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Open Core and OSI
Sunday, July 04 2010 @ 08:55 PM EDT

Simon Phipps is correct: Open Core is Bad for You, the "you" here being you and me, end users:
The open core model exploits open source and is a game on software freedom. The fact the game is played does not invalidate software freedom, but it suggests we need to revisit definitions and make the game harder to play.

Open core is a game on rather than a valid expression of software freedom, because it does not cultivate software freedom for the software user.

Mark Radcliff worries that the anti-open core position will scare away VC investment. So be it. But here's my question: what is OSI's position in this debate? With both men associated with OSI, it's getting confusing.

Note Mark's acknowledgment about OSI and the GPL:
Simon says that open core does not provide software freedom for “end users”. Yet, nothing prevents the end users of the open source version to modify it and distribute it or otherwise exercise the rights under the license. In fact, Compiere demonstrates the fallacy of this position because it created two different forks. Simon complains about the lack of access to the “commercial extensions” of open core programs. However, as Marten Mickos notes, the effect on the end user of the employment of the Apache license is the same as the open core model: commercial extensions are not made available to the community.

I agree with Matt Aslett that the open core model does not violate the Open Source Definition, either literally or in spirit (please note that this position is a personal one and does not reflect the view of the OSI which has not yet taken a position on this issue). Simon appears to be suggesting that only a “copyleft” approach in which all of the software must be available under an open source license to meet the Open Source Definition, which is simply incorrect (the Open Source Definition was a reaction to the limitations imposed by the copyleft approach).

Is Mark suggesting that OSI intended to facilitate less freedom for the code and end users than the GPL offers, that this was an OSI goal, that "software freedom for the software user" isn't and never was an OSI goal? Does freedom mean only the right to fork the code? If so, I'd like OSI to say so clearly and on the record. If so, it might provide insight into why OSI is struggling and provide indisputable proof that they were foundationally wrong. I hope they'll weigh in on this debate and plant their flag, because if that is what OSI stands for, maybe it's time to let them float out into outer space without the community, thus making it clear there really is no connection between the real FOSS community and OSI any more.

If that is not what OSI stands for, I'd like to hear them say so. I hope it isn't. But the community wants to know where they stand, and for what.

For myself, I believe that OSI, in order to be relevant, needs to reinvent itself and restructure to represent the entire community with its license list and its definition. Enough with the old divisions and the debates. The community needs to face the world more unitedly now, as a broad spectrum, including those who had the foresight to realize that VC guys and proprietary types would be coming along someday and would try to close down the freedom of the code and the freedoms of those using it just to make a buck.

Not every license needs to be the GPL, obviously, but if the world has gotten the idea that *less freedom* for end users is the goal of OSI, then OSI needs to respond. If open core is the OSI goal now, tell us. If that's where OSI wants to plant its flag, then it's time for someone else to maintain the list of approved licenses.

Or, alternatively, revamp, and seriously consider the licenses approved on the list and even more so the licenses approved going forward, rewriting the Open Source Definition to keep the wolves out of the chicken coop. OSI needs to make clear what the point of Open Source is. Its foundational corporate documents say its goal is to protect Open Source. What exactly does that mean in 2010? It's time to get explicit. Or it's time for the approved list of licenses to move somewhere that does reflect the entire community and not just one insular point of view. Otherwise, OSI will inevitably undermine the community.

If any VC guys can't grasp all this, they need to get out of this space. They'll just ruin everything, and they'll even lose money because of acting like bulls in the china shop. Their departure won't leave a big hole forever, and in time more clueful VC money will replace them.

