How can large open source projects be monetized?

© 2016, iText Group NV© 2016, iText Group NV

OPEN SOURCE INDIAHow can large open source projects be monetized?Bruno Lowagie, CTO iText Group NV

© 2016, iText Group NV

How can large open source projects be monetized?2

Introduction: who and what?Bruno Lowagie

Original developer of iTextex-CEO, current CTO at iText Group



An economic law



You’re an open source developer…



… What are the implications?

Users will ask questions on how to

use it,

Users will demand that you fix bugs,

Companies will expect warranties (even if the

license says they accept FOSS as-is),

Companies will want 100% clarity with respect to the IP,

Companies will expect you to maintain and update the software,

Companies will want you to upgrade to the newest specifications,

You will be cursed if you don’t answer fast /

friendly / accurate enough!

What if you can’t live up to all these expectations?



What can you do about it?



Create a business model

http://www.theserverside.com/news/2240234582/Reflecting-on-open-source-software-Java-9-and-startup-strategies-at-Devoxx-2014http://www.zdnet.com/article/openssl-needs-corporate-funding-to-avoid-heartbleed-repeat/

http://arstechnica.com/information-technology/2014/04/tech-giants-chastened-by-heartbleed-finally-agree-to-fund-openssl/

http://www.theserverside.com/news/2240234582/Reflecting-on-open-source-software-Java-9-and-startup-strategies-at-Devoxx-2014

http://www.zdnet.com/article/openssl-needs-corporate-funding-to-avoid-heartbleed-repeat/

http://arstechnica.com/information-technology/2014/04/tech-giants-chastened-by-heartbleed-finally-agree-to-fund-openssl/



Ideas to monetize your project



iText: the early years



Donations



Generating revenue using adsFree online tutorial:• Google AdSense

• 2004: $8,900• 2005: $14,500• 2006: $6,200• 2007: $2,350• 2008: $1,900• 2009: $1,500• 2010: $280• 2011: $520• 2012: $350• 2013: $160



Making money with ads?



Writing documentation

1st Edition: 2006• 11.600 copies• Approx. $33K

2nd Edition: 2010• 9.200 copies• Approx. $30K



Selling support



Selling professional servicesNot scalable

There are only so many hours in a dayAll time spent on a tailor-made application is time you don’t spend on your product

Are you really going to compete against these guys:



What did we do at iText?



Which business are you in?

• For instance: Amazon sells books and AWS• For instance: Google sells ads, services,…• For instance: Uber sells rides

Are you selling a service?

• For instance: an ERP system• For instance: a PDF library• …

Are you selling software?

I’m assuming a context of selling software



B2C or B2B?

• For instance: a tool or a game people can download,• Users download and install the tool: use, no distribution,• The users have no commercial activity relating directly to the software.

B2C

• For instance: a library that parses XML, creates PDF,…• It doesn’t work unless you write some code around it,• Typically, it is distributed (e.g. in a SaaS context).

B2B

I’m assuming a B2B context



Copyright versus CopyleftCopyright law

• allows an author to prohibit others from reproducing, adapting, or distributing copies of the author's work.

Copyleft

• gives every person who receives a copy of a work permission to reproduce, adapt or distribute the work as long as any resulting copies or adaptations are also bound by the same copyleft licensing scheme.

©

©



Open Source License overview



GPL-style software licensesIt’s all about distribution

License: MPL / LGPL GPL AGPL

Car distribution(e.g. OEM)

Commercial use? OK for gratis commercial use Commercial license needed Commercial license needed

Bus service(e.g. SaaS)

Commercial use? OK for gratis commercial use OK for gratis commercial use Commercial license needed

Free/Proprietary Before iText 5:Improvements engine: LGPL

Car or bus: can be proprietaryCar: must be GPL

Bus: can be proprietary

Since iText 5:Car or bus: must be AGPL

Or: buy commercial license



Dual licensing

Enterprise

closedsource

opensource

commercialsource

FOSS Company

The product is available for free for those who accept and comply with the F/OSS license

If the product is also distributed under another license, a commercial license is needed.The FOSS company makes the product available under a custom license for those who pay for the product:• Support,• Warranty,• Indemnification,• Release from the

requirements of the F/OSS license



Open Core licensing: e.g. iText 7

Open source

Closed source Your project

?



Business Source License: e.g. MariaDB

All source code is open, but not “open source”: it’s “business source”.

