 I want to talk today about free software business models and What changed there over the last few years and the new challenge we are facing and Try to also discuss with you later on what the how a solution could look like to this challenge and to its changes So why do we talk about business models at all? I think that's really important because I believe that free software and software freedom is there for everybody So everybody should have it It's just a community thing for home users, but everybody also big and small enterprises should have software freedom And this means of course you want to conquer the world right and in the ideal world for us Everybody no matter if it's a home user or an enterprise could do all their stuff with free software and then have to use non-free software But this means that we it's not enough to just maintain the status quo just maintain the existing free software out there Which you might be able to do with relatively less effort But what you really want to do is you want to innovate and really compete with all the big non-free Software out there and if you want to innovate and really compete with them Then I think you need to find business models and a way to have also bigger free software Organizations which we can really innovate and take some time to invest into free software and build a product Until the stage where it can really compete So that's why I think free software business models are really important And if you look at the history of free software and what you have achieved until now I think that's already amazing because we have 75% of all mobile phones running free software at least to a large extent not completely but already to a large extent a Lot of IOT devices running free software All the top five fronted supercomputers running free software and also if you look at the cloud computing which Came up the last year's as infrastructure as a service especially all this Platforms running and free software to a large extent if you go to Amazon every operating which runs there is some kind of free Software and even an Azure there was a statistic which came out I think earlier this year that even an Azure these days more than 50% of all operating systems are some variant of a operating system So even on the Microsoft platform and free software is everywhere these days So you could imagine that or could think that it's a bright future and everything is fine But why still a lot of companies struggling to make money with free software these days? And I think if you look at free software business models you can go through three waves and three stages how it is involved over the time If you look at the beginning of free software in the early 80s, it's quite funny for me because How free software was invented from Richard Stallman back then he doesn't care about making money or business model He just want to give freedom to the people But still when he started with his group project he immediately quit his job at the MIT Because he wanted to avoid that some of the organizations can claim the copyright and claim his work for them So he quit his job so that he can work on free software and building free software and then of course right at the beginning face the problem how to Make money to pay my living and back then it was relatively easy because Many people didn't have the internet connection the internet connection was super slow So a valid business model was to just to put the free software on tapes and later on CDs And then sell these tapes and CDs to the people Who want to have free software and then they can order it by you and you send it to them And then they are happy to have this free software and this work quite well There are a lot of companies We are created this way also all the Linux distribution Red Hat Suze and if you back in the 90s if you go to a computer shop You've got all the boxes with the Linux the distributions also stuff like Debbie and more community driven distributions all were packed up in Nice boxes with a handbook and CDs and you can buy them and this was a valid business model for many companies this even grow that far that Red Hat become this way the first one billion free software company they become really big with this and Then if you think about red hat we already see the first shift in this business models because for me one keystone was 2003 at an early 20,000 years when red hat decided that it's no longer a valid business model to sell home use or end user desktop operating system so they stopped selling red hat as a desktop operating system and Transferred us into fedora a completely community driven distribution and they started with what I would call a second wave of business models They started to selling services around the software So they concentrate and they start to concentrate more on the big enterprises Which are where in this stage and building up more and more service because they had to use or provide more and more Services in their own organization, but also for people outside So there's a number of servers grow and the number of services grow And they needed all the software and you could sell them all the services around it the SLA is long-time maintenance The custom development all the thing you can think about you could sell to them And this made red hat really big and this worked for for quite a long time as a free software business model but then at some point the third wave started and everything moved to the cloud and So But you see today that more and more organizations if they think that the number of services they have still grows But if they are the point where they have to set up a new service in their organization They Consider or think about do we do this on our own hardware in our own servers? Or do we go to any infrastructure as a service provider and rent their our infrastructure and If they think about it, they will notice a lot of benefits if they go for this infrastructure as a service providers Often this is way cheaper You can easily scale it because you don't buy real hardware you just buy this virtual hardware So you start just with one set up you think works for your service And if you realize you need more RAM more CPU power more storage You just go to the control center do a few clicks and you have what you want You also don't have to care if something breaks if a hard disk breaks or something That's all abstracted away from you. You just have your platform Configured away you need it and it just runs if you need to move have more redundancy Security backup strategy everything you don't really have to care They provide you all the services around it and all the the functionality So you can really easily spin up your infrastructure, and then you put your service on top of it So from a company who are looking into the next service They want to deploy this often sounds like a really nice idea Beside the obvious and questions if you ask yourself where my data stored who has control about it But that's often things they think about in the second or third step or many companies unfortunately Don't think about this at all But a big drawback about this is If you think about the companies behind The software they are using on the cloud infrastructure now because this infrastructure service provider are large Organizations so they have the people to run the software and to make sure that this runs really smoothly And this is scalable and this is secure They even don't care if this is licensed under strong copy left license because that's not their Their value they are selling so they are happy to comply with an HGPL and give all the people the source code and the rights It's given by the HGPL. That's no problem for them They even don't have a threat of forking So if really the license changed in a way where they really don't like it They even ready to fork the software and just do it by their own and this creates a big problem in my opinion because This infrastructure service companies are so huge and have this manpower knowledge They will not buy a subscription from from from red hat from Susie from a database vendor from whoever because they say we have the people We know we can run this safely securely We don't need your all your service you're offering anymore And if they don't need a service then the customer of the infrastructure service providers also no longer need a Subscription because they say why should buy a red hat subscription this infrastructure service provider already provide me all the Infrastructure and they take care that everything works and nothing breaks So nobody any longer goes to the service at the companies behind the software and buying one of their services Which makes many companies big in the past? So when this happened you saw for a few first reactions from many companies One reaction was from Redis and they introduced the comments clause which changed the license a little bit Make it actually non-free. So he said you still have a lot of the freedoms given by free software But you are now