Where Are All the Open Source Billionaires?

Customer’s who are cheap and don’t want to pay you for your software are “bad customers”. It turns out that most customers looking to use open source software for economic reasons alone end up being bad customers that you don’t want anyway. IBM, Microsoft, and the likes have all figured this out. You really need to pass on this type of customer or risk losing your business. It’s very much like trying to target Win98 users. If they are too cheap to buy a new computer in an age where computers are dirt cheap, what makes you think they will pay you for your software? The same can easily be seen by looking at the desktop Linux world. Most individuals who use desktop Linux are of the opinion that everything should be free. They make for very bad customers indeed!

Not all OSS users fit into this category. But it only takes a small percentage to run your business into the ground with inflated support costs with virtually no return revenue.

Now that open source is turning into a business opportunity, does this mean it’s getting the respect it deserves? Or is it getting perverted by thankless capitalists who are hungry to turn social ventures into private money making machines?

John Pirie’s comment, I think, is right on the spot. Open source is the raw matter that is waiting to be transformed before being made relevant to the market. Everyone knows one of the main problems with open source is its accessibility: people are either afraid of it or uneasy with it. Solve this problem and you will have software worth millions of man-hours at your disposition and thousands of developers willing to help you for a slight compensation.

Is this workforce still too expansive for your means? Learn to collaborate, then; with your competitors, even. Share the cost of production and share the results. There is more than one way to add value to a product or service, and this is where your profit margin comes in. One could argue that you’re cashing in on the back of open source while increasing collective wealth.

That makes me wonder what incentives do open source contributers have in return. Are they really giving away more than what they’re getting? Is open source really fair in the end?

“ITS NOT ABOUT THE MONEY, for crying out loud. its about doing something worth doing.”

All code developed should be something “worth doing” or you are in the wrong industry. The company I work for is closed source, yet the code I develop, and the software they provide makes the end user’s work a bit easier. Wouldn’t it be a safe assumption that all software developed accomplishes this, and thus it is worth doing. 6 months of 50-60 hour weeks to save each of the hundreds of thousands of users many hours of frustration.

More on topic, the open source model isnt broken, the business models that are behind these companies typically are.

Jeff, I have enjoyed your blog for quite a while, thanks for taking the time to do it.

The google guys are open source billionaires.

Sorry I didn’t read to the end of your post before I commented.


first they ignore you,
then they laugh at you,
then they fight you,
then you win. ~Mohandas Gandhi~

He has nothing but vision but yet remembered till today and so will the open source model.

I like to have a free mind when I code and not a corp direction.

Bill Gates made a lot of money.That is major different between Gates
and regular IT guys,you have to understanding make money does not
mean you write good program, or invent something like genious.
It is all about control, which is fasinate Gates even he had 50 Bil$,
He still want to control not only you body or mind, but your land,
even seeds or plants you eat and grow, if windows is worst giant junk,
than he start to work on vaccine, seeds, GM food, and soil, window
like products will appear in future in these feild.He never think other things than CONTROL.

If you are good programmer, you are just a nice " worker" or “slave”.
the reason you never get rich because you are too nice never think
about your product will control people’s mind.

If Bill Gates never have able to make Window safe and relaiable, why bother involved in other fields, maybe future Microsoft will produce magic pill called xp-smart-drug to keep people addicting anything made by evil.

– The real money isn’t in the software.

Holy crap, bad news for people earning money for theirs daily bread by software making. It sounds good, to be a billionaire (or just a millionaire), but - in your words - is it a definitely wrong approach to make money as an ordinary developer?

No, we are ALL open-source billionaires! After all, didn’t some bunch of consultants say that the corpus of open-source software would cost billions and billions of dollars to create, which means I personally have the use of billion-dollar assets. :slight_smile:

Of course, it is difficult for me to directly trade these rights in for cash, because everyone (apart from a few GPL violators) has the same rights already…

“I don’t see that happening with open source development. I don’t want to work as a burger flipper so that I can provide some esoteric “good” to the world through free software.”

Every day I build software for money. That software is used in Clinical trials to track and report data. We often release my products to other institutions under an Open Source license. I still get a salary whether we do or not.

I’m not flipping burgers, yet I’m working on OSS. hmmmmmmmmmm.

Right on the money! When I was 18, still young and impressionable, I stumbled upon and purchased a copy of Richard Stallman’s “Free as in Freedom.” I didn’t understand the complete concept he spoke about, but as I started diving more into open source software, I began to see exactly what he meant. Free software is more about Freedom than Price. Freedom to patch software to fit your specific needs. Freedom to fix bugs instead of waiting for an update. Freedom to not worry about whether your employees have pirated OSes on their systems, or that you may have lost the physical licenses.

