There was an enterprise cloud company I once worked with. They had built a layer on top of HDFS and some nice admin tools to go along with it.
Their customers hired them to build out systems that would provide in-house clouds and their tooling helped make HDFS deployment, management and integration a bit easier.
They decided to open source all of their software at some point which meant their model went from:
- Provide tools to make deploying HDFS better, this was their secret sauce
- Provide services to setup/manage all of this
to
- Provide services to setup/manage all of this
Since everything else in their stack was open-source also, their secret sauce consisted of just being a group of engineers, which isn't much of a secret sauce, except they thought it was because "our guys know the ecosystem and tooling we developed" and so charged more for those service engagements.
Their customers realized this, hired cheaper groups of engineers (some of who included previous employees) who then worked with the now free and open sourced tools that "somebody" else had now spent VC money building instead of them.
Inside of a year or so they turned from a successful and growing concern into a VC investment black-hole and closed up shop.
The tooling and many-man-years of effort that went into developing it all was what the business was about and they simply opened it all up to the world, who then just downloaded it and replaced them.
It is interesting how some software is more amenable to being "business open source" than others.
If your software is touching online, realtime, and mission-critical data, that's a good fit for open source + support / add-ons. You can sell add-ons and ease of use and peace of mind. Some databases have been good open source companies, some have failed, and some are just chugging along not being successes or failures (definitely counts as a VC failure though if you're not a breakthrough success).
If your software is more off-line, or one-time use, or "nice to have" (e.g. a great text editor or a great file upload utility or... sysadmin HDFS deployment helpers) and you currently charge $100/seat for your magic sauce, that seems to be an awful fit for open source. Everybody would use it for free and never consider buying anything from you since it's not "real time mission critical."
Open source is preferred to maintain strong data portability, avoid vendor lock-in, avoid vendor future price increase/licensing shenanigans, and also to get a stronger pool of employees since many may likely have used common popular OSS platforms elsewhere too (less re-training needed in many cases for new hires).
