Building a Business Around Open Source

A recent article on the O’Reilly website recaps a Twitter thread by Adam Jacob (co-founder and former CTO of Chef) with comments from Nat Torkington about Chef’s switch from an open core model to a Red Hat model for licensing software. 

As background to the discussion, the article states, “Amazon and other cloud providers have taken the free software without paying (after all, it’s free, that’s the point), and offer it in their commercial cloud products “as a service.” There’s nothing in the license to prevent this; after all, you can download and run the software without charge.” In response, some open source companies have made changes to their licensing models that in effect make their software less open.  

Other companies, however, have taken the opposite approach. Chef, for example, recently made all their software available under the Apache 2.0 license. Under their approach, you can download, use, and redistribute their software as usual, for free, but the company retains the Chef trademark. As the article says, “This model is comparable to Red Hat’s: all of their software is open source, under the GNU Public License.” 

In the Twitter thread, Jacob says, “For people wondering if switching to the red hat model has worked for chef - super yes.” 

He adds, “If you’re on the fence, don’t be. Do it. It wasn’t a fluke of the market, or some special thing only RH knows how to do.” Briefly, he says, you have to do the following:

  1. Produce a product based 100% on open source code.
  2. Be the sole distributor of that product, based on your trademark, under whatever commercial terms make sense for your business.
  3. Encourage and collaborate with folks who want to build alternative distributions.

Read the complete article at O’Reilly.