| convert (IME) to a hosted offering once the right price and SLAs
| and DevExp are there. The only part of your sales pitch that
| matters to these teams is "this isnt worth your time to self host
| when we have a great offering thats cheaper and faster to get
| setup". If you have a logo from a big co that has the talent to
| self host but are buying your product, then your work is done.
| aatd86 wrote:
| Aren't there businesses for which self-hosting save far more
| money?
|
| Infra is often a financial decision as much as technical.
|
| (reminds me of basecamp exiting the cloud but I know nothing
| more than that)
| dgb23 wrote:
| Yes. There are plenty of examples of going down the
| abstraction stack and saving money among other things.
|
| I believe the question is really high level and strategic and
| there's no one size fits all.
| icelancer wrote:
| Yes. After factoring in labor, our $XXmm company saves low-
| mid six figures per year by self-hosting the majority of our
| infra.
| candiddevmike wrote:
| Truthfully I think you'll find with a thorough review of most
| SaaS SLAs that they are more expensive than the toil they say
| they replace. Otherwise how would the company make money?
| It's still engineers doing X work. There really aren't that
| many opportunities for economies of scale with enterprise
| SaaS when you have SLAs and data sovereignty unless you're
| cutting corners.
| j45 wrote:
| Saving money can be one consideration.
|
| Not having the amount of expertise or hours on hand to
| support it can be another. Shadow labour costs can add up
| pretty quick and some orgs like offsetting that to the vendor
| to not overload their people.
|
| Another consideration is how much the tech aligns with your
| core business. Just because you need it doesn't mean you
| should build or run a ticketing system.
|
| Too often there is a lot of SharePoint whiplash and problem
| "solutions" that grew out of control.
|
| Large orgs don't always behave rationally and pragmatically
| when there is self preservation or politics at play instead
| of being effective at your work.
| heipei wrote:
| Every discussion around subscribing to a SaaS vs. operating it
| is always reduced to costs on HN. There is another, more
| critical aspect to why we (and many others) operate their own
| infrastructure, run their own servers, operate their own
| Elasticsearch clusters: Keeping ownership of customer data for
| business continuity and compliance purposes.
| mgkimsal wrote:
| You can enforce your own SLAs, manage your own downtime,
| avoid versions changing under your feet, avoid UI changes to
| critical apps... It _is_ a cost, but it 's also a necessary
| cost to provide the experience you want to deliver to your
| clients.
| fidotron wrote:
| Are we completely ignoring the technical impact of using a SaaS
| that is likely in a whole other data centre to everything else?
|
| It is very easy to destroy response latency by pinging loads of
| messages around when they should be colocated in one place.
|
| This is one of the reasons AWS services are so sticky compared
| to everyone else.
| wmf wrote:
| It's not in a different data center; it's in us-east-1.
| j45 wrote:
| Good explanation.
|
| There will be companies who prefer to self host and those who
| don't, and having an option of paid support or cloud hosted can
| go a long way especially when the open source project can set
| itself up as a first class plugin in the Microsoft cloud.
|
| Many of not most companies are already on Microsoft and it
| ensures a good amount of support for open source so they don't
| have to separate features into different tiers.
|
| One of the more interesting open source setups was a product
| that was licensed both as open spruce and commercial, and the
| customer (often government or education) would have a policy of
| commercial only or open source only and they could support it
| both ways.
| throttlebody wrote:
| Doing your own, requires you to gain knowledge in that area and
| in my view expanding your knowledge base is really important.
| It's not all about immediate possible financial gain. Obviously
| there's a line somewhere
| JohnMakin wrote:
| A few problems with your comment -
|
| 1. 10% of your time doing devops work isn't necessarily a waste
| - if 10% of that time is cheaper than enterprise offerings,
| then this is probably worth the resources, unless you are very
| short on talent.
|
| 2. You have an assumption laden in this comment that SaaS
| products eliminate the need for spending time on "devops work."
| It can greatly reduce that time, but IME even administrating a
| SaaS product can come with a ton work - look at EKS, a
| "managed" kubernetes cluster, but often requires a lot of
| kubernetes know-how to properly configure and maintain.
| omeze wrote:
| Both your counterpoints are true, I didnt want to sprinkle
| the word "marginal cost" everywhere (marginal devops cost of
| buy vs self host). And ofc I agree, not all saas offerings
| are the same, EKS is fairly meh as far as setup and time
| savings.
| jxf wrote:
| > 1. 10% of your time doing devops work isn't necessarily a
| waste - if 10% of that time is cheaper than enterprise
| offerings, then this is probably worth the resources, unless
| you are very short on talent.
|
| That's not the right calculation for revenue-generating
| products (IME). The right calculation is: if your product got
| this 10% instead of you doing DevOps work, is the additional
| long-term revenue higher than the cost of the enterprise
| offering?
