Second Time Around: Open Wallets for Open Source

Venture capitalists are flocking again to open-source.  The NY Times, in a recent article, notes, "In 1999 and 2000, according to VentureOne, venture capitalists invested $714 million in 71 open-source companies. Most of those projects collapsed." Have the VCs "lost their minds again"?

Morro Bay sunset, D LeRoy. Flickr

Things have changed. There is increased adoption of open-source in the corporate world. Red Hat seems to be a success. Linux is here to say. And a significant number of open-source applications are beginning to blossom. We need a taxonomy of business models for open source. No. There are no new business models. But there are variations and creative ways of bundling products and services.

A recent entry SpikeSource (with Kim Polese as the chief executive) has garnered a lot of attention. What's their business? A better name for the company would have been "GlueSource": they see a market for a third party to "glue" together and harmonize the variety of proprietary and open-source software. Kim Polese: "We see ourselves as the go-to company for interoperability issues."

SugarCRM has a different take on open source. They offer two different versions of a CRM solution. Note that what they are offering is not two different licenses for the same product. I haven't quite figured out this one yet because the price for their "Professional" version is quite steep (roughly $250 per user per year). The Professional version is described as a  "superset" of the basic version, which is open source. The professional version is not open source but "visible source". That's the first time I have heard that one. I guess it means I can look at the source code. I guess there is some good in that, but what is it?  Is SugarCRM make believe  open source?  As I said, I haven't figured this one out yet.