Coding Open Source Software for Fun & Profit

Recently I asked readers of the Tech Liberation Front, the free-market tech policy blog, to give me examples of successful companies that contribute to open-source projects.  I asked readers for this sort of feedback because I wanted to point out that open-source software is a serious business, not just the domain of techno-hippies or amateur coders (who I love).  Despite the incredible success of open source software—like the 55% of web servers that run Linux, including this one—skeptics remain, largely because people of a certain stripe seem to distrust products that don’t have the backing of big dollars.

That’s why I wanted to point out that other than die-hard enthusiasts pursuing their life’s passion, the open-source community is also composed of large, profitable companies whose bottom-line relies on that software being continually updated and improved upon.

In the comments of that post at TechLiberation.com, a reader who goes by “Timon” provided this list:

1) Hadoop — Cloudera
2) Sqlite — Richard Hipp and crew (nice hack, he manages to charge for copyright hand-holding services to a public domain project for companies that absolutely insist on a cushion of legalese!) You’ve probably used this db 20 times already today.
3) Xen — XenSource/Citrix
4) DotNetNuke — Community and commercial add-ins for a popular open source .net product
5) MongoDB — Used by Disqus, among others
6) Asterisk — Amazing PBX that supports big surrounding ecosystem including hardware
7) PostGIS: supported by great smallish outfit that does well in a very interesting and usually way-too-expensive niche

But this list of seven companies wasn’t the best part of Timon’s comment, he also made this incredibly powerful point:

Of the biggest 20 software/tech services companies founded in the last 15 years, are any of them NOT depending on and contributing to open source projects? That is a much harder question than the one in the title! Linux has IBM, Google, Red Hat, AMD, Intel, HP, NetApp, Novell, Nokia, Dell, everyone on this long list. They are not doing it out of the goodness of their hearts.

Timon is spot-on with this observation.  So much of the software world is dependent on open-source projects that it’s hard to think of a major player in the computing world that’s not using and contributing to open source.  That even includes Microsoft, the champion of closed, proprietary software.

The WordPress ecosystem demonstrates the unique money-making structures that can evolve out of open-source software.  While WordPress’s code is open, its WordPress.com and WordPress VIP Hosting properties demonstrate the giving away code helps companies to build ever-improving services for which the masses will pay a premium.

Other, less centralized projects like Drupal are also money-makers, but in a different way.  A quick look through the members of the Drupal Association‘s board of directors or their general assembly shows a group of developers who aren’t exactly impoverished—many run lucrative design firms based around implementing Drupal.

All of that said, there are a lot of other reasons to contribute to the creation of open-source software other than the profit motive.  Jim Harper of the Cato Institute pointed this out in another comment to the same post, noting that:

Contributors to open source projects may make money by selling consulting services, or by touting their individual or collective skills to new clients, but the benefits for most are far more diffuse. They enjoy it, learn from it, and get the benefit when the economic or communications pie grows and there’s more of everything for everyone.

Jim’s right and I don’t believe the power of the open-source passion project should be underestimated—in fact it’s how most giant open source phenomena are started.  A lot of people create wonderful things out of the sheer love of it.  Open-source software is a special sort of hobby in that the fruits of your labor of love could be used by billions of people—model train enthusiasts just don’t have that sort of impact.

For more on the topics of open-source software, its skeptics, and the politics of software, check out this post by Tim Lee of Princeton’s Center for Information Technology Policy where he and I both touch on why we believe some folks are still reluctant about open source.

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