Open Source – Sustainable development – a synopsis







Nick Allott posted a very large and a detailed blog about Open Source projects.

I summarise it below since I have referred to it often and a summary is useful. The article has a singular purpose: to explore the optimal  shape and structure of a successful open source project.  

 -         The reality of open source projects is that they require significant investment: hundreds of thousands of man hours in many cases. And this investment is in most cases corporately sponsored. Corporates require a return on investment; whether you can see it or not the company investing effort into a collaborative initiative such as an open source project is doing so for financial gain. Moreover, corporates are “compelled” to compete; shareholders expect returns above the market norm.

-         Perhaps now you can see how Open Source can be used offensively. How it is possible to take out a competitor by open sourcing components that may even be upstream from where you and your competitor currently compete.


The four critical dimensions of open source:

In the context of “corporate adoption” there are four critical legal dimensions that need consideration.

What combination of these four elements is more likely to result in a well-resourced, well utilised, successfully long term project.


Inbound license – the contributor’s license and the implications(use of IPR, copyright etc)

Outbound license: The outbound license defines the terms under which the code is made available to 3rd parties.

Governance model: Who controls, meritocracy,

Trademarks and compliance: Also a channel to control.


Open Source Business models:

Can be seen to comprise of two parts:

  1. Above the water motives: different ways of making money directly form open source
  2. Below the water motives: indirect ways of making money from open source


Direct revenue models

To make money from services

To make money from consultancy

To make money from hosted service Nitobi

To make money from license – dual license it

To make money from Upsell: Upselling complimentary software products

To make money from Hardware

To make money from Advertising

But at a general level the critical question is: how are these revenues maintained? What is to stop someone creating a derivative product that removes the advertising hook, and creating their own, diverting the money flow.

Dark commercial strategic motives

To grow ecosystem

To control ecosystem

To Enter Market

To devalue competitions assets (focused)

To remove license costs

To share costs

The original detailed blog HERE