Subject: Re: Successful FSBs
From: Brian Behlendorf <brian@collab.net>
Date: Thu, 19 Sep 2002 10:52:28 -0700 (PDT)

On Thu, 19 Sep 2002, Adam Turoff wrote:
> 	Covalent      (What's your take on this Brian?)

(full-disclosure, I'm a tech advisor to Covalent)

I think they have the same model as us, IBM, Sun, and others: write and
give away a lot of free/OS software, but sell a branded commercial product
that incorporates both open code and commercial code.

I think the example of "Squeak" is inconsequential, because it's a
research project that really has nothing to do with Disney, but with
someone who is/was a researcher there with the ability to investigate
anything that interested them.  Unless I'm mistaken and there's a lot of
use of Squeak internally at Disney.

I like Larry's call to distinguish between the "lifestyle" businesses and
the "non-lifestyle" ones.  Slightly before & concurrent with getting
involved with Apache, I started a web site design company called Organic
Online (in 1994, "Online" was the precursor to ".com") which built some of
the first web sites for companies like Harley, Levi's, Nike, Saturn Cars,
and tons more.  It was a lot of fun, but it was all "time & materials",
and ultimately a fairly instable business.  It grew to 3000 people at one
point, and then crashed with the rest of the dot-com industry, but it's
hard to tell whether that crash was due to dot-com or inherent limitations
in the T&M model.  Anyways, I could go into a long litany of things that
were not fun about T&M, but let me leave it with, I didn't want to get
anywhere near that same kind of model again in the future.

I suspect there may be a third kind of FSB: one that uses & creates open
source software in the course of their work, but whose product has nothing
to do with software.  Disney is an example, to the extent they may use
Squeak (or Apache or Linux, etc) inside their business.  ISPs, as Tim
O'Reilly likes to point out, are a great example of this.  It may be hard
to constrain this category given that 60% of the world uses Apache, but
perhaps one could refine it by calling any company that not only
contributes the odd patch but makes it a part of an employee's
responsibility to feed back into the pool they draw from an FSB.  So how's
this:

FSB, Class A: companies (or divisions of companies) whose services are
entirely or mostly focused on (perhaps privately branded) open source
software; this includes support, custom engineering, consulting, etc.

FSB, Class B: like Class A, but also sell software with a non-Open-Source
component.  These companies must not just pull from the Open Source
community, but feed back to it as well, and not just accidentally or by
happenstance, but for a business reason.

[I *not* would consider companies who incorporate Open Source software
into their products, but do *not* feed back to the community, FSBs]

FSB, Class C: companies (or divisions) who use Open Source software in
some part of their business, do not sell or provide services around a
software product at all, but do feed patches and enhancements back to the
open source community.

The hierarchy implied is intentional - I'd have a lot of respect for
someone who could build a large Class A company.  Perhaps there's some way
for a Class A company to not be a "lifestyle business" as Larry describes;
that would be interesting.  I don't know, though.

Also, in all classes, the open source component must be more than just an
offhand research project, it must be functionality related directly to the
company's products/services.

	Brian