Mark doesn't see it that way:

Most venture capitalists will not invest in companies that do not use the open core model, so if the open source community leaders are successful in demonizing the open core model, they will decrease the willingness of venture capitalists to invest in open source companies (just a reminder, that a recent book, Mastering the VC Game, recently noted that venture capitalists typically look at 300 companies for each company in which they invest). Although not all open source projects need venture capital support, venture capitalists have been a significant source of support for open source projects (as well as new software made available under open source licenses) and end users have been the beneficiaries of their investment. If the open core model is no longer considered open source, the biggest losers will be the end users; they will lose the opportunity to benefit from that investment and that is certainly not consistent with the goals of open source.
The community doesn't need VCs that don't understand FOSS better than this suggests. They aren't investing in open source communities if their influence results in closing down the openness. That's called exploiting the open source community. It's not the same thing. And if faced with a choice of VC money or openness and freedom, the community as a whole isn't going to choose money. It just isn't, although some individuals might do so.

Compiere did so. It gave in to VC pressure to go open core, and now look at it. To me it's Exhibit A on how VC backing can ruin your project if they don't understand FOSS values and principles. As Jorg Janke himself says, "I think that the Commercial Open Source model is still valid, but Compiere overstepped the balance between proprietary and open product components." I note that Brian Prentice at Gartner is advising clients to look at what open core means for them:

Open Core, if you’re not aware, is being pushed by many start up companies as a new approach to delivering products combining open source and proprietary software. There may be others nodding in agreement that this in fact a dazzling new business model. Regardless of the way that vendor struts, you should trust your instincts. You’ll soon realize that the fabric making up the garb of their stated innovation is a fabrication. They’ll then be exposed for exactly who they are – a good old fashion software vendor. Just like every other one you’ve come to know.

The open-core emperor has no clothes.

Let’s keep in mind that when we start talking about business models, what matters is not how a vendor generates incremental revenue but how you generate incremental value. In order to understand whether that’s going to happen or not we should start with the foundation of the open-core model – the distinction between a full-feature proprietary version and a free, open-source functional subset of that offering.

Now, if this sounds familiar to you then you’d be correct. That’s called “freemium” in the consumer world. In the corporate market, attempting to broaden the appeal of a software solution by parring back the functional footprint into a low cost alternative has been a staple mid-market strategy of enterprise software companies for over a decade.

It's hardly surprising that VC investment would look for incremental revenue, but they need to keep in mind that while Open Core benefits them, or at least they so imagine, it's not providing value to anyone else. Éric Barroca's Business of open source: my take on "open core":
I think a lot about business models leveraging open source as it’s what makes our business run and I’m deeply convinced that "open core" is fundamentally flawed. This conviction has been formed by real world observations: running a real business for several years now. ...

With an open core model, you have to exclude/remove features (hence value) from the open source software to in order to preserve your business: you could be forced to even limit innovation in the open source branch because it could damage your business. It does not leverage any benefits that should be derived from the open nature of the code — which is the very core aspect of open source. It only leverage free distribution not the open aspect of the source code.

You really can't expect to be a success in the Open Source space if you take advantage of your upstream providers and thwart their hopes and purpose in writing the code in the first place and provide no value to anyone but yourself. That's not a business plan the community will support. Even Steve Ballmer gets it that you can't be successful without developers, developers, developers. And as for subtracting value from end users, why would we end users want that? End users means companies too. So if that is what you want to do, do it, by paying developers to write whatever you need. But why would the community want to help you make money off their work, with nothing in it for them? And instead of worrying about losing VC money, maybe it's time to help VC guys get more up-to-speed on how to work in this space effectively. It surely won't be by reimplementing old, proprietary styles. There is no success with open source without community backing. Period. You can't say that for VC backing.


Open Core and OSI | 234 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here if needed
Authored by: entre on Sunday, July 04 2010 @ 09:06 PM EDT
For PJ

[ Reply to This | # ]

Off Topic Thread
Authored by: Minsk on Sunday, July 04 2010 @ 09:44 PM EDT
Something else on your mind?

[ Reply to This | # ]

News Picks
Authored by: ankylosaurus on Sunday, July 04 2010 @ 09:47 PM EDT
Please include a link to the original article since news picks shuffle off the
front page of Groklaw fairly swiftly.

