Customer has a problem that needs someone with a specific skill to fix it so they pay someone to do it.

This is not making money from open source, nor would it be making money from proprietary code.

Its making from from providing a service, that is what Red Hat is doing, they are not making money from open source, they make their money from doing computer systems maintenance.

Just as a cleaning company makes its money from cleaning toilets, not by giving away free toilets in the first place.

The problem with this model is if you make your “free” giveaway too good, too stable and too easy to maintain you lose your income stream from the support and maintennce.

It would be like giving away free self cleaning toilets, and hoping to make your money cleaning them. Ofcourse they clean themselves so you go broke.

But if you give away toilets that get dirty easily, and require skilled people to clean them, you have a sort of business model.

But its not based on dirtry toilets, its bassed on cleaning them.

Red Hat is not based on Open Source, its based on fixing Open Source, mearly consultants.

You can either manufacture cars that dont break down, and make your money from selling them, or you can make cars that **DO** break down and make your money from fixing them.

Most of the world have chosen to pay for quality, as opposed to free crap. The market has spoken. But FOSS is unable to listen or understand.

I appreciate businessmen who many times can see basic facts of life. Idealists must understand that even open source movement needs some money to keep going. On the other hand we know that e.g IBM tend to use open source as a weapon against Microsoft. But someday even MS could start support open source. Really? Why not. If IBM is now “good” so why won’t MS make a shift?

M$ has a few thousand developers. Floss has more than ten times as many.

M$ has about half as many servers on the web as GNU/Linux.

Lots of places have little networking thingies like routers that run GNU/Linux.

Lots of places install their servers with GNU/Linux in-house, off the radar.

On the LAN, I think many folks run 2003 for AD but many find GNU/Linux works well for file serving/local web apps/storage/printing. Now that Samba can do AD stuff thanks to the EU, this will change rapidly.

The client space is where GNU/Linux has a problem/opportunity and that should cause change very soon in the downturn. Folks re-newing and trying to squeeze every penny whether in emerging markets or old markets are going to really give GNU/Linux a try. For individuals/smb GNU/Linux can work well out of the box. For the huge business with huge lock-in it is not so clear but I expect those businesses who tolerate diversity in IT by giving autonomy to subdivision to migrate to GNU/Linux if it works for them will see moderate results on the bottom line. The longer the downturn the more this will happen. The old ways are just not sustainable unless you make tons of money no matter what you do.

But The VAR Guy says this:
1. SUSE Linux, as a standalone company, would likely be about a $150 million to $200 million operation right now and publicly held. But it’s owned by Novell.

2. MySQL would have pursued an IPO at some point but got acquired by Sun.

3. Alfresco, Digium and SugarCRM (among others) all hope to launch IPOs at some point (The VAR Guy believes) but the economic crisis has prevented such moves.