How to make money with Open Source

In the thread referenced above, Jeff Liebermann says:

I kept asking the same question: "How am I suppose to make money with Linux"? and getting no intelligible answers.

He points this out as an indication of the mistakes and bad decisions that brought SCO to the point where (Jeff again)

I'm not sure it could have been avoided. I firmly believe that SCO would have done a Chapter 11 last year were it not for the stock price jump, investments, and licensing.

Jeff may well be right. SCO made a lot of bad choices, and until this very year, did nothing to try to recover from their foolishness in trying to kill their own best product. As Jeff said

Meanwhile, OpenDesktop was selling and supporting the company. Enormous efforts were expended in arm twisting users to switch from ODT to Open Unix (Unixware). ODT continued to outsell Open Unix. So, they switch to shoving them in the direction of Caldera Linux. That didn't work for a long list of reasons that I don't wanna get diverted discussing. Eventually, Caldera got the clue, changed the name back to SCO, redirected additional development efforts toward what was bringing in the revenue, and hoped for the best. It was the right move, but far too late. The attempts to kill off ODT had finally succeeded, more by neglect than intent, and projections looked dismal.

Yet other people say you can make money with Open Source. SCO absolutely could have taken existing Open Source projects, ported them to OSR5, bundled them into useful applications and services, and thereby given the world a reason to buy its OS. What they never saw that they were in a far sweeter position than RedHat or anyone else trying to push a strictly Linux based solution.

Apps made SCO successful once. Open Source apps, where most of the work has already been done by someone else, are a wonderful opportunity. There has been very little integration of Open Source programs into "application suites" - packaged mail servers, web servers, whatever. What integration that has been done has been on Linux (and perhaps BSD) as the base OS. But what stops you from doing it on your own OS? Well, most of us don't have our own OS, do we? Sun does, HP does, and so does SCO, but it's a pretty small crowd.

Build a great integrated app on OSR5 and you have bait for the OS you want to sell. The app can be 100% Open Source, and the beautiful part is that you can tie its performance strongly to your own proprietary OS, thereby making it more difficult for anyone to take your work and put it back on Linux. The quirkiness of your OS now becomes an asset, not a liability. Just as it is difficult now to compile many Linux apps on SCO, it would be difficult for Linux people to back-port the SCO modifications! Naturally, you'd write your code with just that in mind: maximize for the strengths you have, obfuscate wherever you can, and build a package that works better on your OS than it does elsewhere. Yes, someone else CAN perhaps take your work and bring it back to Linux, but remember that you have profit coming from the OS sales, and they don't. The best they can hope for is to sell support, and you can sell that in addition to the price you charge for the OS! You should have more money for development, so you should be able to stay far ahead of the people using Linux.

What it takes, of course, is imagination and effort. SCO has a fledging Mail Server now. That's the right idea, but it should have been built with Open Source components and everything developed in-house donated right back - of course stuffed with calls to their proprietary Unix kernel. Nothing in the GPL says that you have to make it easy for your code to compile on another OS - you don't even have to provide a Make file for any other OS - as anyone who has ported Linux apps to SCO well knows.

There is the necessity here that you do it better than your competitors. As http://www.sys-con.com/java/46131.cfm says, you need an "editorial style" that makes folks want your version. If you can't do that, at least well enough to attract whatever base you need, then you lose. But if you can do it, your proprietary OS suddenly becomes an asset again. The bundled apps are the razor, the OS is the blades.

It's probably too late now. And the nay-sayers will pout that existing SCO installations would take advantage of the free apps without paying anything. Of course they would, and that would be good for business, because it would jump start your customer base and also keep upgrades coming down the line. If the product is good, other customers would come, and for the first time in many years SCO might see entirely new sales sources.

If I had been in charge of SCO, this is the path I would have taken. I might still have failed - Jeff could be right - but I would have gone out with honor and pride.

This is the direction Sun and HP need to take. Strangely, it's also something Microsoft could do, with even more success than anyone else. That's an awful thought, isn't it?

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