Open Source Business Models

Last modified on August 30th, 2009

I’ll be going to BarCamp Vancouver in October, and one of the sessions I’m thinking about trying to organize is one about open-source business models. Given that BraveNewCode releases several open-source, GPL plugins, this is an area that I’ve been spending a lot of time thinking about lately.

Truthfully, our WPtouch plugin represents well over a thousand hours of work. For a while there, Dale and I both dedicated the majority of Fridays to updating and enhancing our plugins, including WordTwit. And while donations on these products are great, truthfully the amount received is only enough to buy a bit of beer now and again, and not enough to even come close to financing these projects directly.

Obviously, our plugins have a lot of indirect benefits, such as increased exposure of our website and allowing us to be further involved in the community. But I believe there are ways to continue to do that as well as make the development of these features sustainable from an economic standpoint as well.

One model that many people seem to use is to charge for support. I’m not opposed to that option, but I’d be interested in how successful that is. Some people have a membership section of their website where they offer additional add-ons. Considering plugins and themes are both GPL by definition, those add-ons would need to be GPL as well.

Contrary to what many people think, the “free” that goes along with GPL is related to freedoms, not price. So there’s absolutely nothing wrong with charging money for a GPL plugin. That being said, the purchaser of the GPL software is then entitled to do whatever they want with their purchase, including giving it away to friends and repackaging it up and selling it themselves. That makes it difficult to sell your software as a product unless of course you tie it to value-adds that only can be received from you (such as technical support).

The only real example I can find of any WordPress plugin that uses an alternate model but still respects the GPL is the Shopp eCommerce plugin. You have to pay to purchase the plugin, after which you receive the plugin via a download link. Support is included in the cost of the plugin, as are periodic updates. Some of the secret sauce that they’ve added is their own auto-update mechanism (outside of the WordPress system), that uses a registration key to activate — I’m told that you can still download the updates yourself from their website (by logging in with your credentials), but I imagine most people would use the auto-update mechanism.

A few people at the Tweetup on Friday suggested a good model might be to have two versions of plugins, one that’s released normally and freely available to everyone, and one that’s purposefully targeted at corporate/professional users, which would be purchased online, similarly to paid GPL themes. With regards to the latter, it should be noted that Automattic has recently added a commercial theme directory to The themes listed often require a payment to download, and some require memberships. But the themes the end-user purchases are all GPL compatible, and as such are endorsed by WordPress.

Another movement I’ve been debating initiating is donations for all plugins used in commercial projects. Obviously this isn’t a requirement of the GPL, so it would be a community-specific approach. But given that a commercial WordPress project often involves five to ten plugins on a routine basis, I think it’s reasonable that commercial use of plugins be given a donation in relation to the size of the project. For example, perhaps the community would encourage a voluntary donation of 1% of the total project price back towards the plugin authors. So if it’s a $20,000 project, $200 of that would go directly back to the plugin developers on a voluntary donation basis. Currently that would involve manually going to various different plugin donation pages and manually making a donation, but I could envision a system in the future where those fees would possibly be proxied via a third party, allowing for a one-click payment system.

If anyone has any other ideas, please feel free to drop a line. Obviously plugins and themes are important for the success of WordPress and other open-source projects, and I think it’s important that sustainable models (other than donations) are eventually embraced by individuals and end-users. While some plugins/themes are developed out of the pure joy for the project, others require substantial time and dedication to continuously improve and update them. So I’m definitely interested in seeing some real-world examples of open-source GPL projects that have demonstrated sustainable business models.

One response to “Open Source Business Models”

  1. Andrea_R says:

    I like the 1% approach.

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