If you’ve ever thought there wasn’t any money in open source, think again.
I remember back in a television production class back in college, a classmate of mine joked about public television not having any money. My professor jumped in the conversation to set the record straight. The truth of the matter is, public television — aka: not for profit — has plenty of money behind it.
So it goes for open source.
WordPress
There are plenty of companies running a business model that would never give away a platform that powers 70 million websites (35 million a year ago).
Think about it. At $1 each, that would come to $70 million!
Give it away? For free?
The company behind WordPress is Automattic and despite giving away their platform, they have become an extremely profitable company. This year, Automatttic is expected to bring in $45 million in revenue . Not bad for a company that has 106 employees.
“We march a little to our own beat, and sometimes it’s out of sync with Silicon Valley — and that’s been to our advantage and disadvantage,” Automattic CEO Toni Schneider said. “We don’t get sucked into the latest thing, while some of our competitors are distracted by the latest shiny object. The disadvantage is sometimes we’re against the grain of what everyone else is excited about, and people ask ‘Why don’t you have x yet?’ — but we go at our own pace.”
So where does the money come from?
Automattic makes their money from premium subscriptions and VIP services for their half million customers.
Ah, yes. The riches of open source.
[via All Things D]
Raoul Snyman says
While I appreciate and applaud the time given to open source software, I do like to see a little variety. Most of your posts about blogging, open source or design are about WordPress.
As they say, a change is as good as a holiday!
Raoul Snyman says
For example, RedHat is worth WAY more than Automattic/WordPress. They are the first open source company to hit over US$1 billion in annual revenue.
Raoul Snyman says
Oops, forgot the link: http://www.wired.com/wiredenterprise/2012/03/red-hat/
Eric Dye says
I figured you knew what you were talking about, even without the link — LOL!
Eric Dye says
Right, again!
Eric Dye says
Agreed. We would always welcome some guest posts from you, too. A great way to make a few bucks and give yourself a little SEO juice for your Christian open source site. 😀
Trey Gourley says
I agree that people write off open source software far too often. Whether you are WordPress, Redhat, Microsoft, Facebook, or Twitter it comes down to how to get revenue. Free for free’s sake gets a company nowhere. Whether revenue comes from the direct sale of the product or through secondary services/advertising, revenue is key to a company’s future.
Eric Dye says
True story.
Eric J says
Correct me if i am wrong but wordpress makes money off of their proprietary non open source services like akismet, and their hosted platform?
Eric Dye says
Yes, indeed. “The company behind WordPress is Automattic and despite giving away their platform, they have become an extremely profitable company.”
They have several products, in addition to the WordPress.com upgrades.
Eric J says
Hey Eric the point i am trying to make is that they are not making any money off of their main open source software. What they have done is built a large platform and then are able to sell proprietary services around that platform at a cost. Just like Raoul mentioned Red Hat which makes money off of support contracts.
I love open source but as far as i can tell you have to make money around the product instead of with the product does that make sense?
Eric Dye says
YES! Gotcha. This is like Twitter, Instagram, etc … building a free product, but finding ways to profit around it oppose to directly from it.