A business model around the ORC?

I have invented Professional Open Source, have you heard of it?. It is really a business model for Free and Open Source Software. Is there a business model here at OpenRemote.org? Well, I have created a little shell company called OpenRemote inc. Its business model right now is to serve as a conduit for debt funding from me. The company is registered in Delaware and sits on a whole bunch of shares in its treasury (I took debt not equity). These shares are meant to be, well... shared.

I believe there may be a business model here, around an open platform for HA. It is different than JBoss, different than Digium, but it is in a big market. The HA market is exploding, partially due to the maturity of the high-end solutions out there, but also to the democratization of HA. That market is big and fragmented. That makes it tough to penetrate, we do not have the luxury of a EE standard to draft on in the HA space. There are emerging standards, one can think of KNX as a good industry attempt at standardization. OpenRemote could position itself on the Controller implementation field. In other words there may be a software play here. For that to happen we need to friendly to everyone. If there is a pure software play, we are thinking about the licenses. GPL licensed C libraries and CC licensed ORC (written in Java based on embedding JBoss in a mid-range Linux embedded environment). This will allow us to play nicely with standards controlled by a consortium of enterprises as it opens the door to Dual Licensing as well as allowing hobbyists to use it for free as the CC makes the distinction between commercial and non-commercial usage.

A simple model could be the hardware assembly. Mark Spencer made a killing with this model over at Digium/Asterisk. Mark is maintaining and publishing the BOM for the ORC (OpenRemote Controller). Neil went right ahead and ordered all the parts from a website and is going through the growing pains of helping Mark getting the Z-image in place for this Linux RI. However Wade, being a java guy, said no way he would buy all the parts and put it together himself but that he wouldn't mind paying someone to do it. Which got me re-thinking about the assembly and testing business for the RI. So maybe I can put some of that funding to work and have Mark research the issue in detail around a run of production. Do we do 10? 20? 20 units dedicated to development would represent a cost of 5000k and if there demand for the dev-kits. A unit at $500 (300eu) I am sure we could extract a 20% margin on hardware once you take out shipping and handling? Mark said he was going to look into this in Huntsville, I will follow up with him (he is still busy with Digium).

Then there is a no-brainer business model around professional services in the form of training and certification. This model is tried and true both in the Open Source world and the HA industry. The birth of JBoss's professional OSS model was in that services model and it grew to encompass a software model. However pre-VC money, we ran a multi-million dollar training and certification program for years out of our living rooms. We travelled the world giving tutorials and trainings. It was a blast.

The the existing HA programs are designed around the business model of integrators. The integrators today make great margins on hardware and implementation and maintenance. Training and certifying installers and basically listening to the needs of the integrators, seems to be a very viable business model. We did at JBoss and we can certainly do it here. Contrary to popular belief it scales, just on longer timelines than software, but it scales. Crestron and AMX today are $250m a year certification/hardware shops. I would be curious to know the breakdown. Meaning there is some room here to grow a $10m/year business.

But really we are going to keep an open mind. This is first and foremost a community effort and what will come of it will come of it. Planning to far ahead would be counterproductive and futile. In my previous life I failed at a OSS venture because I tried to invent too many things in a vacuum. I was missing the feedback from the field, how was our stuff being used. All I really needed to do was to listen to the needs of our users, that is one of the big benefits of an open community. The business model was born the day someone asked for me to do training for JBoss. Training I could do every other month and still bring in $20k for a training, perhaps there is a similar business model here? Before we knew it we were 20-30 guys, we already had a history, and we were received like rock-stars in Australia, which for both my wife and me is one of those fond memories of early JBoss.

Figuring out the business model, this is one thing I can help with. But for right now, let's focus on a community. Without a community, there is no OSS model. The community is what you do with it. Feedback welcomed!