Making money is hard for an Open Source business!
Like the title says, making money as an Open Source business isn't easy.
Traditionally, if you want to make money as an Open Source business then the way you do it is by either charging for downloads and/or for support. We've been doing both for about the last 7 years, when we moved from being proprietory software to Open Source code. Waaay back in the mists of time, pre-being 100% Open Source, we were actually 98% Open Source and 2% closed source. This allowed us to offer trial accounts, and it worked pretty damned well. Sure, there was the nuisance value of guiding users through having to install loaders on their servers, but once that was sorted out they were happy. Then the zealots in the Joomla project decided that any software that was encoded couldn't be listed on the Joomla Extension Directory and we had no choice but to become 100% Open Source. Given that at the time a good 80% of our business came from the JED, aquiesing was a no-brainer, and I didn't mind too much. It caused a lot less hassle in getting customers setup.
But Jomres has evolved into an unusual business model. Instead of forcing customers to take on trust that the software works (this is most Open Source business models), we release the Core system as free, and ask users to purchase access to plugins (and of course support). In my mind, this was the most generous we could be (Open Source ethos, give something back and all that) and still make a few bucks. This allowed potential users to install the Core, and if they liked what they saw they'd go ahead and buy access to the whole kit and caboodle. This was perfect when the bulk of the users coming to us were primarily experienced Joomla users.
This has worked well for us but times, they are a-changing. The people we see now are not Joomla or Wordpress experts looking for the best solution to integrate into the WP/J sites. Instead, they're primarily users who're sick of working with the big OTAs (Online Travel Agencies, like booking.com etc) and want to take bookings on their own sites. This is great, but to them, our competitors are no longer the other booking systems listed on the JED/WP directories, instead they're those booking engines who are SaaS businesses, as they offer similar services ( multiple properties/search/online booking etc). That's who they're comparing us to, and they care less about the fact that our software is Open Source and more about are we reasonably priced compared to, say, a year's subscription to a SaaS service? Given that most of them cost typically £20-30 per month to run (and much more if you have multiple properties ), a Jomres based site, which is on your own server and yours for life becomes a very attractive proposition.
The problem that we face, however, is that SaaS services can easily grant and remove access to their services, meaning that for them offering trial accounts is trivially easy, as all they need to do is refuse access to their API which at all times is on their own servers, when the trial license term is up. As an 100% Open Source business this is much harder for us to do, because once the software is downloaded you've got it and there's nothing we can do to prevent you from continuing to use it, so for us trial accounts for a long time have been a non-starter.
Now, you could say that people are generally honest, that we could start up a subscription approach anyway and take it on trust that people are will continue paying for access to the softare. Well, we tried that. Back in January for one week I ran an experiment to see if that would work, whether we'd get the kind of numbers of subscriptions we'd need at a (very) low price of £9 per month. Suffice it to say, the results have been less than stellar. I'm not going to go into the actual numbers, but in the time since then, somewhere in the region of 80% of the subscriptions taken out in that that short period have been cancelled. Now, arguably those users saw no value for continuing to pay for the software ( we specifically made them "no support" licenses because we knew we'd get a huge number of users that we simply couldn't support at that price. Remember, after all this time AirBNB still has never made a profit ), but a good number of them now have software that we know is worth £300 per year for considerably less. To be honest, this result didn't come as a suprise but it's nice ( kinda ) to have it confirmed, at least now I have the hard data to prove that it's simply not possible to run a completely Open Source php development shop in an extremely niche market, that relies on good-will alone.
So, that didn't work. What else could we try?
We've tried offering subscriptions for just Renewal licenses, but whilst more successful ( fewer of these have been cancelled ) we found that the bulk of our current users actually prefer to pay one-off payments instead of rolling fees. They want to bring their existing installations up-to-date from their 1 or 2 year old installations and then crack on with the rest of their lives/businesses. Frankly, I can't blame them, I'd feel the same. At the same time, however, we still need to pay the bills. We've also tried simply selling access to the Quickstarts ( for those not in the know, those are complete installations of Jomres, pre-built into Joomla or Wordpress that are ridiculously easy to setup and give you a full working booking.com-esque site in mere minutes. I'm not aware of any other system like it anywhere, and they're brilliant). This worked ok, we had a few sales of these and a few users chose to upgrade to full licenses, but still they weren't enough to pay the bills.
I keep finding myself listening to a consistent complaint I'm seeing more and more of nowadays which is that potential users would love trial accounts for Jomres, and I remain convinced that once we can get these users on board, show them just how much more our software offers compared to our competitors ( not only in the Joomla-sphere but in the Wordpress world too ) then we'd win them over. This makes me think wistfully of those pre-100% Open Source days when the software we released was 98% Open Souce, and 2% encoded and we offered trial licenses.
I personally have no desire to go back to the 98/2 model. I love that fact that we're Open Source, that users can get their hands mucky in the code and build sites that are uniquely theirs, and that they can operate knowing that whatever happens to us, their business will never be cripped if we should go offline, as is always the danger when dealing with SaaS services. We've been around for 11 years now, and it's not likely, but still...
What to do?
After a great deal of thought and consideration, I'm going to try something that we haven't done for a long time, and go back to using Ioncube encoders. Not in the Core system, instead just for the plugins. What we are going to do is offer time-locked trial licenses that are good for 2 weeks. These will allow users to download plugins through the plugin manager, and play around to see if Jomres suits them. After 2 weeks and the license has expired, the plugins will no longer operate and users will need to enter a full license key to continue using Jomres, or manually delete the plugins. As normal, full license keys will allow downloads of the complete Open Source versions of those plugins. In my mind this provides the best balance with the need to offer trial licenses versus the Open Source philosophy. As a result, the encoded versions of these plugins would not be described as GPL-licensed, instead we'll append a proprietary license to just those plugins. Once a full license has been obtained then the versions that will be downloaded would be GPL/MIT as normal with all of the benefits that offers.
Depending on take-up, we might also be able to go back to offering subscriptions that only allow downloads of encoded plugins, but we'll need to wait and see how this trial system works first. It's our experience that web hosting services are much more familiar with the concept of installing ioncube loaders on their servers than they were in the past and the nuisance value of the loaders is less of an issue, but that remains to be seen.
Is this a bit complicated? You bet it is. The least complicated solution, the one that'd bring the most users to us, would be to completely encode all of a Jomres Quickstart and tie that to a trial license but I'm not sure how legal that would be. At least with this approach the only software affected is our own code which we're free to license as needed. The software that's advertised on the Joomla and Wordpress extension directories is the Core system, which will remain unencoded, so we don't fall foul of their rules either. That remains both free as in beer, and Open Source.
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