Top Commercial Reasons Why Open Source Communities Matter

I’ve yesterday had a conversation with the CEO of an Open Source company who sounded rather frustrated when I discussed the importance of nurturing Open Source communities. He said:

People seem to think they have a right to free software and free support. It is not about free speech. It’s all about free beer!

I don’t think this blanket judgment is true. There have always been freeriders in Open Source communities, but the overall benefits of an Open Source community to an Open Source business always outweigh the community loss imposed by freeriders.

Here are the top commercial reasons why Open Source software vendors should invest in community development:

  1. Better sales lead generation: A growing Open Source community translates into a growing sales pipeline if done well, i.e. OSS vendors can monetize a part of the community user base and convert them to commercial users.
  2. More effective sales: Community-driven sales requires less effort compared to a direct sales approach, because potential buyers have already evaluated the Open Source product and contact sales only when they are ready for a purchase.
  3. Raise visibility: A vibrant Open Source community fosters branding and word-of-mouth marketing.
  4. Build a Brand Community: Open Source brands grow and thrive around real value created by a community of engaged, informed participants. A healthy community adds tremendous value to almost any activity a company engages in.
  5. Larger install base: The goal is to build the corporate brand as well as product and service quality by creating a larger install base.
  6. Cost-effective marketing: The larger and the more active an Open Source community, the more it helps to spread the word and the less investment in marketing is needed to achieve the same level of visibility.
  7. Higher credibility: A growing Open Source community helps companies to be perceived as a true Open Source vendor by journalists, analysts and potential customers. A critical mass of community members also indicates how well a product solves a problem and that there is actual demand.
  8. Cost-efficient and competitive business: Commercial Open Source offers the best cost-benefit ratio for enterprise customers due to cost savings, innovation and investment protection enabled by a vivid Open Source ecosystem that contributes bug fixes, new features and more.
  9. Investment protection: Reduce client risk by broadening the base of product-related skills.
  10. Test and develop new markets: Open Source offers companies and organizations a highly cost-effective route into international markets. Through community development tactics, OSS vendors can test and develop new markets and communities with little upfront investment.
  11. Externalize 1st Level Support: Enable community to help themselves share information, to reduce support burden for the OSS vendor on basic issues.
  12. Technology and thought leadership: Community development will help to establish an OSS product as a technology leader in the space by attracting external developers. Based on that, OSS vendors can through appropriate communications also become a thought leader.

9 thoughts on “Top Commercial Reasons Why Open Source Communities Matter

  1. Hi Sandro,

    nice list!

    I am surprised to read that the CEO is worried about freeriders, but then it might be that we have different definitions of “community” when it comes to OSS. I would argue that an OSS vendor’s community is only relevant when they include committers from outside of the company. In order to achieve that an OSS vendor needs to swallow something that might go down even harder than freeriders: loss of control.

    This is related to your point 9: I think that it is only the community that provides protection of investment, because a community that is external to the vendor cannot be taken over.

    Coming back to the freeriders: I think a regular OSS community has tens or even hundreds of freeriders for one committer. So their presence is nothing to worry about but just a necessity to get a committer in the end.

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    1. @Michael: Thanks for some great input! Your points made me think about the following questions: 1) What would be the proper criteria to define a valuable community? Valuable to whom? What would be a healthy ratio between “just” users and committers? Are you just thinking of code committers or various types of contributions (e.g. answering questions on forums or mailing lists) 2) Can freeriders be converted to committers, how? I will let these thoughts keep spinning in my head. Perhaps you already have some answers?

      @Gerv: Totally right! I reckon he is disappointed that the community has yet not had any significant impact on revenue.

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  2. Your CEO needs to distinguish between the “free software” and “free support” parts of his complaint. Having people using the software for free doesn’t directly cost him anything. Having people using his support services for free does. There is no community loss from “freeriders” who are just using the software. On the contrary.

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  3. Sandro,

    good questions! I have to think about them, but some comments right away
    1) one could probably find out what a healthy ratio is, by looking at a project that you consider healthy and counting the email addresses on a user mailing list (and comparing them to the number of committers)
    2) in order to attract committers it helps if the project clearly communicates that they are looking for some. Also, it helps a lot to clearly state the process how one can become a committer (see what the ASF does)

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  4. Hi Sandro!,

    great post. I would like to make some comments.

    You said:

    but the overall benefits of an Open Source community to an Open Source business always outweigh the community loss imposed by freeriders.

    I would say: which loss? I mean, should we even speak about a “loss imposed by freeriders” in the era of the attention economy?

    Free software reduce the costs to get attention, and community development reduce the costs of keeping and increasing that attention.

    If a community is formed only by freeriders, it means that no value is being offered to them so that a percentage become customers.

    Don’t blame the users, blame yourself because of not being able of offering value to them.

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    1. Hi Javi!

      Speaking of community loss, I meant it in terms of the freerider problem as outlined by Pareto:

      If all individuals refrained from doing A, every individual as a member of the community would derive a certain advantage. But now if all individuals less one continue refraining from doing A, the community loss is very slight, whereas the one individual doing A makes a personal gain far greater than the loss that he incurs as a member of the community.

      You are of course very right in pointing out that the attention economy plays by different rules very much the same as an economy of abundance – both are at the heart of any Open Source business model and related marketing efforts.

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