The profitability of free software companies – Hypertext

The doubts about the profitability of companies specializing in free software , not only has no reason for being in light of the available data, but also, clearly are based on misconceptions and pure and simple ignorance. And, though it seems counterintuitive that a model of community software is capable of serving as a basis for a strong and profitable industry, the economic success stories in this sector are multiplying. The economic success stories in the field of free software companies multiply

The free software longer be nuts programming at the time when companies realized that employ millions of software licenses Oracle or Microsoft reinforced spending and increased their dependence on those companies. However, free software could offer similar tools and some important better scalability .

The value of innovation that this technology is able to accumulate leading to this model show development is useful to coordinate and encourage the developers in the production of safe, solid and customizable build on that services platforms awaken confidence and attract investors and customers . In addition, open source is not only perfectly adapted to the trend of cloud computing, but its advantage has increased exponentially with it.

This technology has raised its enterprise deployment, and with it, have prosperous businesses that rely on it and, moreover, no longer dependent on a community of users-programmers, but also develop their own products.

Two very clear examples of successful companies specialized in free software are Red Hat , which has developed since 1993 one of the distributions of the GNU / Linux operating system more like the public at the time, and Red Hat and Canonical are two multimillion companies that demonstrate the commercial viability of free software Canonical . If there is a company that in recent years has incarnated how profitable it can become free software and freemium revenue model, that is Red Hat. It went public and its shares became the eighth biggest gain in a first day in the history of Wall Street. And while the crisis affected them quite the dotcom bubble of 2002, its profits in 2011 amounted to 100 million dollars for the first time. Common sense must therefore reject the idea that there would be no open-source companies such as Red Hat, capable of more than 1000 million revenue by offering free products.

For Canonical, centered the software of computers with Ubuntu and a business model of service delivery, as it has been positioned thanks to the demand of the benefit related to free software products every year is more and well reduces the distance between your income and losses and thus is poised to be as profitable as Red Hat, which presumably occur in not too long.

How to make money from free software companies

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a world where the mountains move money, it makes sense to think that open source would not be as popular without tickets involved, especially considering that companies need revenue to survive. And that’s how they get the free software:

Thanks to the investments of people with large economic resources which fascinated the field of technology , or who have by philanthropists themselves, or because they try to buy influence in this world, there are open source companies that survive and even work in full swing. In addition, projects Freemium: offer a free trial version that pleases both the customer decides to upgrade to the special edition, payment Technology are the most successful have to start a campaign on any platform crowdfunding , and are often made with the funding needed to implement them.

But these revenues do not come directly from the economic activity of enterprises and so that they have other sources of capital such as double license or freemium , which offers a free trial version and one that costs money, hoping that customers founded try, cate the free version and pleases both you decide to upgrade to the special issue of payment for additional functionality and tools that, otherwise, would not enjoy.

There are many cases where the Free programs are distributed free, but in others the distribution comes at a price, to very high at times. And although in practice it is possible to obtain the same program of the two forms and from different sources, regardless of the price, the program is free because users are free to use it as it suits them: charge for distribution software does not mean that it is less free .

The support payment, on the other hand, also provides fresh free software companies money, because there comes a time when any technological product fails somehow and no other alternative but to resort to service and pay for it. Or services periodic maintenance . In addition, certain companies Charging for distribution, service, maintenance and consultancy; other ways to monetize free software open source have returned to the supports that are based on subscribe , with which customers use their software for free, but must pony up for a technicians who will help ensure that the equipment is working like a charm.

On the other hand, there are companies that charge for free software to perform An advice for choosing applications and even application development as from their own free applications. And the competition is also true in the arena of free software, and there are companies that can make the decision free software and platforms in the open source platform to grab a cake bigger piece competitors , than indirect revenues come from such expansion.

Given the doubts about its profitability …

Canonical – Canonical.com

Despite of all this, many people would not invest a single euro in this technology because they expect it back. And when you are asked, for example, a Juan Julian Merelo What would you say to those who think that the companies dedicated to free software can not be profitable, responds emphatically:

“Just to inform themselves. There are large companies whose core business is the free software, such as Red Hat or Canonical. And small. The license sales model occupies an increasingly smaller part of the market and in a model of selling services or software as a service, or based on data, free software has many advantages over proprietary “. Ramon Ramon: “Google would not be what it is today if it were not for the use of free software”

Ramon Ramon , before such a relevant issue, he insists that “free software is not synonymous with gratuity. There are thousands of free software companies in the world, and many are generating significant benefits, jobs, wealth … The clearest example can be, for example, Red Hat “, as mentioned by Merelo, “a large multinational that generates huge profits. Indeed, Google itself would not be what it is today if it were not for the use of free software “

David Ubeda delves into the last thing mentioned Ramon.” I ask [those who believe that free software is not profitable] if they think that companies like IBM or Google, to released to the community as Android, based on the Linux kernel, products are not profitable. Perhaps these people know the business models that could form around the free software. Lack formation about it, and also necessary that companies rely more on the developer community and its product . “

It seems that the three experts are very clear that, if they possible, not only would have no objection to invest in free software, but they would be happy.