How does the C5 company create revenue if this is open-source?
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Hi, there,
Just playing devil's advocate, not trying to cause trouble.
In fact, I'm liking C5 so much I'd rather it NOT go away anytime soon (or not so soon, really).
So I read somewhere that C5 was once a commercial product that went open-source, and it doesn't take a brainiac to recognize that the income stream just tanked.
So how, may I ask, does this company support itself, if it is done by anyone full-time?
Thanks so much, and sorry to get personal, but it's just something that could be an issue of "well, we gotta go try something else to make money, see you all later" and it'd not be good for faith in longevity, you know?
Have a great day, all,
- Paul
Just playing devil's advocate, not trying to cause trouble.
In fact, I'm liking C5 so much I'd rather it NOT go away anytime soon (or not so soon, really).
So I read somewhere that C5 was once a commercial product that went open-source, and it doesn't take a brainiac to recognize that the income stream just tanked.
So how, may I ask, does this company support itself, if it is done by anyone full-time?
Thanks so much, and sorry to get personal, but it's just something that could be an issue of "well, we gotta go try something else to make money, see you all later" and it'd not be good for faith in longevity, you know?
Have a great day, all,
- Paul
I too would put my bid in ;)
Excellent reply Chad.
Excellent reply Chad.
I understand what you're saying, but I think open sourcing something does a better job of ensuring that it'll be around for the long term. We could go away tomorrow and the code will still be there forever (Don't worry, we're not planning to ;-) )
Chad is right - we make money on add-ons, both selling our own and those of our third party developers. Additionally, pretty much everything in the "Services" drop-down menu that we offer has a modest price attached to it. It's quite competitive with similar products in the industry.
Chad is right - we make money on add-ons, both selling our own and those of our third party developers. Additionally, pretty much everything in the "Services" drop-down menu that we offer has a modest price attached to it. It's quite competitive with similar products in the industry.
Yup.
To be frank, we make more money today from non-services related stuff than we ever did when concrete CMS was commercial. Yay open source.
The other thing to bear in mind with any open source project is what they mean when they say "support." Let me paint it this way...
Traditional commercial software (at least at the enterprise level) there are two bills, the upfront license fee and then the ongoing one. Sometimes these are just annual fees (like sharepoint) sometimes the company have 'important' version updates they charge you for (MS Office) but almost always there's an upfront and then ongoing fee.
The upfront fee typically offsets marketing costs. You have to spend more money on guys in suits convincing you this is going to solve your problems, and the revenue for bizdev/marketing typically comes out of initial sales.
The ongoing fees typically cover maintenance and development. Software is a living thing, so if you dont keep giving it love, it dies a slow death as time leaves it behind.
Then there's a handful of other revenue streams - training, certification, configuration/customization services, etc. Often these are seen as afterthoughts that need to exist for the software sales to work.
With open source two things interesting happen. First your marketing costs are reduced, somewhat. Strangely giving away software for free still actually costs a fair amount of money, but you do have a larger sales funnel that requires less expensive hand holding because push comes to shove you can let folks try it for free. The second thing that happens is you make money on everything else. So Redhat makes a lot of money on training and certification, but if you want to get a copy of linux for free, you certainly can.
Regardless, when you pay for commercial software you're actually getting the promise you won't be abandoned. You can't mess around with the source code to MS Office, so chances are you can't break it that easily. If it doesnt work, and you're loud enough, you get your money back. Your copy will always be upgradeable, you're buying the security of not being abandoned with software you'll never get your data out of.
Now with open source, you DO run that risk. The up side is "we know whats going on under the hood." As a geek, I find that appealing. As a business person, I find that horrifying. All it takes is one sloppy developer in my business messing around under the hood, and I have a car that will never start again. I want to buy a solution, not a machine I can break. So to a business that is making money doing something else and just needs the software to work well for a long time, there's actually a lot to be said for leasing that car and never opening the hood. The downer is commercial software mandates you NEVER will open the hood, and requires you to muster the faith in that company that their car will ALWAYS start.
So open source (at an enterprise level) does a great job at addressing this, and when you hear CEO's of open source projects that serve big clients say "services & support" this is what they mean:
If you're a big company that wants to engage with concrete5, chances are you're going to need some tweaks and additions. At the very least you'll be faced with decisions on how to implement it. Since it's open source and free and all, you're welcome to do whatever you want on your own. Hack the core and rebrand it, whatever you'd like - no legal troubles at all! What wise clients realize is "omg, if we mess with this too much we'll NEVER be able to upgrade!" Any CIO/CTO worth a grain of salt knows that you don't want to be running software that is abandoned and has no upgrade path. Your development team decided you needed to change the core for some reason that may or may not be accurate, but regardless you now have software you can't easily upgrade or even apply a security patch to. This is very very bad.
So there's actually HUGE incentive for companies to work with us on the big parts of their projects. Which suits us fine. We love solving complicated problems with people who know what they're doing.
