usSome people, when hearing about free open source software (FOSS) find it hard to understand how you can make a living from it, when by definition it is freely available.
The reasoning goes that source code is intellectual property and therefore the way you make money is akin to inventing a gadget -- take out a patent, get it mass-produced, and collect percentage on every sale. This is how Microsoft makes its money from Windows and MS Office.
However, as we can see from the decision by the Johannesburg Stock Exchange's decision to move to Linux, FOSS is not merely for tinkerers and hobbyists.
But to understand the power of Linux and free open source software in general, we need to make the following distinctions:
1) Making money from something vs. making money with something
2) Patent vs. copyright
Making money with or from something.
In the world of proprietary software you make money through software vendors, e.g. retail stores, online stores. The software is packaged and sold as a product. The makers of the software receive a percentage of each sale. All pretty straightforward: they make money from the software.
In the world of free open source software you don't profit (or profiteer) from selling software, because it is typically freely available as a download to anyone with an internet connection. (Or in the case of Ubuntu, anyone who requests a CD) So, in order to make money, you have to provide a service to those wishing to use the software. The greatest example of this method is Red Hat, which makes its operating system freely available and offers its expertise in configuration and technical support. What makes Red Hat truly remarkable is that it competes with its own fully functional free product. This stands in contrast to giving a limited version of your own product and offering the full version as part of a complete package. According to the New York Stock Exchange, Red Hat is doing just fine, making its money with, not from, its software.
Patent vs. Copyright
Until the late 1970s, the idea that the source code to software could be considered intellectual property was almost non-existent. However, by the 1980s this notion had taken hold and the earlier practice of including source code with software had effectively become extinct. Thanks to the efforts of influential persons like Richard Stallman and Linus Torvalds, and the combined contributions of millions of enthusiasts around the world, there is an entire eco-system of free and open source software, which benefits all computer users, even those who do not use free software.[firefox story]
As we can see from the news about the Johannesburg Stock Exchange, free open source software such as Linux can be used to create salable software such as the Millenium Exchange. However, this does not mean that the makers of Millenium Exchange have a patent on the algorithms upon which this system is based. Rather, they own the copyright to the system itself and the brand that they have built up. A very simple illustration of this difference is that no-one in his right mind would say he has a patent on the concept of a blade with a handle, but Victorinox most certainly has the right to determine whether a swiss army knife may carry its logo, because it is the copyright holder of the Victorinox brand.
And here at Clockwork PC, we put this approach to software into practise. All of the software we use, from the operating systems (Ubuntu and Puppy Linux) to our browsers (Firefox and Chromium), from our video editors (Openshot and Kdenlive) to our media players (Rhythmbox), all come from the eco-system of free open source software. We donate to these projects when possible and contribute feedback and reports. But we do not sell software and encourage our clients to weigh up the respective benefits and costs of free open source software vs. those of proprietary software.
Sometimes proprietary software is the best option for a business, but increasingly, thanks to the rapid advance of free open source software, this is becoming less and less true.
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