The "Tom Sawyer's" of Open Source make millions while "contributors" work for free

Red Hat reportedly will acquire open source project JBoss for $350M. Ponderings of Woodrow included some interesting JBoss numbers from the Red Hat conference call.

CY2006 - In excess of $60 million bookings, $40 million revenues

CY2007 - $110 million bookings, $80 million revenues

150% YOY revenue growth in March Q

JBoss growing revenues faster than expenses

Cash flow negative historically (moving to positive in a few quarters)

$0.01 dilutive to Q2 (August) for RHAT

Neutral to earnings and cash flow for full fiscal year (Feb 07)

Dana Gardner who writes "Between The Lines" for ZDNet says this acquisition represents a seismic shift towards open source. Perhaps this "seismic shift" will have some unintended consequences.

How will the developer "contributors" who worked for free on the project react to a few people at the top making hundreds of millions? I am reminded of the famous Huckleberry Finn story where Tom Sawyer convinces his friends to work for free and paint the fence for him. "Come on it will be fun".

The Open Source phenomenon has been difficult for venture capitalists and business people to understand. Why would talented software developers work for free? When something of value is created who collects the rewards? How could open source be monetized?

Then there were the legal issues of ownership, patents, copyrights, etc. Enterprise IT managers worried about copyright or patent infringement lawsuits if they used open source project software with no warranties. Other concerns were who would fix bugs, add new features, or address performance, scalability, and integration issues?

Now that Open Source software has hit the big time and become a billion dollar business will things change? Will developers still be willing to "contribute" for free? Now that there are millions of dollars at stake will patent lawyers jump in with infringement lawsuits? When big companies buy open source project companies will the business model change? How will these big companies recover their investment?

IBM, HP, Oracle, Novell, and Red Hat were all playing together nicely in the open source world. Now that Red Hat and Oracle have made big acquisitions will they all continue to play nicely?

Did you ever think you would see The Adventures of Tom Sawyer applied to software?

Comments

[Sanat Gersappa]

Nicely put.

There is a sucker born every minute. Not only will they work for free, they will defend it from criticism as well :-)

[Dare Obasanjo]

People were making comments like this when RedHat IPOed so many years ago yet we still see people contributing to Open Source. We still people contributing to Open Source even though the Mozilla Foundation makes millions of dollars a year. We still see people contributing to Open Source even though IBM is making a mint on consulting fees related to all the Open Source software they support and pitch to customers as solutions. And don't get me started on Google which is built entirely on the backs of Open Source Software.

So what? Open Source isn't going to go away or become any less popular because some folks make money.

[Raj Bala]

I have always had the impression that the majority of the JBoss development was by actual employees and not a community of open source enthusiasts.

[Haroon Khan]

I tend to think OSS contributers as amateur sports-men and women. People who play sports on an amateur level are play because they love the game. They know that they'll never have the same recognition like the people who play sports professionally. Just participating is good enough for us.

I think OSS developers feel the same way. I think what drives them is the hunch that may be, just may be they can write that great algorithm, or routine, or application that's better than the one developed in a traditional development environment.