FLOSS Weekly 760: Making Money In Open Source - Adam Jacob, Chef & System Initiative
Dec 6, 2023
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Adam Jacob, an open source expert, talks about making money in open source. He discusses pricing out value, the early days of tech nerdism, and the challenges of running open source software. He explains the usage of Chef and the System Initiative, and the shift to a high fidelity model in open source software. Adam Jacob also explores the impact and challenges of building on open source technology for innovation, monetizing open source software, and the importance of recognizing the true value of open source.
Open source software has transformed enterprise operations, fostering collaboration and deeper relationships with vendors based on collaboration and understanding of source code.
Monetizing open-core software presents challenges in balancing community contributions, enterprise demands, and a sustainable business model.
Open source drives innovation by enabling collaboration, learning, and the building of technology solutions that suit individual needs.
Deep dives
System Initiative: A New Approach to DevOps Workflow
System Initiative, led by CEO Adam Jacob, aims to revolutionize the DevOps workflow by rethinking how people work and building a new technology to enable more efficient collaboration and seamless deployment. The company focuses on a visual interface that operates on a high-fidelity model of infrastructure assets, allowing users to build simulations and generate code. The goal is to provide an order of magnitude improvement over existing tools, enabling faster and more flexible deployment. System Initiative follows the open-source model, with all code being open-source and venture-backed. Early adoption is primarily targeted towards the deeply nerdy user base, who can harness the technology's potential.
The Impact of Open Source on Business Relationships
Open source software has greatly influenced and transformed how companies operate, particularly in the enterprise space. Large enterprises now see open source as a product they buy, leading to deeper relationships with vendors based on collaboration and the ability to understand and build upon the source code. This relationship allows for more innovative technology solutions and a collaborative approach to problem-solving. The impact of open source on enterprise relationships has also led to a distinction between customers who treat open source software as a product and a larger community who leverages the software for free. This dynamic can have both positive and negative effects on the long tail of open source adoption.
Monetization Challenges in Open Source: Lessons from Chef
Adam Jacob reflects on the monetization challenges faced by Chef, an open-source configuration management tool. Chef explored various monetization strategies, including a hosted SAS service, an enterprise version of the software, and premium features through the Chef Automate platform. However, finding the right balance between open-source offerings and monetized features proved challenging. The case of a large enterprise customer choosing Chef but refusing to pay for additional enterprise features highlights the complexities of monetizing open-core software. Balancing community contributions, enterprise demands, and maintaining a sustainable business model remains an ongoing struggle.
The Transformation of Technology Shifts with Open Source
Adam Jacob discusses the transformation of industries into technology companies and the role that open source plays in driving innovation. Companies are now embracing technology and using open source as a powerful engine for innovation. Open source software enables collaboration, learning, and the building of technology solutions that suit individual needs. The ability to build on top of existing open-source software fosters an environment of continuous innovation. While the impact of open source may be difficult to measure quantitatively, its transformative influence on companies, relationships with vendors, and the ability to create technology-driven solutions is evident.
Importance of Open Source in Business Models
The speaker discusses the importance of open source in business models. They highlight how changing their business model to have 100% open source software, while still offering commercial terms for certain assets, led to significant revenue growth. The speaker emphasizes that having a strong open source community can benefit both the company and the users.
Monetizing Open Source Software
The speaker talks about the struggle to find a sustainable and thriving business model in the open source world. They share their regrets about not starting with a model like Red Hat's, where core software is free and additional services and support are monetized. The speaker believes that being transparent about the need to monetize the software and the value of the company's expertise is crucial for the success of an open source business.
Adam Jacob talks with Doc Searls and Shawn Powers about making money in open source, based on his long experience with Chef, System Initiative, and other development communities that are also businesses.