The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

OSS DBs and Open Core
Authored by: GreenDuck on Sunday, July 04 2010 @ 10:10 PM EDT
For those that are not familiar with it, Postgres is
released under a BSD licence and the fully open source
version is pretty good. Two companies I am familiar with
package up Postgres and add some features: Enterprise DB
targets the enterprise market with Postgres Plus with the
most visible feature being the addition of PL/SQL support
while Greenplum targets the Data Warehousing and analytics

Now, I don't know why Enterprise DB and Greenplum operate as
an open core rather than a fully open source model like
MySQL AB did. Perhaps it is something to do with MySQL
being GPL while Postgres is BSD.

Overall I believe the model works well in this case. Users
that want to use Free (or free) software can install the BSD
version and get a very good RDBMS. Users that want the
extra features can shell out a small amount of money.

If Postgres was a GPL product then EnterpriseDB and
Greenplum would be unable to sell their software under this
model (it would breach the GPL). Would they still exist?
Would someone else have implemented PL/SQL support in
Postgres so you could use it without paying money? I don't
know. I guess this is the key question.

Another feature missing from the GPL'ed MySQL and the stock
BSD version of Postgres is support for analytic cubes. Both
databases have this feature available as a paid add-on, in
MySQL's case it is provided by Mondrain OLAP while Postgres
provides it through Greenplum. So it seems people wanting
OLAP are out of luck if they're looking for Free or free,
but the feature is available for both databases via open-
core licensing.

A big shift in the RDBMS world is the shift to column
orientated data storage, which has a number of impacts - it
significantly reduces the need for OLAP and it virtually
eliminates the requirement for composite indices but at the
same time it slows down access to a single record (the most
common query in an OLTP system). Neither Postgres or MySQL
support it out of the box but MySQL's liberal engine
licencing means it is available for MySQL based again on the
open core model (Postgres's licensing is liberal across the
board and again Greenplum support this feature). Could you
really imagine a company building and selling an entire open
source DB just to obtain extra revenue from customers
looking for column orientated storage?

I guess the key question is why is Postgres a more powerful
database than MySQL? Is it because the base code is better
and so more research has been done on it? Or is it because
the base code is BSD and so more companies have been willing
to add extensions.

PS: I hesitated about using the term more powerful in this
post, I didn't want to discuss the relative merits of
Postgres and MySQL unless it is necessary to investigate the
effects of Open Core licencing.

[ Reply to This | # ]

Open Core not inherently bad...just iffy
Authored by: Tyro on Sunday, July 04 2010 @ 10:31 PM EDT
Open Core isn't an inherently bad model...but it does raise a warning flag.
Depending on what the "Open Core" is, and what it's promised to be,
the model can easily turn into "bait and switch".

I've seen some good Open Core models. I've also been bitten a couple of times.
Now I'm very suspicious of any such offerings, and examine them quite

But it is true that some companies have been doing a decent Open Core business
for quite a long time. It's also true that when a budget crunch occurs, there's
a strong tendency to turn it into bait and switch. These days unless the open
part is under an irrevocable license (just about only GPL) I don't even look at
Open Core offerings. There's just too much chance of it turning into a hook
with bait on it.

[ Reply to This | # ]

Open Core = Open Sore
Authored by: kawabago on Sunday, July 04 2010 @ 10:32 PM EDT
nuff said.

[ Reply to This | # ]

For anyone else wondering "what's Open Core ?"
Authored by: vortex on Sunday, July 04 2010 @ 11:52 PM EDT

I started reading and had no idea what "Open Core" meant. For the sake of anyone else in the dark, now that I've googled: it's a collective term for the kind of dual-license where the supplier makes a limited product available under an Open Source license, in parallel with a fuller proprietary product off which the supplier makes its living. The term seems to date from 2008.

Finally – the SCO group saga's end game.
Break out the pop-corn, sit back and watch the fire-works.

