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Feature: Free Software

A business case for profiting from GNOME

By Arvind Narayanan on June 19, 2004 (8:00:00 AM)

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Is there a business model for a GNOME-based Linux desktop software ecosystem? Such a project could transform the entire desktop operating system scene before Microsoft's Longhorn version of Windows comes out. But can Linux developers be nimble enough when it comes to money?

The other day, I began ripping some CDs with Grip, a CD player and ripper for the GNOME desktop. Grip has a remarkable interface -- three nested layers of tabs! I also tried Sound Juicer, a newer application with a simpler interface. I began to wonder if GNOME (and free software in general) was gravitating toward better usability and fewer "pro" apps, and if that meant maybe it was time to make a distinction between free and commercial software by writing simple apps for free and specialized apps for commercial gain. There are several reasons why this could work:

  • Free software is typically written to "scratch an itch." Since specialized software tends to have a small target audience, there is a smaller probability that it will face competition from free software (as is seen from the fact that there isn't much free software around for specialized domains).
  • Since the user will need to spend time to learn the interface of the app, they are more likely to be willing to pay for it, since the value of the time required to learn all its features (at least a few days) is worth much more than a few tens of dollars.
  • Specialized software typically forms an important part of users' business strategy. Therefore, it is likely that they will want to purchase support for it, if it is available.
  • For non-commodity software, it is possible for developers to listen to the needs of individual users and incorporate feature requests. Users are willing to pay for this privilege.

Bootstrapping commercial software

So far, so good. Specialized software can get written for Linux, and people can make money off it too. Why is it, then, that the culture of $30 commercial software is practically non-existent on the Linux desktop? It's a Catch-22: the software doesn't get written because authors think there are too few users who want it, and they wouldn't buy it anyway; Linux users often don't look for commercial software because they are used to not findng it, and even when they do, they tend to associate commercial software with poor quality and untrustworthiness.

I'm focusing on Linux here because several Windows applications already exist for most categories. Second, for desktop apps where a large part of your code is the user interface, it's a lot of extra work to make your app cross-platform. Third, what we have in mind are mostly single-developer projects, and few hackers have experience developing on both Linux and Windows (let alone Mac OS or any other platform you might want to port to). Fourth, cross-platform apps aren't as appealing for the user: they don't have native look and feel, or are difficult to install, or both.

How do we go about writing and selling Linux desktop software? Here's how:

  • A commercially minded individual developer or a small company (say GNimbleCorp) writes GNiftyApp, a simple barebones GNOME application that meets the needs of 90% of the users for whatever task it performs. It is GPL-licensed.
  • GNimbleCorp also releases GNiftyApp Pro, a specialized application. GNiftyApp Pro is proprietary software. You can purchase a license, including support, for $30 (as an example). LGPL licensing of the GNOME libs makes this possible.
  • GNiftyApp is good enough to be shipped by major distros, and gains a large user base.
  • GNiftyApp has an "Upgrade to GNiftyApp Pro" item in its help menu. This is free advertising. Users of GNiftyApp feel that they can expect a quality product because of their experience with the free version. They also trust GNimbleCorp because it has shown it is a good open source citizen by GPLing GNiftyApp. A small fraction of users buy the Pro version, ensuring a revenue stream steady enough to employ a full-time developer or two on GNiftyApp and GNiftyApp Pro.

Assuming ballpark figures of 20 million Linux desktops, a 2% probability of an installed app being used by a given user, 10% of users of GNiftyApp having specialized needs, 25% of users with specialized needs actually shelling out the $30 for the Pro version, and a two-year upgrade cycle, the revenue works out to $150,000 per annum. Not bad for a single developer garage shop, huh? Most of those figures are somewhat pessimistic estimates. The 2% usage probability is sufficiently low that a large number of application domains qualifies, perhaps a hundred. More popular apps have a proportionately larger monetary value. Currently deployed and popular GNOME apps are in the best position of all.

The central thesis is that having your app shipped by major distros offers an enormous business opportunity in the form of a free advertising medium that is currently largely unnoticed and completely unutilized. The fact that Microsoft doesn't ship third-party apps with Windows means that a corresponding business model for Windows relies on an extra step of the user downloading and installing a package even to use the free version of the program. This significantly mitigates the advantage of Windows having a larger installed base. Therefore, commercial software for the Linux desktop shoud be about as successful as commercial software for Windows.