"yes, you’re working for the better tomorrow and I’m in “IT” for the money."
See yesterday’s great post on the Dot-Com bubble 2.0 I think this ties in with it. Build a service with free software that is a great service, not just a service so you can make money. That’s how we can avoid the next dot-com crash. Get out of it if you just want to make money, because you’ll be no better off than the “Free iPod” advertisers.

I’ve been reading your blog for quite a while. Thanks for WRITING something worth reading

No, there won’t be open source billionaires. And to hear the trolls tell it, it’s the tragedy of the Universe that there won’t be!

I think next time I get one of those “open source will put programmers like me out of work” numbskulls, I’ll just try drawing them a picture:

Proprietary software:
$$$$$ 8D .:frowning: .:frowning: .:frowning: .:frowning:
Open Source Software:
$ :slight_smile: $ :slight_smile: $ :slight_smile: $ :slight_smile: $ :slight_smile:

See, that’s how it works. Not one multi-billionaire and ten thousand serfs shivering in rags and living on chicken feed, but the opportunity for a thousand millionaires and the rest to at least earn a decent living.

But evidently, a more even distribution of wealth is exactly what seems to scare the status quo the most: as long as there is one billionaire, they can dream all their lives that one day it will be theirs alone. An even chance to be a millionaire with a bunch of other people at the same time? What fun is that?

“The real money isn’t in the software. It’s in the service you build with that software.”

Oh if I could just Digg that one statement!

it a definitely wrong approach to make money as an ordinary developer?
The most lucrative part of the software industry is support, not distribution.

It depends on your definition of “lucrative” and “make money”. You can make a very decent living writing open source software; people are doing it right now. And businesses thrive selling support for open source software. But I doubt we’ll ever see an Oracle, Adobe, or Microsoft come out of that.

[over 80 percent profit margins in software] may be true for one Microsoft product in 2002 (the article is from 2002, when MS was higher-flying than now), but “regularly”? I don’t believe that.

Gross profit margins [through mid-2006] in the Software sector ranged from 95.0% (CHKP) down to 31.1% (FISV), with the median for the group at 76.8% and the average at 67.2%.


Software companies with profit margins greater than 80% from that chart: CheckPoint, Citrix, CA, Adobe, McAfee, Symantec, Trend Micro, Intuit, Microsoft, Mercury Interactive.

Gross profit margins [through mid-2006] in the Software sector ranged from 95.0% (CHKP) down to 31.1% (FISV), with the median for the group at 76.8% and the average at 67.2%.

Fine. However, there is also that nasty little statistic that something like only 28% of software projects suceed, 23% fail outright, with the balance late and over budget. In any business model the reward has to balance out the risk. Large companies especially need that margin on some products if only to keep the rest of the company afloat. I can’t recall ever hearing of a company that could net 80%.


You say that Microsoft has an advantage over linux in that they test their software before they ship it. I would say that testing is the biggest advantage Linux has over Microsoft.

Here is how testing works on the Linux side of things. Linux is used by lots of companies to do lots of things. The engineers working at those companies (deploying servers running linux) are the testers. There are millions of them around the world. When one of those engineers sits down to upgrade some of their servers, they pick a kernel version they want to upgrade to and test the hell out of it for performance, stability, and functionality. In the process, they find bugs. They report those bugs to the kernel developers, who fix them.

The world has never seen an OS kernel tested as thoroughly or in as many different configurations as the linux kernel.

For every hour spent writing kernel code, there are probably a thousand hours spent testing it. Even Microsoft can’t afford to hire a tenth as many testers as linux has. And even if it could, it wouldn’t know what to tell them to test. The linux testers test the parts of the kernel that matter to their particular real world application, of which there are thousands, if not hundreds of thousands.


Open source is creating multi millionaires, I know many businesses that are making money from open source applications but using these open source applications to create customer values. Open sources are strengthening the economy by allowing smaller companies grow.

A letter question will be “How many millionaires are over 30% depended on open sources”, then do a sum. It will be huge.

Just as Jimmy Rogers was shocked years ago to discover that Nigeria had three billionaires (“There should not be ANY billionaires in Nigeria!” is my rough remembering), I don’t think there should be any Open Source billionaires. To go from multi-millionaire to billionaire means dipping into a huge trough - drinking water that fed a LOT of developers and a LOT of sales and marketing travel plans and a lot of cubicle space, etc.

I do not expect the same sheen and performance from Open Source software. It is NOT me getting what I paid for it, because often I get a lot MORE than what I paid - and sometimes I get a lot LESS when I buy commerical products. I am looking for the right tool at the right time for the right price. I think of open source (aka non-MS products:-) as sometimes just the right thing. Not always, but sometimes.

Would Mark Shuttleworth count as an Open Source Zillionaire (or whatever his current net worth)?