Nicholas Herring

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Top Stories by Nicholas Herring

I've always wondered where the word "oxymoron" came from. What does "oxy" have to do with "moron"? What about the words "commercial" and "open source"; do these words form an oxymoron when combined in one phrase? The open source-based CRM software maker, SugarCRM, has successfully combined these polar opposites and implemented such a "commercial open source" business model. SugarCRM has taken its business model to a new level in that they have combined an enterprise server software sales model with that of a software-as-a-service model. Of course, SugarCRM offers its software for free as an open source server and then converts some users to paying customers by charging for add-ons, installation services, training, technical support, and software patches (see Figure 1). The Start of Sugar The Cupertino-based SugarCRM started in April 2004 with 10 employees, charging ... (more)

Open Source Business Models Examined

At LinuxWorld Expo in San Francisco, it occurred to me that I had overlooked a very important Open Source business model, the Membership Model. Confronted by a keynote speech by Stuart Cohen, the leader of the Open Source Development Lab (OSDL) (, it became clear that I had jumped into the Advertising and Conversion Models too quickly and had to back up and deal with the membership phenomenon. As a businessman, the Advertising and Conversion Models are more interesting, but from a raw power standpoint the Membership Model may be more important. So in the spirit of j... (more)

The Open Source Venture Capital Universe

A rollercoaster - as trite as that image may be - is the right analogy for venture capital investing in open source companies. And what a long, strange trip it's been. Starting in the mid '90s, a few brave pioneers like Benchmark invested in an open alternative to proprietary software and made a fortune. By the end of the decade, everyone wanted a piece of the action. A second wave of VCs rushed in at ridiculous valuations and got their clocks cleaned. In 1999 and 2000, over-capitalized, over-valued open source companies burnt through hundreds of millions of dollars. Shame on th... (more)

Open Source Conversion Model

Looking at the open source software industry from the outside, it's often difficult to tell what is really going on. To use a string of clichés, it is hard to peel back the onion, to look behind the curtain, to perceive "Das Ding an sich" (German for the "thing-in-itself"; an idea made famous by the last Enlightenment philosopher, Immanuel Kant. Part of this perceptual problem may be due to the good old fashioned human tendency toward denial. No one wants to exclaim at the dawn of a new era: "Here comes the new boss, just like the old... (more) The Conversion Model

The other day my 16-year-old daughter came down the stairs in tears. She was holding the new version of the Scholastic Attitude Test and complaining that it was unfair. Look at this question, Dad. Who could answer a question like this?" I looked at the question and had to agree that it was a tough one: 27. Lamb: wolf;    Open Source Project: ________________? a.  Microsoft b.  Enterprise software vendor c.  419 scammer* d.  Jack Messman (For additional information on 419 scammers, refer to "Honey, it has to be A. Everyone knows that Microsoft ... (more)