[ Reply to This | # ]

Sounds Familiar?
Authored by: sproggit on Monday, July 05 2010 @ 01:34 AM EDT
So what, in practical terms, is the difference between "Open Core" and
"Embrace, Extend, Extinguish?"

Isn't OC just taking the E3 model and applying it to entire software packages
instead of open standards?

[ Reply to This | # ]

Authored by: Anonymous on Monday, July 05 2010 @ 01:43 AM EDT
This post makes it clear that the overall goal is and should be freedom.
However, on more than one occasion it is suggested that the means of protecting
that freedom should be to withold it from a select group (to keep the wolves out
of the chicken coop).

This is the inherent contradiction at the heart of the anti-open core position
that will prevent this argument from ever reaching a conclusion, in my opinion.

The other issue is that the OSD is only concerned with the underlying license,
not the business strategy used in conjunction with that software. Additionally,
the OSI has no authority over the term "open source", other than in
relation to the policing of OSI-approved licenses.

[ Reply to This | # ]

Open Core and OSI
Authored by: Anonymous on Monday, July 05 2010 @ 03:07 AM EDT
Anon posted this in corrections where it shouldn't be so I will reply here
Why, yes, OSI has always been less Free Authored by: Anonymous on Monday, July 05 2010 @ 12:51 AM EDT Wikipedia tells the story and matches my recollection: OSI was formed specifically to distance "open source" from Free software in hopes of making businesses more comfortable using it, and if they didn't have Open Core in particular in mind as one such use that's probably because no one had thought of playing that game yet in 1998. I would be deeply surprised if OSI officially said anything even slightly disapproving of Open Core.

There were several different people with different views at the start of open source. Eric S. Raymond has always been about some silly trip to prove that Open Source is more macho (because it's the best development methodology or something..). It's not a coincidence that he came out later saying that the GPL is no longer needed and seems to be actively working against things which guarantee user freedom. At the same time Bruce Perens seems to have been completely committed to user freedom but trying to get away from some of RMSs less than perfect marketing. Note that Bruce later said that Open Source was a mistake.

OSI is still important because it was the origin of the term Open Source and that is very widely used and undestood in business. It would be worth trying to get a statement against "Open Core" if nothing else to find out who in OSI is actually commited to Open Source.

[ Reply to This | # ]

Open Core: new name, same old story
Authored by: tknarr on Monday, July 05 2010 @ 03:56 AM EDT

I've heard the Open Core story before. It's always the same: some company looks at the huge pool of incredibly talented developers out there and wants to gain all the benefits of having them work on improving their products but doesn't want to pay them and doesn't want to let anyone else have the fruits of the developer's work without paying that company for them. And this is always doomed. Open Core is another iteration, and it's inevitably doomed. If the license permits contributors to lock their contributions into a free license, the company ends up with desirable features they can't move into the for-pay portion of their software. If that happens often enough, the free branch of their code starts to become more desirable than the for-pay branch. OTOH if the license allows the company to suck up contributions to the free branch and place them only in the for-pay branch, the developers are smart enough to simply not waste their effort when they know it's simply going to be appropriated. Either way, the company isn't going to get what it's looking for. And if it's really unlucky, some developers out there will get annoyed and want that same kind of product enough to start a project along the same lines.

As for venture capital, I'd say that as a businessman I probably don't want the kind of VC that thinks Open Core is a good idea. I want a sustained business that'll keep making money year in and year out, and that sort of VC tends to be out to take advantage and get everything he can Right Now at the expense of any long-term viability. If I get into bed with that kind of VC, I'm going to end up with the company being forced into directions that're bad for the company but good for the VC's pocketbook. Worse yet, even if I manage to get shut of the VC my name's still going to be associated with those shenanigans and I'm going to have a hard time convincing everyone that I've really changed.

If you want to create a business around open-source software, then come up with a business plan that lets you make money around open-source software. RedHat can do it, you can too. And if you can't, then just admit it and go hire and pay developers to create your product and sell it for a fair price, and don't try to pretend you're something you're not.

