Rob Howard (who runs Telligent), says on his blog:
WordPress is made available for free because investors and backers of the business are making the captial contribution to bring the consumer cost to $0.
That’s wrong and indicates a misunderstanding of the economic model that underpins a project like WordPress.
WordPress is made available for free because it is becoming increasingly obvious that a great way (the best way?) to create software is to give it away for free to drive maximum adoption and then charge for the add-on services that support that adoption in various ways.
This model has worked well for WordPress. WordPress has been thriving as an open source project that anyone can use and contribute to for free and build commercial businesses on top of if they so choose. As WordPress adoption has grown, commercial services have grown alongside it. There are now dozens if not hundreds of businesses that supply services like like WordPress hosting, spam filtering, template design, plugin development, ad serving, technical support, etc. Automattic is one of those businesses. We raised VC money two years ago ($1.1mm) and invested it to build out a number of services including the Akismet anti-spam service and the WordPress.com blog hosting service. Automattic does not require – as Rob seems to think – large infusions of VC money to stay in business. Quite the opposite, we’ve been profitable for over a year. But even if we weren’t, it would have no effect on the WordPress software itself. That’s one of the beauties of this model. Because paid commercial services like the ones provided by Automattic are separate from the free open source core software, Automattic could go out of business tomorrow and WordPress could continue on as a thriving open source project exactly as it does today, without any need for investors or backers to keep it afloat.
3 replies on “Some comments on free software”
That's a very valid point Toni. I realize that selling add-ons is part of your business and I neglected to mention that.
I'll correct it.
[…] and easy to use CMS. Edit / UpdateToni, from WordPress, correctly points out that I failed to mention one of the means by which WordPress creates revenue: selling add-ons and other value-added services for WordPress (and others). We in-fact recommend […]
What are, if Im able to ask, the economic sources that have made Automattic profitable?