Software Libre and Entrepreneurship

Copyright Project Cauã 2013 1

Software Libre and Entrepreneurship

ByJon “maddog” HallLinux International

andProject Caua

February 8, 2013


Warning!

No magic here!To make money with Free Software you must first

be a good business person!


Software Livre!

Free as in freedom, not free as in beer. Free to read the source code Free to make changes to the source

code Free to redistribute those changes Free to use the software for any purpose You can not limit another's freedoms

No one has ever said you should not make money writing software.


It Is A Business Like Any Other

Know your market Know your value added

Who are, or will be, your competitors? A real business plan

Marketing plan Market to the Chief Executive Officer Market to the Chief Information Officer

Financial plan Cash flow analysis

Exit strategy


Why Do People Write Free Software?

They need it for their own work “They scratch their own itch”

Other people may help them make it better

Other people may pay them for their software

They like writing software They have a business model based on

service, not products


Why Do People Pay People To Write Free Software?

They want the software written in a shorter period of time

Paying someone allows them to work full time instead of only part time

Kernel developers, as an example There is no reason not to share the

results of the software being written They want a feature that is unlikely to

be written by someone else They can leverage off other free

software that has already been written


In The Beginning Hardware expensive, computers few

Software hand-tailored, from beginning

Not “computer science....computer black magic”

“Punched cards and FORTRAN all you need”

1980s – Hardware was becoming less expensive

Software was manufactured Today hardware is incredibly cheap

Software should be tailored again


The Economics of Mass Production

Meets 70-90% needs of 70-80% of market .70 x .70 = .49, less than half!

Create commodity products What is a commodity?

Corn? Cups Cars?

Are business situations a commodity?


Software Companies Love Proprietary Software

High Profits, low investment Few jobs, non-local Production software is like printing money

Who calls the treasury for assistance? Who calls a farmer?

It is in “their” best interest.


Total Cost of Ownership (TCO) vs Value

Don't be fooled!


Most People Do Not Want Products

Cars and Food People want service Making software do what people want


Service

Highly trained and skilled service Like a brain surgeon Like a lawyer

Not just packaged product installers


80% of All Software Written...

...is NOT prepackaged, production software

Systems Admin software Embedded Systems Software Manufacturing Software Other

Why not hire an Open Source developer?Why not make your solution “Open Source”?


Jobs Programmer Systems Analyst Systems Administrator Product Manager Technical Marketing Manager Teaching

Commercial Public

Consultant Integrator


Rio de Janeiro:Lowering the Barriers

Company investigating pharmaceuticals Proprietary software

“Breathtakingly” expensive Only in English

Open Source PostgreSQL database OpenGIS - GNUplot Perl

Lowered cost of software for company Allowed company to exist


St. Petersburg

Turbine Test Bed Proprietary

Software Expensive Inflexible English


Enter Linux

Software uses MySQL GNUplot Tcl/Tk Python

Less Costly More Flexible


Sao Paulo Subway SystemRedirecting Money Saved

Dirty subways, no money for subway cleaners

Used Open Office instead of Microsoft Office

Hired subway cleaners Number of subway riders went up


Caixa Econômica Federal

Ran lottery system with proprietary software

R$1 million/month maintenance Ten months to develop new lottery

game Hired three FOSS programmers

Three weeks to develop new lottery game

Three programmers did NOT make R$1 million/month


Value-Added Reseller(VAR)

Buys components from “Original Equipment Manufacturer (OEM)”

Buys software from System OEMs or Independent Software Vendors (ISVs)

Creates Solution for customers May not be targeted to one particular

customer or may start with one customer Easier to do locally

Easier to do with Free Software


Real-life Business Models

Closed Source To Open Source Nashua ProjectDotNet

Free software, or software that is free? Systems administrators trumpet


What NOT to do

Think of great new product that a few people will want

Borrow a lot of money Hire a lot of engineers Give away your software Expect people to pay you for it


Supercomputers:Image Rendering

How many human actors appeared in Shrek?

How many languages were represented in Big Buck Bunny?


Image Rendering

How many human actors appeared in Shrek? Answer 0

How many languages were represented in Big Buck Bunny? Answer 0


Blender

Software that started proprietary...

Designed by users Bought by users Continued by

users Now a non-profit

Creates movies Trains people in

how to use Blender


Publicly Funded Software

University Research and Projects Funded by taxes Real life usage of student's work

Military software (non-secret) Philanthropic organizations Government projects

Local, State and Federal Education, taxes


Government Software

Must be “long lasting” Should:

Encourage “local” jobs Reduce Balance of Payments problems Reduce cost of license administration


EducatorsSoftware livre! Teaches students twice

Once how to use software Once how software works

Real software used by real companies and people

Also can teach collaboration


Universities vs Self-training

Universities teach and certify Teach you what is needed Teach you how to investigate and think Broad background of knowledge Certify with tests and certificate

Self-training Certification

Linux Professional Institute (www.lpi.org) Other certification programs


Summary

Study both technology and business Learn from free software projects Determine business area you wish to go

Product (hardware and/or software) Service Combined

Write business plan and execute against that plan


And Now An “Advertisement”


Project Cauã: Goals Create 3-4 million new high-tech jobs

inside Latin America and around the world Employ “unemployable”

Reduce amount of electrical usage Create more environmentally sound

computing Provide “gratis” wireless Internet over

urban areas Create low-cost supercomputer grid All without government funding


Project Cauã: How? Thin clients (<10 watts) replace desktop

computers Hardwired via ETHERNET to server system Wireless mesh node

Server systems hold data, do heavy processing

Everything virtualized and encrypted Systems Administrators/Entrepreneurs own

systems As business owners, sell services Bank loans to buy hardware Provide support to end users Sales agents Support for services


Project Cauã: Provide Services For “Mom&Pop”

Create local “ISP”s buy Internet bandwidth in bulk distribute to local thin client customers

Perform services of backups disk storage management security services training/education

Create specialized applications for business


Our Progress

V1.0 – too complex, too expensive to start

V0.5 – Multi-media center – too high an entry

V0.1 – Right price point, expandable


Time Frame

Three month pilot – March-May Fifty “Entrepreneurs” Selling/installing 4-5 systems a week

Analyze results Three month pilot – July – September

1000 Entrepreneurs Same goal of sales, but also upgrades

Analyze results


Questions?

www.projectcaua.com

Software Libre and Entrepreneurship

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