Everybody's Free (To use Open Source)

Open source, it was once famously described by Microsoft’s CEO Steve Balmer as a “cancer” that “attaches itself… to everything it touches”. This was mostly in reference to the GPL Licence. The idea was that any derivative works also had to carry this licence, which does make it quite difficult to create a business using open source software based on this licence. Better open source licences have been created since, and Microsoft now releases a lot of open source software, as well as supports open source in its cloud computing solutions. I'm not against Open Source, I'm just careful of when using it compared to other proprietary software.

What are the pros and cons of Open Source?

Licence-cost free, but at a cost.

The majority of end-users like open source for one reason and that reason alone - it’s free. Free is great right? Well, free is great for the person getting it for free. It’s a bit like film piracy. But it doesn’t work when it’s one way. And if it's a free service you're using, they've gotta make money still. So it's either your information they're selling, or advertising.

Open source has its place. It has helped create Linux, which powers most of the world’s internet (and many other devices in your home, and elsewhere). It allows anyone to edit the code, and create additional works.

Your time = money

Nothing is ever really free though. Thousands of hours have gone into the development of the software for the benefit of a large number of people, with the majority giving little back. There is a feeling that it's better to use open source software than paying large corporations like Microsoft, Apple, IBM etc. There’s also generally a lot more time spent configuring open source software to get it to work, most people forget this (your time is worth money, it’s not limitless, in fact it's more limited than money, as we all have the same number of hours in each day, no matter how wealthy you are).

Lack of financial support

There’s also the issue when certain open source software becomes so ubiquitous, but doesn’t have much money being fed back into the development to ensure its constantly updated. OpenSSL being a great example recently. Wouldn’t it be great if just $1 from every SSL certificate went to the OpenSSL group to ensure they have a decent budget considering the number of websites using their technology. It’s a tiny amount, especially compared to the cost of fixing the Heartbleed bug, and other ones since.

Non-sustainable

Free isn’t sustainable. Depending on free software is like depending on oil. It won’t last, as it’s not sustainable. There are ways of making it sustainable, like building service businesses around these products. They create jobs, but still not for the developers creating the software. Innovations have been created and technology has advanced through open source, but unless everyone’s willing to work for free, it’s a utopian fantasy.

Freemium - half way between free and paid

The same applies to Freemium software. It’s a tactic used to gain a large user base, often to then sell the company (and your data), rather than to provide a sustainable business. Here’s a list of failed Freemium companies that actually had successful software that I was using, and then became unavailable!:

• Catch.com
• Do.com
• Springpad.com

...just to name a few.

They pretty much did the same thing, but differently. None of them came close to OneNote or Evernote though. They should've had better paying offerings, as I may well have signed up, but their free version was all I needed. I like paying for monthly services that save me time, especially small startups. I want them to succeed, so will often recommend them to my friends (with or without affiliate links to get 10% off etc).

Offer trials, not free for life.

Tech startups shouldn’t offer freemium products, for the same reason interns shouldn’t work for free, or Designers do “portfolio” pieces for free. At best it is something you do in the early days, but not during growth days. It devalues your work, and the industry as a whole. Moving from freemium to paid is difficult, often only 1-2% of customers will convert. As an example, the number of Facebook hoaxes, and reactions, to charging for their services. Why shouldn’t they charge? Most people would get at least ￡5 benefit / month paying for it, often using their ￡40 / month phones pretty much just for Facebook. They’ll complain about Facebook changing, and advertising to them, and if it goes down for 30 minutes they’ll be up in arms! They have a choice - not to use Facebook.

If you’re selling a service, and no one is willing to spend ￡5/month on it, then it can’t be offering much value. So you either need multiples of ￡10m investment, and to enter the market at the exact right time, or you’re wasting your time.

Create sustainable businesses from the start

So please, unless you have millions of free cash at your disposable, put your efforts in creating something that people need and would be willing to pay for, even a token amount. It doesn’t matter if you have 10 million users. If you have 100,000 users, each paying ￡5 / month, then that gives you an annual turnover of ￡6m each year.

It’s less risky, it’s more useful, and most importantly it’s sustainable. I'm not against using Open Source software, but think realistically about it, and whether it's a conscious business decision, or one based on emotion.