[ Reply to This | # ]

Is Pion Open Core (in structure if not license)?
Authored by: TiddlyPom on Monday, July 05 2010 @ 04:22 AM EDT
The company I am currently working for have started to make use of Pion which is written by Atomic Labs.
The core part of Pion is open source (GPL Affero) as is the networking library but the main Pion product is closed source.

There is a free version of Pion called Pion Lite but this is the same (closed) code base as the Enterprise product except that the extra features have not been unlocked with a license key.
Pion itself runs (as a preference) under either Red Hat Enterprise Linux or clones such as CentOS although it can also run on Ubuntu, Windows and OS/X. In fact they can also supply a pre-built server called Reactor Core Network Appliance which runs CentOS 5.x.

Pion is built from open source building blocks (such as Boost and Dojo Toolkit), encourages the use of Red Hat and is an excellent product but I do have some qualms as the full product is most definitely NOT open source.

Anyone else use this/have come across this and have any thoughts?

Microsoft Software is expensive, bloated, bug-ridden and unnecessary.
Use Open Source Software instead.

[ Reply to This | # ]

Open Core Software: The Billion dollar company
Authored by: Winter on Monday, July 05 2010 @ 05:51 AM EDT

This Open Core stuff is all part of a discussion about the best way to get the next "billion dollar company", see:

It all harks back to a study from last year about the economics of "mixed source" markets. Please refrain from throwing up yet. This is genuine economics research. Whether it is actually based on good sciences and theory is another matter altogether (and a question I am unqualified to answer).

See Mixed Source by Ramon Casadesus-Masanell and Gaston Llanes

We study competitive interaction between profit-maximizing firms that sell software and complementary goods or services. In addition to tactical price competition, we allow firms to compete through business model reconfigurations. We consider three business models: the proprietary model (where all software modules offered by the firm are proprietary), the open source model (where all modules are open source), and the mixed source model (where a few modules are open). When a firm opens one of its modules, users can access and improve the source code. At the same time, however, opening a module sets up an open source (free) competitor. This hampers the firm's ability to capture value. We analyze three competitive situations: monopoly, commercial firm vs. non-profit open source project, and duopoly. We show that: (i) firms may become "more closed" in response to competition from an outside open source project; (ii) firms are more likely to open substitute, rather than complementary, modules to existing open source projects; (iii) when the products of two competing firms are similar in quality, firms differentiate through choosing different business models; and (iv) low-quality firms are generally more prone to opening some of their technologies than firms with high-quality products.
Full paper available HERE.


Some say the sun rises in the east, some say it rises in the west; the truth lies probably somewhere in between.

[ Reply to This | # ]

A practical question
Authored by: Anonymous on Monday, July 05 2010 @ 06:48 AM EDT
How can anyone (presumably developers) have any freedom if users have no

Saying that users have no freedom seems to be another way of saying that there
is no freedom. yes/no?

[ Reply to This | # ]

Open Core is not Open Source (much less freed software)
Authored by: darkonc on Monday, July 05 2010 @ 07:03 AM EDT
Open core is proprietary software, period.

Yes, theres's an Open Source shell that works rather like a trojan horse, trying to worm it's way into companies as a proprietary peace offering, but

If you don't have access and rights to fully use the source to the code that you're using, it's not Open Source -- and carries few (if any) of the advantages of true freed software.

Now, some companies will be fooled by the disguise, (I mean, the Trojans were....), but as people see that the problems with Open Core are the same as the same as with proprietary software, it's unlikely that they'll consider it equivalent to freed software.

Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

Open Core
Authored by: feldegast on Monday, July 05 2010 @ 10:50 AM EDT
Open Core, this sounds too much like:
1. Embrace
2. Extend

And it is just waiting for step 3....What was that third step again? ;-)

My posts are ©2004-2010 and released under the Creative Commons License
Attribution-Noncommercial 2.0
P.J. has permission for commercial use.

