Hello, Casey, To be blunt, I think the flaw is in your business model.I'd recommend making all of your code available under an open source license. The more widely used your product becomes, the larger your potential customer base. If you are counting on people to start using your free version, and then pay you for proprietary add-ons, you will have a long wait. From the perspective of an open source developer, and an ex-technology director, the "you get access to the source code but you can't distribute it model" tends to alienate both camps: open source purists who want to be able to do whatever/whenever with the code, and people coming to open source because it's "free" --
In short, people understand paying for services, but it's a more complicated explanation to clarify that one section is free (as in speech and beer), but another section is proprietary, but you can see the source code, but you can't distribute it, unlike the rest of it, that you can both see and distribute -- and where does modification come in? and what does modification do to support? It feels like a shell game, and given that some people are suspicious of open source to begin with, I'd recommend simplifying the licensing so you can talk about what you want to talk about: how your product will save them time and money.
In a recent Ars Technica summary of a presentation given at LinuxWorld, it showed a move away from unwieldy commercial support options, and a move towards adopting community supported distros. The article is here: http://arstechnica.com/news.ars/post/20080808-ubuntu-community-distros-are-ready-for-enterprise-adoption.html
What this tells me (and I currently run an open source web development shop working primarily with education and non-profits): Focus on adding value to the platform. Focus on saving clients time. Work closely with the community of users and developers (and this one's easy for us, because it's what we believe -- the fact that it has also helped our business is just gravy). Release all our work back into the community so others can use it, for free.
I think your sweet spot with recurring income will come from customized installs leading to revenue from hosting/training/targeted support. A simple licensing structure will support that more effectively than a blended open source/proprietary model.
My .02 -- I hope it helps. Cheers, Bill Casey Adams wrote:
Hi Everyone, At OS4Ed, we have re-released our SIS and rechristened it as openSIS to mark the beginning of our departure from the Centre and Focus code base. We have also discarded some of the Centre/Focus modules and rewritten them as new. My question is about licensing and fees. Our goal is to become an open source provider that provides quality open source alternatives to traditional commercial applications, which can be very expensive. We obviously cannot continue to just pour our personal money into development and hope to sustain the development, so we are attempting to create an affordable business model that will allow us to collect fees to sustain coordinated and regular development that many schools cannot use. So our approach is typical open source: offering custom services, help desk support, data conversion, add-on modules, etc. My question centers around licensing for what we call proprietary add-ons and help desk. The add-ons are proprietary in the sense that you cannot distribute them, but you get all of the source code when you purchase them. We have not had a great deal of luck in selling themodules for a one time cash fee, because it seems that even $2,500 is out of reach for small schools and districts. I am considering eliminating the one time fee in favor of a repeating annual fee that would be far lower. Can anyone give me an opinion on what an affordable year in year out fees for modules and help desk support would be? Also, opinions on whether an affordbale fee based model will fly and be sustainable are appreciated as well. Thanks! -- Casey Adams Founder, Open Solutions for Education Phone: 205.612.5489 Fax: 717-326-3543. Skype: jcaseyadams SMS 2056125489@xxxxxxxxxxx casey@xxxxxxxxx http://os4ed.com
-- Bill Fitzgerald http://funnymonkey.com FunnyMonkey -- Tools for Teachers ph. 503 897 7160