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ForgeRock: Tweaking Open Source to Make Money

By Tara Seals, Contributing Writer

Can open-source software make money? One company says yes—by changing the concept of what “open-source” means.

The conventional wisdom is that it does, because selling maintenance and support subscriptions can provide enough revenue for development and differentiation of that product from the core open-source code upon which it is based. But Peter Levine, a venture capitalist at Andreessen Horowitz, argued last month that this revenue stream can’t possibly provide enough to compete with the sales and marketing efforts of proprietary software companies.

Now, Daniel Raskin, a former Sun Microsystems (News - Alert) executive who is vice president of strategy and marketing at open-source identity and access management software company ForgeRock, says that while this may be true, there’s no reason to not tweak the model to be more commercial.

"Peter Levine talked about conventional open source business models using the GPL license where you can't monetize software, so you struggle to raise money to invest in innovation," Raskin told CIO.

ForgeRock is leaving that model behind. It offers its software to developers under a commercial license free of charge for use in non-production environments. It also offers the source code to anyone who wants to take it and develop their own products. They would be required to develop their own bug fixes and security patches in that case, and essentially would be setting off on their own path, independent from ForgeRock.

But here’s where ForgeRock differentiates: Only subscription customers can use ForgeRock software in production environments, and only they get bug fixes and security patches, technical support and legal indemnification. They’re also the only ones that can access source code for minor and maintenance releases. And taken together, that’s a lot of value to offer an end user, especially in the security space.

"So we give one release a year away, but for every other release you have to be a paying customer – so the subscription monetizes the software itself," Raskin explained.

The hybrid free source code/paid executable model can combat the old wisdom that “it’s hard to compete with free,” he said.

And indeed, ForgeRock deviates from the traditional open-source model, which is granting everyone access to the source code, allowing anyone to contribute to the project, anyone to modify the software to meet their needs, and everyone to contribute to bug-fixes and security. Indeed this is the overwhelming benefit of going open-source to begin with (aside from the “free” aspect). The idea is that it’s a stronger product for being vetted by many, many hats.

The business model downside is that most open-source subscription products are forced to compete against the community-maintained and collaborated version that’s out there available for free—eking out a paying customer base on the back of the aforementioned maintenance contracts.

But with ForgeRock, there is no "community" version of its software.

It’s a move that Raskin defends, and puts forth as a better path. ForgeRock still offers software transparency; the source code is public; and, it offers the ability to customize the software from that underlying source code. But its model also protects a core revenue stream by gating some of the ancillary benefits, he argues.

"You do get hardline open-source people who maintain that everything should be 100 percent free, but if that only results in commodity software, then that's the wrong model,” Raskin said.