Each of these aspects makes the data collected from free content sites incredibly valuable to e-commerce companies. However, not all internet service companies make money directly from selling data they collect from users. Executives from both Meta and Google are on record as saying they do not make money from selling their users' data to other companies. Zuckerberg said the following:. Zuckerberg's testimony came on the heels of the revelation that political consulting firm Cambridge Analytica had obtained the personal data of at least 87 million Facebook users without their consent.
The scandal resulted in considerable government scrutiny into how internet companies use the data they collect from users. The GDPR requires websites to notify visitors of the data they collect and give visitors the ability to consent to information-gathering. While advertising is the largest source of revenue for many internet companies that offer free services, some of them are looking to develop other sources of income.
Diversifying into other areas makes sense given the increased competition for advertising dollars among many internet companies and the increased concerns over privacy issues from the data collection required to generate ad revenue.
While Alphabet, Inc. The company's other revenue sources include Android licensing fees, cloud storage, apps, and subscriptions. The company is in the process of developing high-tech products—such as self-driving cars and cloud gaming systems—that could add considerable revenue to its bottom line in the years to come. Alphabet Inc. Accessed July 29, Washington Post. General Data Protection Regulation. Company Profiles. Top Stocks. Marketing Essentials. Actively scan device characteristics for identification.
Use precise geolocation data. But many software companies compete quite well in small markets. Small markets with specialized needs also foster very profitable vertical development opportunities, with companies that sell expensive solutions complete with deep customization and support services. In a sense, then, Hermann is right. A well-run, profitable software company must develop for a market that can support its investment. After all, the company has rent, salaries, benefits, and cost of doing business to recoup, as well as investors who demand a reasonable return on their investment ROI.
But open-source software is fueled by a variety of economic models. Many open-source projects were originally created because the developers themselves needed a solution for their own use, and then chose to release the code as open source.
This can happen when an individual or a company doesn't really want to be in the software business but wants to provide value to others for free.
Sometimes, they hope that by releasing their project to open source, they can multiply their development resources for free, without having to hire more coders. Other open-source projects begin in educational or nonprofit organizations, or as a result of a hobby project.
No matter what, a piece of software comes into being with an open code base, but without the need for a business plan guaranteeing an income stream. For this model, there is no promise of ROI needed before investing in the software.
There are other economic models that drive open software, including community editions and freemium. In general these terms can often blur together , a community model is one where a company builds a product that it then releases as open source. That becomes the community edition, a version of the software where the company doesn't invest any support resources, and it's up to the users to provide ongoing support. Where a community edition model company makes its money is on installation and support, and sometimes on additional premium features.
Customers who don't want to do all the hard work themselves pay the company for support, training, maintenance, and any other service-related opportunity the company can come up with.
One example of a company with a community edition is SugarCRM. It was founded in Back then, it strongly promoted its community edition. The marketing benefit to it was that a community edition is, in a lot of ways, a free trial. A lot of users will test a free download. A subset of those users will convert to paying customers. Social Contracts. You are repeating two of the biggest lies about the differences between open source and Microsoft. Take Red Hat as an example.
Free open source Red Hat Linux will cost at least as much in licensing and maintenance fees to use as Windows. Hey, thanks for the great feedback so far, Everybody. Rick and Rafi, Excellent points. How does the whole point of your post hold up, if open source software can get you the same kind of service like MS does, in case you choose to pay for support.
The key word is choice. Rock on. Even for a company like Sun, for several reasons internal and external forces it has been a very difficult task to re-orient the company towards openness and free software. For a company like Microsoft, with a 15 year track record of disregard for ethics, the law, and mostly everything else but Microsoft, the challenge is, indeed, of monstruous proportions.
The only way Microsoft can change is a viral effect that promotes ethical standards and a real passion to communicate with their public, developing empathy, feeling their customers pains as if it were their own. In order to do this, Microsoft has to flatten its internal hierarchical system, enable for more peer to peer communication and abolish the culture of fear and terror. People have to be proud again to work there. I have a friend whose husband works for Microsoft. The other day he came home, he was so excited about a new project Microsoft had comissioned, one of his biggest challenges to date.
My friend his wife has been a pro-Mac, anti-Microsoft person since before knowing him, since before I got to know her, more than 12 years ago. An ideal, a motivation to change the world, serve the public better, respect their freedoms, be proud of their technological accomplishments.
The very structure and leadership of Microsoft is what needs to be changed, not the technology, not the people. They need leaders they can believe in.
They need ideals, something meaningful they know they can stand for. They need to be proud, so they can get home and tell their wives and children they did something significative to change the world in a positive way. Like Joel Postman was telling us earlier today on Twitter, about the time he met James Gosling at Sun Microsystems, and he was proud to tell his son he had worked that day with the man who invented Java.
Have you ever heard stories like that in Microsoft? This may take very tough decisions, like erradicating the oldtimers culture of terror, also splitting the firm into more nimble, agile and autonomous companies that can work efficiently with the sole goal of making their customers happy. Concentrated Power Corrupts Absolutely. Make Microsoft nimble. Make Microsoft people proud. Make customers happy. Make the world happy. I have personally created two cases for them — and got the issues fixed.
But one cannot invest millions into Halo 4 or next Office and then give them for free, no matter how full of ads they would be. Do keep in mind that Google is not free for advertisers, although the company has several free services.
And congrats for the book deal, Hugh! Think years. It is a business model that works. And now a comment about Microsoft vs. Open Source. I like Open Source. It provides an alternative, which is a mental decision making concept humans need. Personally, I have made a decision to play with the Microsoft toys because to me they are cooler.
And I get paid better because there are more jobs. And VB is the most widely used programming language on the planet by a wide margin. All this makes it easier to find work and also to thrive in supportive, well funded environments. So, go mainstream, roll in the dough, and write Open Source at home for your hobby to collect the non-monetary rewards. Read the blogs about Vista SP1 or the dumbass anti-virus routine they introduced that asks you to trash your own PST files.
There is no social contract with MSFT, there is simply a de facto almost-monopoly based on ignorance among users and worse IT departments. You know this. I know this. Anything else is just trolling, to be brutally honest. I have since changed my views. And more often than not, these improvements are returned to the commons.
Good luck getting someone like Microsoft to change their product for you. Even if they agree, you often have to wait until the next product release. Billions of dollars are spent by large companies each year because of vendor lock-in. If you can inspect the code, and integrate systems yourself, huge amounts of time and money can be saved. It also puts you in a stronger position to give your customers what they want. There is often no written contract, but there is passion and there is love.
Not love for the Enterprise, of course, but love and pure dedication for the software. I expect they know the answer.
We report into JP Rangaswami. But such complaints have not become serious obstacles for the large open source foundations. The foundation approach is much less useful for smaller open source projects, however. Good point. This was drafted Good point. This was drafted a while ago, before the ownCloud kerfuffle in April. Log in with your Channel Futures account. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
Tech Data vet Joe Quaglia named president of trace3. MSP dlvr. Open Source. Written by Christopher Tozzi June 7,
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