[ Reply to This | # ]

Open Core and OSI - A question of balance
Authored by: bwcbwc on Monday, July 05 2010 @ 11:16 AM EDT
I've defended the Apache license on these forums previously, bu the Open Core
model tilts that balance even further away from the open community of developers
that an open product relies upon.

At least with the Apache license, all contributors stand on equal footing. You
have access to the base source code and you can develop whatever you want on top
of it. Open core takes that model and puts restrictions on the developer
community in order to protect the business model of the project host. By not
only keeping back some of the functionality, but by blocking community
development of parallels to "non-core" functionality, it violates the
spirit of the open model.

If they absolutely must protect "non-core" functionality from the
general user community, a fairer threshold would be to provide free commercial
licenses of the "non-core" functionality to developers who contribute
code or other development and test services that are used in the core. Also, if
an external contributor develops an item that is deemed "non-core" the
"open core" license should require a royalty payable to the
contributor, since that element was developed under the assumption it would be
generally available to the community, not isolated in the commercial version.

From a user and developer perspective, neither Apache nor my proposed revisions
to open core are as "open" as any version of the GPL. But not everyone
wants the GPL. What I'm trying to achieve is a balance where the external
development and user communities get benefits from the open project that are in
line with the contributions they make to the project. This means that leechers
are basically stuck with whatever is released under a core version, while
contributors should get something more. Even savvy VC investors get justifiably
annoyed at the leeching that goes on in most OS communities, but if an
organization or person contributes enough effort to the project, the VC folks
need to recognize and reward the value of that contribution to their bottom

[ Reply to This | # ]

  • VC and Leaches - Authored by: Anonymous on Monday, July 05 2010 @ 03:05 PM EDT
This is an Important Topic
Authored by: KayZee on Monday, July 05 2010 @ 03:51 PM EDT
This is an important topic. I didn't know there was a specific name assigned --
open-core -- but I have certainly encountered this for some years already.

I think SugarCRM was the first product I encountered with this model, but there
could have been some before it. There have certainly been projects after it.

I understand Redhat's model. They seem to be doing well charging for support.
Yet the underlaying code remains freely available. Projects like CentOS can
compile and distribute the OS (less Redhat's trademarks) with all the features,
not some subset.

But this open-core stuff troubles me. It appears to me as MBA's and VC's
looking to monitorize something. Get you in for free, but need a specific
feature? Here's the app store and be prepared to pay. And no, you don't get
the code for that paid feature. Its the ability to access and modify the code
that gives us freedom.

The MBA's, VC's, bloggers and any other pundit can argue about the definitions
all they want. Without access to the code and right to modify and distribute it
for all the features, is not free.

I think less of projects using this model and actively look for alternatives.

[ Reply to This | # ]

Open Core and OSI
Authored by: luvr on Monday, July 05 2010 @ 04:27 PM EDT
“It's hardly surprising that VC investment would look for incremental revenue, but they need to keep in mind that while Open Core benefits them, or at least they so imagine, it's not providing value to anyone else.”

But isn't that what VC is all about? They're interested exclusively in what benefits them; they don't care about the rest of us. It's their business model, so to speak.

Having said that, I'm not interested in what I would call “Open Core with a Closed Door”; if I cannot get in anyway, then what difference should it make to me what's inside?

[ Reply to This | # ]

Startup Funding for Open-Source Companies
Authored by: Minsk on Tuesday, July 06 2010 @ 12:53 AM EDT
Since we are on the topic of VCs... What options are available now that would
let a startup company honestly pursue a F/OSS business model?

I took a quick and incomplete look around, but just found things which help fund
incremental improvements to an existing project.

[ Reply to This | # ]

Authored by: Anonymous on Tuesday, July 06 2010 @ 12:33 PM EDT
I realize I don't understand what "open core" is supposed to mean, but
I'm curious to bring up a strawman argument.

