Making Money from Open Source
March 26, 2010
The interest in open source search continues to power walk forward. If you want to know how one open source vendor makes money, you will want to read “How Red Hat Made Money in 2010.” Although the write up focuses on Red Hat, the big momma of open source money makers, the lessons may influence the way some open source search vendors shape their revenue models. The angle is to offer a range of for fee services. Who buys? The answer to this question is:
Another key area targeted by Red Hat over the last year has been going after free Linux users in a free-to-paid conversion program. Moving users from free to paid is an initiative that Whitehurst [Red Hat executive] first discussed in Red Hat’s third-quarter fiscal 2009 earnings call as a key initiative for growth in Linux. Over the course of fiscal 2010, Whitehurst said that Red Hat saw good results from its conversion program during every quarter.
and
“In general, the key for us is to catch people as they are moving from Unix to Linux rather than having them move to Windows,” Whitehurst said. “So while certainly actual migrations are important, the bigger strategic field of battle and part of our mainstream adoption effort is to make sure when people move mainstream customers from Unix they are moving to Linux and not to Windows.”
No wonder Oracle is returning the the Dark Ages of enterprise software. Lock those customers in and brutalize them with surcharges for going off the reservation. Contentious times ahead I believe.
Stephen E Arnold, March 26, 2010
No one paid me to write this. The last time I visited with an open source executive, I had to pay for the iced tea. I will report this to the Department of Commerce where free tea does not exist.
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