Open Source Software Business Model for RediDraft

There have been a lot of books and blog posts written about individuals and companies building successful business models around their open source software. They usually revolve around support, hosting or premium features based on or extended from a community supported code base. WordPress is an excellent example of this model.

The lure can be tempting, right? Take a hobby or side project and over time build to the point where it can replace your day job. Unfortunately, the percentage of people able to pull it off is small. The typical open source project is never going to generate much revenue for it’s author(s). A successful open source project can be a lot of work for those maintaining it. They have to field and review pull requests and merge them into the code base if they think it is a good addition or change. They have to field feature requests and support requests and the slings and arrows from trolls calling their baby ugly. They freely offer their time and skills and are rarely properly thanked or compensated for their efforts.

I am a huge fan of open source software. I use it, have contributed countless pull requests to projects and have volunteered to help review pull requests on multiple projects. But I have no desire to take point on an open source project. I have a lot of admiration and respect for anyone taking on the maintenance of any open source project.

I’m currently in the testing phase of a rewrite of an application that has over 30 years of history and continual use. When I started preparing for the rewrite of RediDraft a year ago I seriously considered making it an open source project. A lot of positives were identified but the time commitment and the fact it is a very niche application tipped me against making it open source. It is possible in the future I will fork a community addition … but not now.

One of the exercises I did a year ago was explore viable business models around an open source version of RediDraft. Things like hosting, training, support, customization, etc. immediately come to mind and I dove into each of them.

Hosting

Reseller

One obvious option is to package up an installer and use the affiliate program of one or more hosting providers to sell hosting to a user. It’s low effort and low revenue but completely viable.

Software as a Service (SaaS)

If you are willing to invest in the infrastructure you can offer your application using a subscription model. You could offer variants around this model with a multi-tenancy option at one price point and then premium offerings with various levels of isolation. For example, you could offer an option where the subscribers data is kept in their own database instead of co-mingled with others in a multi-tenant database. Another level could be full isolation of both the database and the application layer maybe even using a domain or subdomain owned by the subscriber.

Dedicated Server

You could offer a dedicated server for a specific client or you could manage a server they have in their own data center or rented from a cloud provider. If it is a server they control and want their team to manage you could manage the installation and maintenance of your application and other software needed to run your application. You could be responsible for keeping your application up to date or train them for a hand-off.

Support

Usually some free and minimal level of support is offered with a community edition of an application. It’s usually provided via email or a public forum and there is no guarantee of any response to questions, concerns or bug reports. On top of this multiple levels of enhanced support are offered for a fee. These can include maximum response times and maybe even a phone number to reach a real person for help.

Premium Features and Add-Ons

This is often called a “freemium” model. The community edition has some basic level of usable functionality but the really cool features are held back as paid for enhancements. Yes, since the project is open sourced anyone could add similar features on their own but since you control what makes it into source control you do not have to accept pull requests with changes infringing on your freemium model. If someone made changes to their version of the code they would be lost when they upgraded unless they applied those same changes again.

I’m still hashing out the RediDraft deployment options of the next version. RediDraft is a very niche application therefore the initial learning curve and on-boarding process can be challenging. This alone means most of the hands-off options of a traditional freemium model aren’t viable.

So far the only thing I have completely removed from the list of possibilities is a hosting reseller model.

I know we will offer RediDraft as a SaaS offering and I know there will be hybrid variants with some or all of the functionality hosted on servers outside of the RediDraft data center.

I don’t expect multiple layers of a support offering for a couple of reasons. First, once they are up and running their aren’t very many day to day support needs and second when a support need arises it is almost always critical it get addressed in a timely manner.

I can also see either an extended free trial period or some kind of limited free version but only in the SaaS offering.

Over 30 years of continual use have proven RediDraft to be sticky and the more it is used the stickier it becomes. And for that reason alone I want to make it as easy as possible for a new subscriber to start using it.