Making Money from Open Source

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Making Money from Open Source

The first question I posed above ("How do I make money at this?") is far more difficult to answer. Broad copyright and patent licenses such as those described in this book are certainly not consistent with business models that rely upon selling software at high per-copy prices. Anyone can become an open source distributor and compete on price. This inevitably drives the per-copy price downward toward its marginal cost of production and distribution.

But licensors can make money on what the open source license doesn't grant . For this reason, it is often more rewarding to consider the exclusions from license rather than the open source grants of license when looking for opportunities for profit.

The most important exclusion is trademark or brand identity. Trademarks are excluded from all open source licenses, either explicitly or implicitly. Under the law, for the licensor to do otherwise would risk loss of his or her trademarks. It would result in a dilution of the licensor 's trademarks to the point that consumers wouldn't know what specific software it represents.

Despite their protestations that quality matters most, companies and individuals usually acquire software not by function but by reputation. Trademarks are thus very important factors in consumer decisions. Given consumer behavior, it is no surprise that Linux and Windows are valued trademarks in the software marketplace . By marketing software under a trademark, the licensor can sell perceived value even though the underlying software might be available elsewhere for free without the trademark.

As to what steps to take to turn trademarks into profit, that is an exercise best left to discussions between your business strategists and your own intellectual property attorney. Suffice it to say that customers are often willing to pay for brand- name software, particularly if it comes with support and other benefits. Most open source licenses don't adversely affect that business opportunity at all.

Also excluded from several open source licenses, for many of the same reasons, are the names and reputations of the licensors. Even though they grant licenses to their software, licensors can protect their names and reputations for personal profit. Many individual contributors whose names adorn copyright notices in valuable software are making a good living because their professional reputations were enhanced by those contributions. They essentially sell themselves and their expertise, rather than their software.

Most warranties are also excluded from the open source licenses in this book. A separate business can be made from selling such warranties ”as well as other support and installation services ”separate from the software itself.

Finally, the licensor of open source software is always free to license his or her software also under other terms and conditions. This means that a prospective licensee who prefers to accept the software under a different license than an open source one ”and who is willing to pay for that "advantage" ”may contact the licensor to determine if the software is also available under a different license. Chapter 11 discusses some examples of dual licensing.

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Open Source Licensing. Software Freedom and Intellectual Property Law
Open Source Licensing: Software Freedom and Intellectual Property Law
ISBN: 0131487876
EAN: 2147483647
Year: 2004
Pages: 166

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