MySQL is available in a paid "enterprise" edition from Oracle, just as
it was from Sun when Sun owned MySQL. Part of the payment is for a support
commitment, which is obviously allowed under all conceptions of "open
source" that I know of. I'm looking at the MySQL pages but I can't get a
good idea about what is unique to the Enterprise Edition, but it appears to
include such integral features as "Row-based/Hybrid Replication".

My question is: "Is MySQL an "open core" project? Does it

[ Reply to This | # ]

VC Ruins Everything (every time)
Authored by: BitOBear on Tuesday, July 06 2010 @ 12:51 PM EDT
Cut to Annapolis, MD circa 1996. The company is Touch Technologies, and it has
invented the little touch pad thing you find of every laptop today. The Touch
Mouse is designed to sit next to a PC keyboard and do all the mouse things. The
owner, E. Gary Barrett, hasn't gotten his patent yet because the device
"has to work" and ours hung a lot. (In retrospect I think it worked
plenty-fine for the purpose of getting the patent.)

He needed some money to get the device sales-ready (e.g. working well enough to
get the patent etc).

In come the Vulture Capitalists. Money acquired, things proceed nicely, to the
point that we had a stock components ready for final assembly and shipment etc.
But the hockey stick hadn't shown up, so the VCs raided the company for its
assets and sunk the enterprise like pirates pulling along side a tax ship.

VCs have no sense of what they have. Touch Technologies could have owned a piece
of every laptop ever made. But they are short-sighted little children who want
their lolly right now!

I tend to flee any organization that seeks V.C. and I have yet to be wrong in
doing so.

"Venture Capital" is antithetical to any kind of rational investment
strategy. It invariably contains terms that involve very-short period goals and
clauses that allow rapine and pillage if those goals are not met. Even when they
are, the VCs usually end up with kinds and amounts of "preferred
stock" that make it impossible to make a fair and rational public

Better to fail and starve than take VC. And by the way, if your business plan
makes sense, it will already bee succeeding along lines that make VC style deals
unnecessary. If you find that only VC funds will let you move on, you have made
a strategic mistake. Find and Fix that mistake instead of selling your soul for
no real benefit.

getting VC is like becoming a Microsoft Strategic Partner, all historic evidence
suggests that you cannot win, and likely will not survive doing this.

[ Reply to This | # ]

Some products NEED to be sold
Authored by: Anonymous on Tuesday, July 06 2010 @ 12:59 PM EDT
It's a big world out there and, no matter how clever I am, my new wigit™ connection broker software has to get known by the market. I see a number of options:-

1) I try to sell it as proprietary software
-It's hard to get VC
-No one trusts a 3 man company for such an important application.

2) I open source the core functions but offer paid for management and scalability add-ons.
-VC's understand open-core -I'm more likely to get funding.
-Some users are happy with my core code and utilise it without the add-ons.
-A dedicated sales team has a story to sell the product as -much like code escrow -users are less afraid of code when the source is available
I get a bigger, quicker user base.

3) I go fully open source
-all I can sell is services or support which, if the product is good, no-one needs or wants.
-without a demonstrable revenue stream, VC's won't touch me with a barge-pole.

IMHO open core -provided it's not crippleware does offer a path for an enterprising company to generate revenue in early life.

Most startups now see the exit strategy for VC's as being bought rather than IPO.

PS I can think of 1 horror story that contradicts this argument -Virtual Iron. They offer a Xen based virtualization solution. Oracle brought the technology and canned the customers.

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Open Core and OSI
Authored by: Anonymous on Tuesday, July 13 2010 @ 04:03 PM EDT
So from reading your statement you believe it is impossible for people to be
selfless? That we are only ever capable of being selfish?

So i guess you are in Mark Twain's camp that human's are machines and incapable
of acting selfessly, that we only work through enlightened self interest? So
there is no altruism?

You have a truly cynical view of humanity. One i do not share.

[ Reply to This | # ]

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