JC Lacal on the Open Source Consulting Model and Rationale

<ed.note>JC sends out an occasional newsletter, [Seamless Health], and in today’s edition he included a brief explanation of his company’s open source model which I thought was worth posting:</ed.note>

In the software industry there are two main types of business models: a.) The Adobe / Microsoft / Oracle model where users can not make changes to the software and they pay steep per-user licensing fees; and b.) The Free / Open Source Software (F/OSS) model where users can make any changes they need to the software and with no licensing fees. The Apache web server, the GNU/Linux operating system, the MySQL database engine, sendmail, and the PHP programming language are but a few examples of the high-quality Free Software available at no cost.

OpenPHI is based on the Free Software model: anybody can use our software for free as it is. We make money by adapting our software to fit your specific needs. This is not as radical as it sounds. Think of Free Software companies as a law practice. Almost all legal proceedings, documents, and pleadings are a matter of public record. Thusly, anybody can go to the courthouse and get a verbatim copy of a will, divorce petition, or lawsuit filing prepared by an expensive law firm. And yet, with all these legal documents available for free, most law firms still have a good business preparing _customized_ legal documents for paying customers.

OpenPHI operates on the premise that by providing our base software at no cost (think of "free eggs"), potential clients will get to value OpenPHI’s capabilities and expertise. Thereby increasing the value of the "hen" (the OpenPHI’s staffers) that laid the "free eggs."