Thats what we mean in open source when we say "services and support." Yeah, we're still billing by the hour, but we can charge a premium not just because we're clearly the most qualified people on earth to do the work, but also because if your project really does require stuff that changes the core, we're the only people who can fold that back into the core so your site won't be a forked legacy version.
So you can thank Clear Wireless for things like the improved sets UI in the file manager, or the ability to decentralize the dispatcher, etc. A lot of features to concrete5 have been added this way. You can think of it as philanthropy from companies "oh we like concrete5 and we need these features so lets give back and pay the core team to add this stuff"... you can also think of it as companies /choosing/ to give us the power that traditional commercial software demands... "We'd RATHER have the core team develop this stuff because we want it done right and we MUST be able to upgrade later"
Oh, and yeah add-ons. They help us get money outta the folk who think open source = free and just need to bang out a church site for under $100.
To be frank, we make more money today from non-services related stuff than we ever did when concrete CMS was commercial. Yay open source.
The other thing to bear in mind with any open source project is what they mean when they say "support." Let me paint it this way...
Traditional commercial software (at least at the enterprise level) there are two bills, the upfront license fee and then the ongoing one. Sometimes these are just annual fees (like sharepoint) sometimes the company have 'important' version updates they charge you for (MS Office) but almost always there's an upfront and then ongoing fee.
The upfront fee typically offsets marketing costs. You have to spend more money on guys in suits convincing you this is going to solve your problems, and the revenue for bizdev/marketing typically comes out of initial sales.
The ongoing fees typically cover maintenance and development. Software is a living thing, so if you dont keep giving it love, it dies a slow death as time leaves it behind.
Then there's a handful of other revenue streams - training, certification, configuration/customization services, etc. Often these are seen as afterthoughts that need to exist for the software sales to work.
With open source two things interesting happen. First your marketing costs are reduced, somewhat. Strangely giving away software for free still actually costs a fair amount of money, but you do have a larger sales funnel that requires less expensive hand holding because push comes to shove you can let folks try it for free. The second thing that happens is you make money on everything else. So Redhat makes a lot of money on training and certification, but if you want to get a copy of linux for free, you certainly can.
Regardless, when you pay for commercial software you're actually getting the promise you won't be abandoned. You can't mess around with the source code to MS Office, so chances are you can't break it that easily. If it doesnt work, and you're loud enough, you get your money back. Your copy will always be upgradeable, you're buying the security of not being abandoned with software you'll never get your data out of.
Now with open source, you DO run that risk. The up side is "we know whats going on under the hood." As a geek, I find that appealing. As a business person, I find that horrifying. All it takes is one sloppy developer in my business messing around under the hood, and I have a car that will never start again. I want to buy a solution, not a machine I can break. So to a business that is making money doing something else and just needs the software to work well for a long time, there's actually a lot to be said for leasing that car and never opening the hood. The downer is commercial software mandates you NEVER will open the hood, and requires you to muster the faith in that company that their car will ALWAYS start.
So open source (at an enterprise level) does a great job at addressing this, and when you hear CEO's of open source projects that serve big clients say "services & support" this is what they mean:
If you're a big company that wants to engage with concrete5, chances are you're going to need some tweaks and additions. At the very least you'll be faced with decisions on how to implement it. Since it's open source and free and all, you're welcome to do whatever you want on your own. Hack the core and rebrand it, whatever you'd like - no legal troubles at all! What wise clients realize is "omg, if we mess with this too much we'll NEVER be able to upgrade!" Any CIO/CTO worth a grain of salt knows that you don't want to be running software that is abandoned and has no upgrade path. Your development team decided you needed to change the core for some reason that may or may not be accurate, but regardless you now have software you can't easily upgrade or even apply a security patch to. This is very very bad.
So there's actually HUGE incentive for companies to work with us on the big parts of their projects. Which suits us fine. We love solving complicated problems with people who know what they're doing.
Thats what we mean in open source when we say "services and support." Yeah, we're still billing by the hour, but we can charge a premium not just because we're clearly the most qualified people on earth to do the work, but also because if your project really does require stuff that changes the core, we're the only people who can fold that back into the core so your site won't be a forked legacy version.
So you can thank Clear Wireless for things like the improved sets UI in the file manager, or the ability to decentralize the dispatcher, etc. A lot of features to concrete5 have been added this way. You can think of it as philanthropy from companies "oh we like concrete5 and we need these features so lets give back and pay the core team to add this stuff"... you can also think of it as companies /choosing/ to give us the power that traditional commercial software demands... "We'd RATHER have the core team develop this stuff because we want it done right and we MUST be able to upgrade later"
Oh, and yeah add-ons. They help us get money outta the folk who think open source = free and just need to bang out a church site for under $100.
The core team receives a modest %25 of all addon sales.
Which is one of the biggest reasons NO ONE should ever complain about addons costing money.
Franz and Andrew also offer very helpful services such as hosting, consulting, private support options, and custom addon solutions.
They do not have backing and have no current plans to that I have heard.
And lastly, I would buy the company (with backing if necessary) to keep it from ever folding. that's never going to happen. And I know I am not alone in that sentiment.
Chad