Open Source as a Business

How do you build a lasting and successful company that also stays true to its open source roots? This talk takes a look at why open source is important to business and three essential elements of this path:
* Strategy: How can you monetize your open source product? Is it support, an open core approach, cloud services, or a combination of the three? And which ones are the features you can even commercialize without alienating your community?
* Struggle: "You received a 100 million dollars in venture capital and yet you have so many open issues?!" Once money is involved the dynamics often change. How can you manage expectations and still build on a flourishing open source community?
* Success: How do you balance open source and commercial success? How do you align engineering and sales decisions?

This talk takes the perspective of Elastic, the company behind the open source products Elasticsearch, Kibana, Beats, and Logstash, which makes its money with support, the commercial X-Pack extensions, and cloud offerings. But we are also taking a look at how others are approaching this challenge, what worked, and what failed.

Transcript

1. Open Source as a Business Strategy, Struggle & Success Philipp Krenn̴̴̴̴̴̴̴̴@xeraa ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
2. [...] allow software to be freely used, modified, and shared. https://opensource.org/licenses ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
3. Who is using OSS? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
4. Who is opening issues? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
5. Who is contributing back? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
6. https://twitter.com/ geowolf/status/ 971811346823221248
7. Ninety-eight-point-five percent of the code ever put into the core of Puppet was put in there by somebody I paid. https://www.geekwire.com/2018/might-time-big-cloud-share-wealth-open-source- startups/ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
8. Open Source ≠ Business Model ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
9. Developer ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
11. Where is the !"# ? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
12. Agenda Strategy Struggle Success ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
13. Strategy ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
14. Services Support, Consulting, Training, Certification ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
15. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
16. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
17. https://investors.redhat.com/~/media/Files/R/Red-Hat-IR/documents/q418-fact-sheet.pdf
19. Support Problem Ease of Use ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
20. Support Problem Renewal Rates ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
21. Service & Training Problem Consulting-Only Competition ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
22. Open Core ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
23. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
24. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
26. Problem Competing Tools ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
27. Problem Cloud Providers ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
28. Problem Lock-In ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
29. Cloud Service ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
30. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
31. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
33. Problem Cloud Providers ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
34. The intent of open source software was not so that someone else can take the exact same software and offer it as a service. https://www.geekwire.com/2018/might-time-big-cloud-share-wealth-open-source- startups/ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
35. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
36. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
37. Partnerships ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
38. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
39. Donations ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
40. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
41. For Patreon/donations to be a viable business model, have to put in just as much work as you’d have to do selling services/product, likely ending up w less from donations You can point to donation models that had it easy & I can point to traditional businesses that got lucky too https://twitter.com/sehurlburt/status/1036091578060656640 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
42. Certified Partners ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
43. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
44. Ads ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
45. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
46. Merchandise ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
47. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
48. Bounties / Crowdfunding ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
50. Struggle ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
51. Contributors Users Consumers ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
53. [...] Amazon, on one hand, bashes the open source ecosystem and highlights the advantage of its own tools, while at the same time taking projects like Presto, which was developed in the open by Facebook, and turning it into a packaged, revenue-generating product (the newly announced Athena service). https://dzone.com/articles/did-amazon-just-kill-open-source ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
54. [...] If you are MSFT and I ask you if you’ve used Redis and you say "you mean Azure Redis Cache?", that’s not a good sign. https://twitter.com/jensenharris/status/984268950136537088 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
55. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
56. RedisLabs Modules: AGPL Apache 2 modified with Commons Clause RediSearch, Redis Graph, ReJSON, ReBloom, Redis-ML ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
57. Without limiting other conditions in the License, the grant of rights under the License will not include, and the License does not grant to you, the right to Sell the Software. https://commonsclause.com ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
58. Commons Clause Still Open Source? Why not AGPL? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
59. Confusion CC Apache 2 modified with Commons Clause ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
60. Some rabid open-source wonks accused Redis Labs of trying to trick the community into thinking that modules were open source, because they used the word “Apache.” https://techcrunch.com/2018/09/07/commons-clause-stops-open-source-abuse/ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
61. Be aware that the debate starting up about the Common Clause license due to Redis Labs adopting it will likely be heavily tainted by large corporations who have a lot of free labor to lose suddenly pretending to be huge champions of free software ideals. https://twitter.com/taotetek/status/1032248562116186112 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
62. Redis: BSD "Redis will remain BSD licensed" http://antirez.com/news/120 "Redis is not "open core" http://antirez.com/news/121 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
63. Philosophy ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
67. If you are claiming your startup/company is open source and you aren’t contributing to some form of upstream... then you aren’t really. Sorry not sorry. https://twitter.com/jessfraz/status/954802380125736961 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
69. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
70. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
71. If you’re unhappy with an open source project you’re entitled to a full, immediate refund to the $0.00 you paid for it. Alternatively, get involved with the project to make it better. https://twitter.com/MikeMcQuaid/status/970000490468708352 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
72. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
78. Venture Capital Accelerated Development vs Business Dynamics ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
79. Where is the ☢⚠☣ ? ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
80. Development Hobbled Product vs Starving Company ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
81. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
82. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
83. Releases Multiple Products vs Proprietary Plugins ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
84. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
85. Open Open Source vs Open Code ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
86. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
87. Elastic's Strategy ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
90. All Code Open Not Open Source — Apache 2 & Elastic EULA ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
92. Training Consulting ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
93. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
94. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
96. https://elastic.shop
97. Success ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
98. Business Is Optional ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
99. ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
101. Business Is Complicated ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
102. It saddens me that closed source companies are acclaimed for merely putting a piece of code on GitHub, while commercial open source companies get the worse shit for any action that involves protecting their work. https://twitter.com/icecrime/status/1032155227368185856 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa
103. Questions? Disagreement? Philipp Krenn̴̴̴@xeraa ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴@xeraa