MaxScale is only needed in case of heavy use of MariaDB.

This prevents perceived abuse by GAFA & co.



What are GAFA companies doing?

Googleplex, Mountain View, CA



When to use a permissive license?

•You want to use software and do whatever you want with it:•You sell software as a service (Google)•Your main business is ads; your users are your product (Facebook)•You sell rides (Uber)•You sell professional services (RealDolmen)•…

Suppose that you’re Google, Amazon, o a similar big organization

•Developers can make you “King” and allow you to disrupt entire industries!•You don’t want to pay for software; you want developers to release their code for free.

The software used in your company doesn’t represent any value, but…

•You hire / sponsor zealots that are popular among developers looking for a role model.•You spread messages such as: “Asking money for software is bad” and “The (A)GPL is evil!”•As soon as a product doesn’t meet your needs anymore, you drop it and replace it.

Hence you brainwash developers



Beware of “anti GPL” propaganda

• You are the King in your business (selling ads, rides, services,…).• Your value is not in the software, hence you can give it away for free.

Suppose that you are the next GAFA company

• If they aren’t competitors, they might improve the software.• If you can also benefit from their improvements: you win!

• If they are competitors, they can try to copy you, but:• You can easily crush them because your brand is King,• You can buy them if they are interesting (and possibly kill them afterwards).

Other companies can use your software

• Oracle dropped Glassfish,• IBM backed away from Geronimo,• Pivotal left Groovy…

As soon as there is no longer an economic benefit, drop all support



Is that a sustainable situation?

• Will we wait to put out the fire until after the house burned down?

When will we be confronted with the next Heartbleed disaster?

• Open source used to be written by enterprising people.• Some of them were smart enough to become successful entrepreneurs.

• Nowadays, it’s as if most open source software is written by employees.• Developers aren’t King; managers are.• Developers are disposable, replaceable jokers…• What will be the impact on the innovative aspect of open source?

Who is currently creating open source software?



Can a FOSS license be enforced?



The problem with B2C



Copyright infringements



How abuse is detected

•For instance during the due diligence for an investment or in the context of M&A

A third party performs an audit

•For instance: when an integrator introduced iText without telling his customer

A future customer finds out

•Directly “we are using iText at our company” or indirectly “We have a question about iText”

A developer informs us

•For instance: we see hundreds of visits from the private network of a specific company•For instance: we discover a PDF that contains iText’s visible or hidden fingerprints

We find out ourselves

•Example: lawsuit against German company

A partner informs us



Step 1: Go to bailiffDocument the infringement:

June 12, 2015



Step 2: send a Cease and desistJune 16, 2015

June 30, 2015



Step 3: go to courtJuly 8, 2015



Step 4: Get confirmation from courtJuly 17, 2015



Step 5: Get confirmation from abuserAugust 27, 2015



Is this the way we make customers?

Of course not!

• We are ethical people, but we expect users to be ethical too!

• We prefer a friendly negotiation over a trial before a court

• You don’t make customers by adopting a punitive approach

On the other hand, we can’t afford being

abused…

• … so we have to set an example once in a while!

• Why should we tolerate blatant abuse?

The courts are there to help you

• Case solved in about 2 months

• All costs paid for by the party that lost the case



Open source success story



Awards

•BelCham Entrepreneurship Award: “Most Promising Company of the Year 2014”•Deloitte’s Technology Fast 50: Winner in Belgium

2014

•Best In Business International 2015 Silver Award: “Product of the Year”•American Business Awards 2015 Bronze Stevie: “Most Innovative Company of the Year”•European Business Awards 2015/16 National Champion: “Entrepreneur of the Year”•Deloitte’s Technology Fast 50: 2nd place in Belgium•JavaOne Rockstar Award

2015

•European Business Awards 2015/16 National Public Champion: winner of the national vote in Belgium•Flanders Investment & Trade 2016: top 3 in the “Lion of the Export”•American Business Awards 2016 Bronze Stevie: “Most Innovative Company of the Year”•International Business Awards 2016 Silver Stevie: “Most Innovative Company of the Year in Europe”•European Business Awards National Champion 2016/17: “Business of the Year with Revenue of 0 to 20M euro”

2016



You could be in this picture…



Questions from the audience?

iText Software [email protected]+65 67 16 97 85itextpdf.com