Open Source Goes Main Street

News Analysis: Mozilla and the Debian Core Consortium are only two examples of a trend of open-source projects morphing into open-source businesses.

Five years ago, if you had asked most people if open-source was a good basis for a business, they would have laughed at you. How things change.

Today, major open-source projects, like Mozillas Firefox and Thunderbird and the Debian Linux distribution with the Debian Core Consortium, are being transformed into businesses.

Whats happening here?

First, there has always been a strong tendency for some to look at open-source and see the business possibilities.

The late Caldera Systems (subsequently The SCO Group Inc.) and Red Hat Inc. lead the way for the commercialization of Linux.

Other people saw the possibilities of open source beyond the operating system.

David Axmark, Allan Larsson and Michael "Monty" Widenius saw profitability in the open-source database management systems and founded MySQL.

Later, Marc Fleury in the United States thought that open-source Java-based middleware could make a viable business.

Today, his JBoss is a leading J2EE (Java 2 Enterprise Edition) provider.

There are, as theyve proven, many ways to profit from open source.

/zimages/6/28571.gifClick here to read more about columnist Steven J. Vaughan-Nichols thoughts on making money from open source.

Analysts, however, now see more open-source groups than ever before, realizing that there might be gold to be found in their code.

"Were seeing a grand experiment under way now. Many open-source project teams are trying different approaches to monetizing their projects," observed Dan Kusnetzky, IDCs VP for system software research.

This development isnt just about turning a corporate profit, though. Some open-source projects need to turn commercial to keep going.

"Its a bit of a mix," said Gordon Haff, senior analyst for research house Illuminata Inc., "but certainly many of the major projects are very dependent on developers who are paid to work full-time on them, which in turn implies that some commercial entity is either profiting or hoping to profit."

As Kusnetzky pointed out, "Even open-source projects need funding to pay for systems, network connectivity, and other things."

Laura DiDio, senior analyst at The Yankee Group research firms application infrastructure & software platforms, agrees.

"The fact is Red Hat, Novell, IBM, Oracle, HP, Apache, JBoss, Debian, Mandriva, Turbo Linux et al. have to make money somehow. Common sense dictates that without a visible revenue stream or revenue generating business plan, these businesses will not be able to keep their doors open or the lights on, or secure financing (in some cases)."

So it is that DiDio believes that "the Linux distribution vendors and OEM hardware vendors are clearly commercializing Linux offerings and adopting licensing models that—although they are not nearly as expensive as commercial offerings— are trying to impose more structure and specific conditions on the models. [The same is true] for the larger and more popular open-source applications."

Next Page: Embracing a more traditional structure.