We talk a lot about so called free and open source software (F/OSS). The free is well defined by R. Stallman: “When we call software “free,” we mean that it respects the users’ essential freedoms: the freedom to run it, to study and change it, and to redistribute copies with or without changes. This is a matter of freedom, not price, so think of “free speech,” not “free beer.” And the OSI has the detailed definition what the open character of open source software consists of. Some enterprise aspects of it are discussed in our white paper The Growth of Open Source Software in Organizations.
So, how do you make money on F/OSS? While for open source this question has been addressed in many of our white papers, the free character is discussed more often, as it excludes some of the more obvious options of commercial open source and services on free and open software. Chris Anderson, author of “The Long Tail“, has been publishing a couple of articles on the four ways to make money with free:
Free! Why $0.00 Is the Future of Business
Revised: the *four* kinds of FREE
He is defining four ways of free:
Free 1: Paid products subsidizing free products (Gmail)
Free 2: Paying later subsidizing free now (your ink jet printer)
Free 3: Premium/Freemium (5 bucks for Flickr pro)
Free 4: Gift economy (people give things away for non-quantifiable reward)
I like the visualizations which are similar to what we often flip chart when explaining web 2.0 business models. Look out for his new book “free”.
Another not directly quantifiable impact of free is quoted on the article Businesses Can Win the Competition Against Open-Source Technology:
“Ultimately, from the point of view of the buyer, free products provide an important benefit. “Even if consumers do not end up adopting the free product, it can act as a credible threat to the commercial firm, forcing it to both lower prices and invest more in product innovation,” …
Did I mention our enterprise open source directory recently?
Tags:
business,
business model,
free beer,
free speech,
open source,
Web 2.0