Widespread adoption of this business approach would annihilate the number one problem facing Linux on the desktop. More commodity free software gets written, more specialized software gets written, and the two enjoy a symbiotic relationship. And the developers get paid, keeping the ecosystem healthy. What's more, it is likely to start a snowballing positive feedback cycle of more apps gaining more users, who demand more apps....

Issues

This is a radical idea, and not everyone will like it. Below I propose several possible problems with the model, along with solutions that should be acceptable to anyone who uses free software out of pragmatism rather than ideological considerations.

Would distros ship it?

Why not? After all, the app they would ship is GPLed. Commercial distros, more than anyone else, would appreciate the GNimbleCorp's right to make money with free software. While they are within their rights to rip out the "Upgrade to GNiftyApp Pro" menu item and ship GNiftyApp, they are unlikely to alienate developers by doing a nasty thing like that for no tangible benefit.

What about core GNOME apps?

This is a slightly trickier question. Obviously GNOME would like to avoid controversy, so for apps in the core GNOME desktop, it is perhaps best if the app put a discreet "a more advanced version, GNiftyApp Pro, is available for $$" somewhere in the help contents rather than mess with the menus, or the developers could put a link to the Web site in the help menu and advertise the Pro version there.

What happens when there's competition? That is, if GNiftyApp and GNeatoApp do the same task, then how does the distro decide which one to include? There's a lot of money at stake!

The obvious answer is that the distro should just apply the usual selection criteria that it uses without considering the monetary consequences (which do not, after all, affect the distro itself).

How do you protect the user from being ripped off? What if the authors of GNiftyApp deliberately refuse to put in features (even those that are useful to a majority of users) in the hope increasing sales of GNiftyApp Pro?

The GPL has built-in protection against such abuse; if people feel that GNiftyApp's authors don't have the users' best interests in mind, GNiftyApp will be forked.

Licensing issues GNiftyApp, being open source, would receive patches from other hackers. Some of this code will go into GNiftyApp Pro. What about licensing?

GNimbleCorp should make it clear that for all patches submitted, the author agrees to assign copyright to GNimbleCorp if the patch is accepted. This should be acceptable to patch authors: the copyright transfer requirement applies only if the patch is accepted, in which case the code remains free because GNiftyApp is GPLed.

Is proprietary the only way?

Of course, GNimbleCorp could choose to GPL GNiftyApp Pro as well, and make money through support alone.

In closing, a note to KDE fans. All I have said might be possible with KDE too. It is just that GNOME's approach of keeping apps as simple as possible and LGPL licensing makes it clear that a GNOME ecosystem would work.

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on A business case for profiting from GNOME

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Is this 2004 or 1994?

Posted by: Anonymous Coward on June 19, 2004 05:20 PM
Value-add of one kind or another is a part of virtually every Open Source business strategy. That includes every commercial distro - the creation of the distro itself, a coherent set of software, is a value-add move - then think updates, support, training, etc.

Closer to the article's suggestion (proprietary add-ons as a value-add), think of how Mac OS X leverages FreeBSD, Apache, etc., think of the widespread support for Evolution (GPL) despite the (until recently) closed-source, commercial Connector for Evolution product... Think of JBoss. Think of Mozilla vs. Netscape, before recent events. Ghostscript's weird model.
Blah, blah, blah.

What does this article suggest that is new or interesting?

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Re:Is this 2004 or 1994?

Posted by: Anonymous Coward on July 13, 2004 03:33 AM
You'll profit more from writing non-free software for a niche where there is a need for a software that is not met sufficiently and apply your open source wizardry to it and wrap it into a nice linux distribution and create a company to deploy it at your customer's site.

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Isn't that pretty much the business model of QT?

Posted by: Anonymous Coward on June 19, 2004 07:53 PM
And frankly I didn't know that it is kde's approach to make apps as complicated as possible. And what does LGPL licensing the gnome libs have to do with it? I know that this makes building an closed source app on top of them possible, but kde libs are also LGPL and if you want to write cloused source software with QT you'll just have to buy a liscence.

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Re:Isn't that pretty much the business model of QT

Posted by: Anonymous Coward on June 19, 2004 08:45 PM
The problem is you have to buy the license before you start programing. So you can't start creating it using the GPL version and at the end change to the comercial version (according to the license).

Also the KDE libs are GPL.

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Re:Isn't that pretty much the business model of QT

Posted by: Anonymous Coward on June 20, 2004 12:53 AM
Also the KDE libs are GPL.
No that's a common misconception, your parent was correct. LGPL and BSD style licences in kdelibs.

