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Many companies going to the opensource route these days. Jetbrains is one example of a company that opensourced their well reknown IntelliJ IDEA after been commercializing it. Some company has started doing opensource right from the beginning and able to compete with the big boys like MySQL, RedHat, and Ext-JS. Some did not succeed at all.

So, is opensourcing your product found effective? Especially from marketing side? Will you be able to attract more customers this way? Or do you have to work harder to get their money because customers prefer freebies or customer will look down on your product because it is free? Has anyone got any experience on this that can be shared? What's your take on this?

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I especially like ExtJS's model: open source for open source, commercial for commercial. You benefit from the open source community but still make a buck from commercial licenses. – Olivier Lalonde Dec 23 '09 at 0:23
Most product company like ExtJS, MySQL and Redhat uses GPL which is basically open source for open source, commercial for commercial. – jpartogi Dec 23 '09 at 2:34
The straight GPL prohibits modifying the code without redistributing it. ExtJS, MySQL and Redhat employ multiple licensing schemes to achieve the "commercial for commercial" half of the equation. – Joe Dec 23 '09 at 16:08
GPL does not allow you to redistribute the software without the source code, you can use GPL products commercially. You cannot embbed GPL software within proprietary software. If you sell some kind of software to be embbeded in another (such as MySQL) dual licensing comes handy. – pdjota Dec 23 '09 at 19:08

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In general, I'd say: No, it's not a good strategy.

In most cases, especially for desktop applications, the disadvantage of being unable to charge a sustainable price for your product outweighs the advantages.

There are some exceptions, however:

  • When you'd like to enter a market with a small number of established and dominant competitors that charge rather high prices. Success stories are MySQL, RedHat, and SugerCRM.

  • When parts of your software are generally useful for others to build upon. Success stories are Ruby on Rails by 37signals or CodeIgniter by EllisLab.

  • When your product is defeated by a competitor and you've already recovered some of your investments. Success stories are OpenOffice.org and Java by Sun.

Note also that "Closed Source vs. Open Source" is a false dilemma: You can also use freeware (or freemium) if redistribution matters to your prospects. You could also ship with source code included but without a license for redistribution if adaptability matters to your prospects.

Hope this helps.

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The 37Signals is a good example: Ruby on Rails is the opensourced product while BaseCamp is the SAAS solution with which they charge customers. – pdjota Dec 23 '09 at 19:13
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+1 for the ideas, but I would go further and point out that the success stories -- while successful! -- are by FAR the exception. How many web frameworks have been open-sourced and no one cares? (Answer: hundreds.) Worse, since you have a FEW users of the framework you feel compelled to help them, tech support, etc., when it's not helping you at all. – Jason Dec 24 '09 at 15:21
Thanks. This example is really good. – jpartogi Dec 24 '09 at 21:45
@ Jason: Good point! I should have written 'examples' instead of success stories. There's probably also an availability heuristic at work when we consider the question of why companies open source: According to a study made by Intel, the third class is by far the most common reason. But I wasn't really able to name examples here. – Claus Schwarm Dec 25 '09 at 11:48
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It depends on your business model: Opensource may empower early-adoption and collaboration but you have to understand clearly how are you going to bill your customer.

I think a key issue is to undersand what is your customer really willing to pay for and how the "freebie" comes in. Usually support or SAAS schemes come handy: customer pays for supported software or access to already set software.

For instance, Redhat provides a supported edition (aka payed) base on the community project Fedora. MYSQL to some extend uses a similar model. Regarding JetBrains it seems that there are two products: the community one and the 'ultimate' which seems to be enhanced.

Is opensourcing your product found effective? Depends on your objectives, if you are looking for collaboration in building a product, maybe yes. If you are going to charge for the exact same product, maybe no. Opensource software may or not be a boost to marketing, I had mild experiences because some customers are biased against it (fortunately those are the less).

Sometimes some of the developer's community (after some years) thinks different from the creators and then they create a new opensource product based on the preceeding. Interesting examples are: SugarCRM, Compiere ERP.

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If it is a platform which is going to need customization by a developer it makes sense. It would not be appropriate for customer base that is not likely to hire a developer (What are they going to do with the code?). Otherwise, you're going to need a reseller who would adapt your code.

I think an application that has an API offers a lot of what would be needed to customize the application.

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