Open Source is Not (Just) A Business Model

A lot of my time here at SugarCRM is spent explaining just exactly what the “Commercial” part of commercial open source means, and how SugarCRM runs as a corporate, project-driven entity. While open source has penetrated all areas of the IT stack, there is still some misunderstandings and I get the usual “Well if it’s free, how do you make money?” questions from a lot of different people.

That is why I was glad to see my old firm the 451 Group put forth a new report called “Open Source is Not a Business Model.” You can learn more about it the report here.

I agree in a large part. Sure, open source and the community around Sugar Community Edition are a very big reason for SugarCRM’s success. But of course it is the comemrcially licensed versions o Sugar, our Sugar University training, the amazing professional services team, the support team, etc. that really bring home the bacon.

When all is said and done, SugarCRM is a company that wants to be successful and see all of the members in the extended family (and this does include the community) be successful. And I think we can do a lot of this in ways that are far more fair, and in general “good” for the corporate world compared to older software models.

And the openness of Sugar and its platform allows more people to be successful with far less investment. Instead of the old model of very closed off and “pay to play” partner schematas – SugarCRM makes it much mroe easy for a partner to not only get up and runnign with a business based on SugarCRM, but it also takes less to be successful because of the open source base. There are just far more resources available to partners in my opinion, and many for little or no cost.

So yeah, I don’t think you can call open source a business model, because it really is so much more than that. it is a development model, a manufacturing model, a marketing model, etc.

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