| candiddevmike wrote:
| What is the X% of your product you're willing to outsource?
| What % of margin are you willing to give up for that
| capability? Because the hope/dream of every parasitic SaaS
| is to grow with their customers...
| j45 wrote:
| Let's be honest, dev ops can be more than 10% when there's no
| consistent way to tie in every open source project into an
| environment.
|
| SSO helps, but it can still be work to roll out.
| ncrmro wrote:
| 3. Managed solutions usually aren't as configurable.
| paulddraper wrote:
| E.g. plugins
| debarshri wrote:
| One of the key learning lately, selling software to
| developers/engineers in general has been that the positioning of
| the product should be such that - it is either too boring for
| engineers to care about the problem statement or too technically
| different to even attempt to solve it. If it falls in the middle,
| you will find developer resistance or value dilutation and it
| becomes super hard to make engineering teams adopt the product.
|
| Secondly, opensourcing is distribution strategy. Like any other
| GTM, you have to consider the fact that people who are using your
| product almost 90+% will not buy the software. They will use it,
| but they won't pay for it. You have to have an outbound sales
| motion that reaches out to people, send linkedin messages, asking
| them to do PoC. Thing is, if the opensource product is popular,
| the end user receiving the message might have a high product
| recall value.
| asow92 wrote:
| A few years ago (pre IBM acquisition) a friend of mine at Goldman
| Sachs said that Red Hat was the greatest company in the world
| because they "sold free software".
| chefandy wrote:
| This article mentioned building an app "that people love," but
| didn't specifically mention one critical factor customers use in
| evaluating software: usability and design. Get subject matter
| expertise on your team before building the user-facing parts of
| your product. Engineering teams _know_ that they 're not good at
| marketing or sales, but don't usually realize how much _winging-
| it_ with design scares away users.
| tomhallett wrote:
| Are there any good examples on "source available" startups, where
| the software can be run on-prem, can be easily modified/forked by
| the customer, but has a commerical license? (Thinking docker
| desktop style: free for companies with less than X customers,
| monthly flat license for > X employees)
| extragood wrote:
| I think n8n qualifies. Also TrueNAS
| EGreg wrote:
| I actually just recorded a show about that exact topic today:
| https://youtu.be/5Doiuvct7t0
| pydry wrote:
| Elastic
| jononor wrote:
| Grafana is basically that now?
| gdprrrr wrote:
| Sonarsource (Sonarqube)
| shaburn wrote:
| Very compelling arguement for closed source.
| generalizations wrote:
| I'd be interested if you elaborated. Open source is definitely
| a tough starting point, though sometimes it can have some
| competitive advantages.
| yu3zhou4 wrote:
| I'm building a marketplace to help devs sell the open source
| software. Would you consider putting your open source for sale on
| such platform? Why/why not? What would it take to help you make
| this decision?
| convolvatron wrote:
| maybe you could elaborate a little how that works? selling open
| source software - it doesn't have to be an oxymoron, but making
| that work isn't straightforward
| yu3zhou4 wrote:
| Sure, happy to share more:
|
| Config:
|
| 1. You set up an account on the marketplace - sign up, then
| connect it to Stripe through the marketplace and decide which
| software you want to sell (about 15 minutes in total)
|
| 2. Copy-paste a new license to your repositories - You
| relicense your software to use a slightly modified version of
| MIT license, which requires commercial entities to pay for
| your software (5 minutes or so)
|
| That's all for config, now your part is done and the rest of
| work is on buyer's and marketplace's side.
|
| You of course remain owner of your software, you don't move
| any rights to marketplace or users, except the license for
| usage, just like you do it now with MIT/GPL/whatever license
| you use right now. Marketplace is only to connect you with
| buyers and give you centralized place to sell with automated
| infrastructure, so you don't process payments, signups, etc.
| by yourself
|
| Selling:
|
| If a company wants to use your software, they need to pay a
| monthly/yearly fee - you choose how much you charge
|
| License:
|
| You can customize the license if you want - you can choose
| whether you allow free usage for non-
| commercial/scientific/charity purposes and you can also set
| some other feature flags, so you have a control over how your
| software is used
|
| And that's basically it
|
| There's an MVP on https://poss.market if you would like to
| check if that even makes sense to you. Thanks and please let
| me know what do you think if you made it to this point. I
| still figure this out and your feedback is invaluable to me!
| cmitsakis wrote:
| I've seen something similar in https://indiecc.com/
| gervwyk wrote:
| I like this. I've always been wondering why something like
| this does not exist.
| riyakhanna1983 wrote:
| Many have attempted to offer services that allow
| developers to "sell their FOSS projects". Unfortunately,
| no successful model has emerged so far.
| tcmart14 wrote:
| There are different variations of a similar idea. The
| implementation suggested here though, isn't my favorite
| since a modification in the license shouldn't really be
| necessary. And, lost of FOSS projects out there can't
| just simply relicense. So far, the best implementation
| I've seen is specific to Elementary OS in their distro
| software center. You can donate to projects directly via
| the store.
