Setting Up Shop: The Business of Open-Source Software

oftware companies face many challenges in growing their businesses. Product lines must evolve—new products and add-ons to existing products are essential to bring in new incremental revenue. Product quality must be monitored and improved. Engineering must support current and older releases while still driving innovation. Employees must be motivated by interesting opportunities and more than standard incentives. Many companies must also recruit third-party developers and integrators, who in effect help sell the com-pany's products by increasing their value to customers. These software business challenges are interconnected in two ways. First, most if not all are functions of constrained resources. Few companies have enough people , money, or time to do everything that needs doing, especially when competing against larger companies with greater resources. Second, a strategy exists to address all these challenges at once: turning some (or in exceptional cases all) of a com-pany's software products into open-source ones. Here's how an open-source development model can help commercial soft ware companies overcome many of the challenges they face in growing their business.