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Re:Isn't that pretty much the business model of QT

Posted by: Anonymous Coward on June 22, 2004 02:04 AM
the problem is you rather troll than think

TT has a policy for small shops to give them payment breaks to differ payment until they make money... as with the above example it would cut a whopping $2500 out of that $150k... just some perspective...

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Doesn't make sense

Posted by: Anonymous Coward on June 19, 2004 08:52 PM
The problem with this model is the low barrier of entry.

Using you CD burner example:

App - Works well enough but doesn't have X which is in the Pro version.

App Pro - Has X feature.

Some one else will add X to the App and release App Plus which is the same as App Pro but cheaper of free.

Also if the App is good enough why would you bother buying the Pro version as time goes on more features are added to the App so there is less of a reason to get the Pro version. Your shooting yourself in the foot.

If you going to do it that way you'd have more luck with a Bounty.

E.g. Transgaming but pure GPL people don't like that business model.

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Someone remembers Eazel?

Posted by: Anonymous Coward on June 19, 2004 10:22 PM
What the article is suggesting remembers me nautilus 0.5 by Eazel. Where's Eazel today? And in the end a file manager is highly used by common users.

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Re:Someone remembers Eazel?

Posted by: Anonymous Coward on June 20, 2004 07:52 AM
I think that Eazel fails the premise of a "niche" market.

I can see the author's point. That niche markets are about the only place where companies have a chance of competting with OSS. The more common a function is, the easier it is to gather a large number of OSS programmers that will out-compete your propietary software.

Cheers,
Daniel.

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Windows Share/Crippleware Shills....

Posted by: Anonymous Coward on June 20, 2004 01:19 AM
Face it Clowns. You and your crapware aren't wanted
in the Linux/Free Software world. Nobody cares if
you starve to death so please do so.

What's really funny is seeing you guys running after
people migrating away from the Windows waving your crap in the air as if the people leaving were interested in your "ideas' to begin with.

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Re:Windows Share/Crippleware Shills....

Posted by: bill_blass on June 20, 2004 10:21 AM
Your post is immature and hilarious. I love it. Shareware and Crippleware shills are lower than car salesman and are working fervently under the most outdated ideas in software. These ideas are even more outdated than Gates'--though not by much. Wow, I really dislike these people.

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Re:Windows Share/Crippleware Shills....

Posted by: Anonymous Coward on June 20, 2004 10:41 AM
There is a large difference between crappy shareware Windows programs and the kinds of programs that would get included in a distribution. To be included, your program actually has to do something useful, and not have any limitations on said functionality (because they would simply be removed from the GPLed code anyway). No more of this "Use three times then annoying pop-ups til you buy it."

But then again, you probably just think you are cool for bashing Windows and proprietary software developers who want to make a living. By all means, continue making a fool of yourself.

On a side note, I've never produced anything but GPLed software, and I never will - but lets not hate on those who do, if they contribute to the OSS community.

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Re:Windows Share/Crippleware Shills....

Posted by: Anonymous Coward on June 20, 2004 01:26 PM
This is a thoughtful article.

You are a thoughtless reader with crude, arrogant words that people use to hurt linux. Or perhaps that is your intention.

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Rubbish

Posted by: Anonymous Coward on June 20, 2004 02:13 AM
The economic illiterate bollocks I have come to expect from people who promote the LGPL as a panacea for developing everything for free. The GPL works. If you develop proprietary software then you pay for it in some way.

Is Gnome still a GNU project?

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Re:Rubbish

Posted by: Anonymous Coward on June 20, 2004 08:02 AM
If you develop proprietary software then you pay for it in some way.

I think that vendor lock-in is wrong. This implicitly involves propietary formats. But I don't have a problem with propietary software that uses only open formats (though I will still give a preference to Free/Libre Software.

Is Gnome still a GNU project?

Yes it is. and it is one of the largest sources of GPL software around. Their libraries are LGPL, and their apps are GPL.

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Re:Rubbish

Posted by: Anonymous Coward on June 22, 2004 02:41 PM
I don't think the Community is where shareware developers like this guy and myself are aiming at. Their preference for strict GPL style FOSS software is well known. What these shareware people on Linux are aiming for is the END USER community that is fleeing Micro$oft's increasingly arrogant and unaccountable Windows and Office licensing policies and using Linux as the vehicle of that flight.

These people are not interested in the software politics and religion of FOSS community but just want user friendly software that WORKS without having to compile it themselves or deal with "dependency hell". (FOSS under Linux virtually NEVER comes with the library dependencies, startup scripts and other devices it needs to run.but requires people to hunt down these items separately from the app itself.)