longer allowed to use this as a commercial service and do no consulting and support around the software So this way they try to avoid that this big Cloud companies can take the software and provide the services But if they want to do it they have to come to them and try and ask them for different license pay them some money to get to get an exception or the License to do it But of course what has happened start this way it the software turns into non-free software and it not only hurts this big Cloud companies which was intended but it also hurts the whole free software ecosystem around it because if you look in your Local areas. We have a lot of small consulting companies these days Which also offers consulting around various free software components and they are also all hidden by this clause They also no longer can provide the services So you don't only do you have many drawbacks you turn this into non-free software and you heard the whole free software ecosystem around it Another approach was from MongoDB. They created the server side public license and what they did basically is they they took the htblx and extended the aspect of copy left So they said okay now copy left is not only about all the derivative work of our software But this means all the software you need around it to run the services So if you have this in your cloud infrastructure There's also the operating system the database your backup system your monitoring system Everything is subject to our new license and if you want to our software We have to reach all the stuff is free software and this way they wanted to scare away the Cloud providers to use their software or again ask them for an exception and pay for it And again, this turns the software into non-free software and also legally it's a huge questions if you can even Enforced this rules because this are really broad rule. So the chance is also high that you will never be able to enforce this rules And the third license which came up over the last two year one two years is the confluence community license Which also just prohibit the use of the software as any service which has the same problem as the the reddest changes So what does this mean at the end? So if you look at this license changes, of course the two obvious outcomes are they succeed with these changes or they fail with These changes. So if they succeed with the changes, they can secure their company and their business But we will lose all the free software and all the ecosystem. So that's obviously bad for the whole free software ecosystem The other thing is if they fail with this license changes and the cloud provides will not care about it then of course they Cloud provider can go on happily But we will lose then all this company behind the software which will hurt our ecosystem immense in my opinion because who will develop all this Databases infrastructure Distributions who will work on this if the companies behind it have a problem to to make money with this business As I said before they are ready to fork also some projects And they might be able to this is one of two but they will never be able to fork the whole stack and carry this on by their own So I think they will also create a problem for the self in the wrong run this way Another thing which I thought was already on the way to dying Is the open core business model? But I have the feeling that this now in this new situation also came up a little bit again There was even a huge open core and conference this year in the US Well, a lot of people gathered together to describe this as the new Future of free software business models, which I think is a bad idea because open core your business model is not a free Software business model is a non free software business model because all the money you make you make it with non free software And the free software is just a byproduct and this also that's a lot of wrong intense Intentions to the to the company because if you make the money with the non free part You all have the incentive to to shrink the free part and increase the non free part because that's where you make money You also often scare the community away because if someone from the community comes And implements a feature which is available only the non free part as free software Then of course you have to forbid them to merge this into your main branch because otherwise you would hurt your business model And your your product you are selling so this hurts free software and the community in many aspects And I find it sad that with this changes I have to think that this is a little bit on the rise again another approach which is completely different is because Compared to all the other approach at least this ends at the end of the road to free software that's what Maria DB said they said okay, we have a license and It grants you a lot of freedoms, but the author of the software is allowed to play some restrictions in it and For you my rear DB place this restriction that you can create a database cluster mid up to three notes But not more but there's a termination clause in it So the restriction has to end at least after four years you can also reduce the time as Author, but you can't increase it so for you is that the maximum you can set and after the four year The software will turn into free software by default as it into the GPL license But as a author you can also define another license. It just has to be GPL compatible So at least that's I think that's also by far not a good solution But at least that's a solution where at the end of the road we end up at free software again. So maybe that's the best Middle ground we have at the moment. Also, I think we should need to seek for for better solutions But now I talked a lot about negative stuff and about how people try to work around this new world But there are also positive examples for example this year and chef announced to release all their complete software And they even were so optimistic that this works for them that they even decided to not choose a protecting free software license so they go went with the HL with the Apache license and If you read the announcement, there are many great quotes in there I now pick this one But I think from the mindset they are definitely are on the right track here And I really hope for them that this works out because this would then be a counter example to what all the other companies experience at the moment so my question at the end Do we need free new free software business models? And of course if we need free no new free software business models, then the question is How do they look like? How would the future of free software business models look like? Are we going back to more of the small decentralized Consulting companies might be an option. But then as I said in an introduction, I feel that we are losing The innovation part to then with small consulting companies We may be able to maintain existing software But can we innovate and compete with the big non-free software companies and can also come up with the next new innovation or even keep up Just keep up with them. I think that's really hard Maybe that's also one of my hope. Maybe the infrastructure service providers out there might at some point realize that what they are doing Is hurting their business model in the wrong run as well because if all these companies behind the software they are using have struggling to making money and maybe I'm losing the The whole company goes down Then at the end they will also have a problem because they will also lose the software, which is the foundation of their service They are offering so maybe they will realize early enough that it's also a problem for them And then decide that they find a way to share the revenue also with the projects they are working on Or there are complete free new free software business models out there And of course the whole questions the main question if you think about free soft mode models is always What value can I as a company add to a free software solutions? Because I need to find something others are willing to pay for I think that's always the challenge Maybe one suggestion. I also read in the last few days is this was I think also an idea for a Comment from from chef from the CEO there that he means that the main value You can add and where you can also outperform The cloud providers is that if you have a your company will build a software is real innovative and have a fast development With many new features coming in all the time and then you are the marking leader No matter what they what they are and they will always come back to you because you are the most innovative one and the one with most features maybe that's the way but I Also see some problems there if this becomes a race where everybody then tries to run faster and at some point You come to a limit right and then what happens then So this was my summary. So I'm also curious to hear about from you What do you think? Is this a real problem? Do you see any solution to it? Thank you very much