| kjok wrote:
| I truly believe that open-source developers can gain
| financial independence by selling supply-chain security.
| Disclaimer: I'm exploring this idea.
| aleph_minus_one wrote:
| > 2. Copy-paste a new license to your repositories - You
| relicense your software to use a slightly modified version
| of MIT license, which requires commercial entities to pay
| for your software (5 minutes or so)
|
| Then the software is not open source anymore, i.e. the
| claim that one sells open source software is fraudulent.
|
| Side remark: In the past Microsoft attempted to establish
| the term "shared source" for software where you can see the
| source code, but which is not open source.
| yu3zhou4 wrote:
| Thanks for the remark. On the marketplace I call it "paid
| open source software", so I guess I could be more
| specific in original comment, sorry for unclearness from
| my side
| pessimizer wrote:
| 1) Simply don't call it "open source software." Making up
| new definitions for open source is more harmful to it
| than anything else could be. There's nothing to open
| source except licensing.
|
| 2) The usual way to do this is to AGPL your software (or
| be even stricter), and sell it by _relicensing it_ for
| businesses who pay you so they can use it how they wish.
| You don 't have to make up a new "non-commercial open
| source" license to do this.
|
| edit: It feels like OSS people are haphazardly stumbling
| through the thought processes that lead to the GPL in the
| first place. Once you've made an open source license that
| doesn't allow people to make money using the software,
| does it matter whether they share their changes or not
| when they distribute?
|
| What's motivating people to reserve the right not to
| share changes in the software they distribute for free,
| other than to maintain a now _enforced as worthless_ (by
| this particular license and similar variants) distinction
| from the GPL?
| doesnt_know wrote:
| The established term is "source available" specifically
| because it's not open source.
| aleph_minus_one wrote:
| > On the marketplace I call it "paid open source
| software"
|
| This is still wrong (and likely again fraudulent, but
| IANAL), since the software is _not_ open source if there
| are such usage restrictions. Call it, for example, "paid
| sofware with source available" ("source available" is
| another common term for software for which one can see
| the source code, but which is not open source).
| nonethewiser wrote:
| > the claim that one sells open source software is
| fraudulent
|
| Fraud requires intent to deceive. Your conclusion seems
| very alarmist and unfair.
| pessimizer wrote:
| The rules about open source aren't mysterious or hidden,
| and anyone who has spent time rewriting the MIT license
| and creating a marketplace for open source software is
| either familiar with them or incompetent.
| orliesaurus wrote:
| how do you enforce any of this?
| yu3zhou4 wrote:
| Difficult to enforce externally I think, except when an
| employee of a company shares an infringement with the
| marketplace or the creator
|
| My assumption: the reason serious companies will pay is
| that they don't want to make silly mistakes like license
| infringement for which they can be sued. If they want to
| use your lib/tool/etc, because it will speed up their
| development or help they make money in any other way,
| they will choose to pay you these $100 per year. If you
| gain a few (dozens, hundreds, thousands) clients like
| this, you're able to build a solid source of income, and
| since they buy a license on a subscription basis, it's
| likely you will keep the clients for the next year
| convolvatron wrote:
| so, you're in the middle here in order to rewrite my
| license text and process payments.
| yu3zhou4 wrote:
| Basically, yes for now. Also your software becomes
| visible on the marketplace and you can have a single
| point of sale on your profile at the marketplace
|
| There are further plans, but I'm still trying to get some
| funding/help to have a time to continue development
| crop_rotation wrote:
| Sometimes I feel like most of these Open Source SAAS businesses
| were also only possible in the 0 interest rate era. If your
| product is open source then you are competing purely on service
| offerings, and it will be very hard to compete on support alone,
| since you have by default higher costs due to maintaining the
| software itself. Redhat is the exception that proves the rule,
| and even they are trying to get as less open as possible.
|
| Case in point, it would be very hard for Elastic to develop
| Elasticsearch and then compete with Cloud providers purely on
| hosting quality and price. Opensearch seems to receive very very
| few new features compared to ES, and will have features that will
| not be opensource, like all the hot and cold storage stuff.
| tcmart14 wrote:
| I agree and disagree at the same time. If your just providing
| the open source software, yes. Where Red Hat and other kind of
| kick this rule is by providing the open source software + some
| more (which may or may not be open source). This can also be
| support. But I look at something like Tailscale, even though it
| is still young, it looks pretty promising to me. They provide
| wireguard, but the magic is their tools and interfaces on top
| of it. So it seems like, you have a good shot at doing open
| source SAAS, but you also need to provide something like, a
| better and simplified interface. Which is sometimes all you
| need. Tons of great FOSS software out there, but a lot of them
| are not great at user friendliness.
| [deleted]
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