I actually predict that GNOME is going to beat KDE on the Linux desktop when the Windows people REALLY start coming over precicely because of the more shareware and other proprietary software friendly licensing policies of GNOME/GTK+/WxWidgets over KDE/QT.

Therefore the FSF and RMS are going to get one of the things they want (a GNU based desktop on linux as standard that will truely justify the name GNU/Linux) but NOT the other (The end of proprietary software).

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This guy does not understand our community....

Posted by: Anonymous Coward on June 20, 2004 12:38 PM
Take your shareware bullshit and keep it in windows. We develop software because we like to share. We write documentation because we believe that the world doesn't just work on monetary exchange.

If you want to make money writing free software, get your users to sponsor you by making them love your software or asking them to pay for it, but keep the whole thing fully GPLed.

I hate software that advertises its pro-version to me. I have given money and plenty of time to many applications. We are building a post-scarcity world where we do programming for the sheer joy of applying our intellect. It will take years to get there, but we will get there. The XXI century is about solving the distribution problem, not the problem of production.

I will not make the unethical choice of chaining myself yet again by using the proprietary version of any app that forces me to not be able to share it with my neighbor. The author should brush up on the history of the Free Software movement.

If you want our money, win our hearts and minds.

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Re:This guy does not understand our community....

Posted by: Anonymous Coward on June 20, 2004 11:03 PM
Stop acting like you are the only person in the world. You obviously make up one of the 97% or whatever that *don't* use proprietary programs at all, so just shut up and leave it at that.

"Free Software" != "Open Source" and you aren't the only one around. I'd be happy to pay for a program that did something I needed, and did it well, as well as conforming to open standards.

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Re:This guy does not understand our community....

Posted by: Anonymous Coward on June 21, 2004 05:30 AM
We develop software because we like to share. We write documentation because we believe that the world doesn't just work on monetary exchange.

I would be interested to know what projects you contribute to. I spend 40h/week volunteering for OpenOffice.org, how about you?

As a general rule, I find that the most immature and loud posters are also the least likely to roll up the sleves and do work.

Perhaps you will turn out to be the exception to the rule. If you are looking for ways to contribute, please send me an email (dcarrera@openoffice.org). I have a dozen ideas for you.

Cheers,
Daniel.
OpenOffice.org volunteer.

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Re:This guy does not understand our community....

Posted by: Anonymous Coward on July 01, 2004 03:34 AM
Email sent...

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optimistic maths

Posted by: Anonymous Coward on June 20, 2004 06:44 PM
this article is full of holes... and is weird particularly in the maths... assuming 20 million market population, 3% market share, bla bla bla; and gives you $150K per year, the last time I heard these kind of jokes was the Nigeria scam...

don't tell me the author is in the software business

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Re:optimistic maths

Posted by: Anonymous Coward on June 20, 2004 10:58 PM
Tell me, how would you do it? Would you pick your numbers better, even though you would also pick them arbitrarily? If so, how do you know it was better?

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Re:optimistic maths

Posted by: Anonymous Coward on June 21, 2004 05:58 AM
What's wrong with the math?

He said 20 million desktops, 2% of them use the software, 10% of those users actually having a need for it, 25% of them willing to shell out $30 for the Pro version, and then upgrading every other year.

Let's try that out.

That means:

20 million x 0.02 x 0.1 x 0.25 = 10 K buyers.

Each spends $30 every 2 years, or $15 / year. So that gives you a mean or $150K/year.

What's the problem?

As for whether these values are reasonable or not depends on the quality and usefullness of the app. Hence, a sufficiently well-made product for a niche market could be fruitful in this form.

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I can't believe this !

Posted by: Anonymous Coward on June 20, 2004 11:50 PM
>> What happens when there's competition? That is, if GNiftyApp and GNeatoApp do the same task, then how does the distro decide which one to include? There's a lot of money at stake!

>> The obvious answer is that the distro should just apply the usual selection criteria that it uses without considering the monetary consequences (which do not, after all, affect the distro itself).

I can't believe this!

me: --- "GO AWAY, please"

(exit the author)

me: --- "Thank you"

Finally back to work doing excellent Free Software stuff for Free Software People.

FR

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Re:I can't believe this !

Posted by: Anonymous Coward on June 21, 2004 11:11 PM
Is it just me, or was your post completely stupid?

You provide a quote where the author says that things should be decided by what a program does and not monetary concerns, and then you praise your FS while putting down the author for saying that money shouldn't matter to the distro.

Wow, don't you make a lot of sense?

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