SaaS but also open source?
Just wondering what people think about paying for a SaaS where the underlying software is 100% free and open source. Would you view that as a positive or a negative? For example you could use the paid version and not have to worry about hosting and maintenance with the comfort of knowing you could host your own version any time.
Yes, that's he business model of Wordpress, Discourse .
It's a kind of freemium strategy, and even better if your software becomes the standard in your niche.
I think nobody cares about what's underlying softwares are running to engine a SaaS.
You usually look for a fast, 100% uptime service with the features you need, you don't care about what's under the hood.
I guess I was asking from the point of view of 'why would I pay for this went I can run it myself for free'.
It sounds like the legendary HackerNews way of thinking! :D
Can you elaborate?
Well put. Thanks!
No worries. Good luck!
SaaS software is all over the web and customers are paying tons of money for it. Ask yourself why.
Similar to the point of view "I could build this in a weekend."
Why would anyone pay for Slack when I can build an IRC clone in a weekend and host it myself??
There's a YC startup school video about product market fit by the CEO of Segment. The turned a 580 line piece of open source software into a 9-figure revenue business. They dismissed the idea of productizing the code for years bc they thought who would pay for a 580 line open source product? Lots of ppl it turns out
This is a well-established model.
It’s about capturing the market and then waiting for users to outgrow being able to just run the self-hosted version without paying you. In the end, when they can self-host, people with money will come to you for support down the road (which you can charge for, even if they’re self-hosting) or to free up the time they spend dealing with servers by having you host it. Larger companies may pay you to customize it to suit them better.
People will still prefer a free hosted version over a free self-hosted version, due to the technical overhead and costs of running and up keeping their own servers, so if you can’t afford to host the free customers then it’s an option to look into. It’s a way to capture a market without running up your own server costs, assuming it’s a product that the market will have the technical know-how to self-host.
You may also want to consider charging for a third-party hosting license, because likely, if you become big enough, someone will launch their own company specifically to make money by hosting your tool.
You could also have enterprise features that are not included in the open-source version (don’t cripple the app, just figure out what a large enterprise will need and make large clients have to pay for access to that).
Blogging platforms do this such as Wordpress and Ghost. There are data analytics companies that do this as well. I also consider MongoDB and other databases to be an example for this.
Check out this podcast: http://artofproductpodcast.com/episode-44
I think it explores this idea well.
I will. Thanks!
Loads of companies doing this. People are fine with paying something to handoff the management or the hassle. Also remember, open source does not automatically mean free.
Some hosted examples are: Gitlab, Ghost and Wordpress.
But you could also offer a premium version of your product like Sidekiq.
I think Invoice Ninja is a great example, they provide a free self-hosted version (https://www.invoiceninja.org/) as well as SaaS version (https://www.invoiceninja.com/).
This comment was deleted 4 years ago