Re: Open-source or closed-source for SaaS?

On 16/01/2012 3:09pm, Alec Taylor wrote:
> Initially I was going closed-source all the way, or at least until we
> have a good reputation, and open-sourcing will only improve that rep.
>
> Recently though, I've been thinking about open-sourcing the entire solution.
>
> Various popular SaaS solutions have open-sourced under AGPL and are
> generating revenue. For instance, Gitorious
> (http://gitorious.com/subdomain) is AGPL but they make profit. OpenERP
> as does OpenERP.
>
> I am building an ecommerce solution, and am considering offering free
> use of part of the system, pay per/month to use the entire system.
>
> By making the solution open-source, couldn't a competitor just
> download my project and offer it at a cheaper fee per/month?
>
> If I open-source, will that increase or decrease my revenue?

I think it depends entirely on your revenue model. Pay per month looks
like the only revenue you mention so you would shoot yourself in the
foot by open-sourcing if that is all you are planning.

Open source just means that whoever buys/uses your code is entitled to
have the source so they can modify it to suit themselves if necessary
and/or maintain it themselves in your absence. It doesn't necessarily
mean you will permit them to use your own Python-encoded intellectual
property for free.

What is your long-term exit strategy? Will Google buy your company for a
few billion? If so, maybe you should keep the source under wraps and
charge zero for your SaaS. That is - if Google are in that market ...

Cheers

Mike

>
> To reiterate my question: Should I open-source the project, or keep it
> closed-source?
>
> Thanks for the advice,
>
> Alec Taylor
>

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