What does Software as a Service (SaaS) have to do with Open
Source? Not much, you might think. Or maybe you've noticed that the
FSF extended the spanking new GPL3 to the Affero Licence--to deal
with SaaS providers? It does not help Open Source Software makers
to make more money, so who cares? Well, OSS makers should
care, as SaaS may finally give them a business model that
may finally bring them some money.
Why does SaaS help? Because the folks that provide SaaS and the
OSS makers have the same genes.
Genes? Today we talk about SaaS as a new thing. It's not. Not
because it's the successor to Application Service Providing (ASP),
but because Hosters, Telcos, Internet companies and others have
been providing SaaS for at least 10 years. Who provides your
private email account, the web site of your baseball team, your
school, your company? You are most likely getting it from one of
these Service Providers, for free with ads or for fee. Dirt cheap
in any case. This lead to 10's of millions of Web sites and some
1.5bn hosted email accounts. Two reasons for that: The underlying
software has been built to scale and to support multi-tenant
environments from the ground up. And because it's Open Source
Open Source Software is free as in freedom and free as in free
beer. This limits commercial exploitation of the software. So far
the main business model for OSS makers was selling maintenance,
services and certifications with it. Only a few really make money
with this business model; Red Hat and Novell, maybe.
These limitations are from the main underlying OSS license, the
GPL (2,3, Affero) basically prohibits commercial exploitation by
the traditional means for the maker of the software, selling
licenses. But OSS does not prevent you from coming up with cool
services that everybody wants and to make money from it if you
build them with OSS. OSS allows for gigantic infrastructures that
were unheard of before--or for very low prices for devices. Famous
Open Source exploiters are Google, Yahoo, all Hosters like 1&1,
GoDaddy, Network Solutions. But also Apple with it's OS X, or
Hardware makers like Linksys, TomTom, Tivo.
They grab what they can get from the OSS community, tweak it
(because they can), add stuff to it and wrap it into a business
model that works for them. Like Google's AdSense, or selling
devices with services attached, like Tivo, Apple, TomTom. Most of
these companies make money and have an edge by using OSS.
Unfortunately the makers of the OSS pieces probably don't get a
penny. Try "Settings->General->About- >Legal" on your
iPhone. Life just isn't fair.
Here comes the plot: Why not combine the traditional OSS
business model with this Exploitation model to turn it into
something that also makes money for the OSS maker? Make the
Expoiters into customers--let's call them Service Providers from
All these Service Providers are used to using OSS. Their data
centers are full of it. Their people love it, live it. OSS is in
their genes. This is why Microsoft has such a hard time winning
this market. A Windows stack for hosted Exchange is like Outlook on
This gives OSS application makers an edge over the proprietary
vendors if they build their apps for high scalability and
multi-tenancy. These apps naturally have an OS stack as a
prerequisite, LAMP, LAMJ, LAMR, LAMPy, or what have you. This fits
nicely into the infrastructures of the Service Providers, giving
them the additional services to add to their product mix.
The one thing the OSS maker has to watch is the business model
that he uses. It needs to scale with the business of the Service
Provider or he will never make money. Revenue share with an upfront
fee to cover setup-costs will do, for both the OSS maker and the
Matching genes and some inter-dependencies make a true family:
SaaS Providers and OSS makers.
Rafael Laguna is the president and CEO of Open-Xchange
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