I think what a lot of people are missing is to do the backwards induction from where companies predict how things will go back to the present where they develop open source software and release it.
Previously, the belief was that you'd open source the software and then sell support since you knew the code the best (even though it's open source, the knowledge in the brains of the developers working on the code was not open, and you could extract value by leveraging that knowledge). That's the RedHat model and... well it's pretty dead. No startups today are predicting that will be the profitability scenario for their company since the paragon of the model, RedHat, had to sell themselves to IBM.
The next profitability model was open core, where you open source the main thing and sell integrated services and closed source enterprise features, etc. This model was more promising but it is squashed by companies like Amazon, or even other startups who can wait to see which open source products win, and then compete on those services etc. The main difficulty here is that open core isn't "commoditizing your complement" it's commoditizing your main thing and then being left with nice-to-haves as your business.
So a startup today has to look at this future and decide "open or closed source?" and if they look down the open source future and see no profitability, they just... never take that path. People are looking at companies switching their licenses today and saying it's greed, etc, but the difference is that those open source products exist at all due to a company building it. In the future, without an answer to open source profitability, there just won't be any companies producing open source software.
Open source software might still come from:
* bigcos with extra cash around commoditizing their complements: open sourcing non-core pieces for the purposes of competitive advantage. (e.g. kubernetes and bazel)
* hobbyists building things they personally enjoy working on. This usually precludes solving gnarly inelegant problem spaces like terraform (keep up with all cloud APIs in near real time... at night after your real job!). It also tends to mean there's no particular plan for maintenance or support. I love hobbyist open source, it's wonderful, but there are definitely things it consistently doesn't do well.
>That's the RedHat model and... well it's pretty dead. No startups today are predicting that will be the profitability scenario for their company since the paragon of the model, RedHat, had to sell themselves to IBM.
RedHat had $3 billion in gross revenue ($434 million net) in 2018 before the IBM acquisition and that was UP 15% from the previous year.
They didn't have to sell themselves. They chose to.
Previously, the belief was that you'd open source the software and then sell support since you knew the code the best (even though it's open source, the knowledge in the brains of the developers working on the code was not open, and you could extract value by leveraging that knowledge). That's the RedHat model and... well it's pretty dead. No startups today are predicting that will be the profitability scenario for their company since the paragon of the model, RedHat, had to sell themselves to IBM.
The next profitability model was open core, where you open source the main thing and sell integrated services and closed source enterprise features, etc. This model was more promising but it is squashed by companies like Amazon, or even other startups who can wait to see which open source products win, and then compete on those services etc. The main difficulty here is that open core isn't "commoditizing your complement" it's commoditizing your main thing and then being left with nice-to-haves as your business.
So a startup today has to look at this future and decide "open or closed source?" and if they look down the open source future and see no profitability, they just... never take that path. People are looking at companies switching their licenses today and saying it's greed, etc, but the difference is that those open source products exist at all due to a company building it. In the future, without an answer to open source profitability, there just won't be any companies producing open source software.
Open source software might still come from:
* bigcos with extra cash around commoditizing their complements: open sourcing non-core pieces for the purposes of competitive advantage. (e.g. kubernetes and bazel)
* hobbyists building things they personally enjoy working on. This usually precludes solving gnarly inelegant problem spaces like terraform (keep up with all cloud APIs in near real time... at night after your real job!). It also tends to mean there's no particular plan for maintenance or support. I love hobbyist open source, it's wonderful, but there are definitely things it consistently doesn't do well.