Free Software is Serious Business

A Libre Business Model by Example

By Rijk Ravestein - Owner of Datraverse.

SavaPage is an Open Print Portal offered by Datraverse B.V. in a proof-of-concept “Free Software Practice” that is based on a “Libre Business Model”.

This paper explains why a Libre Business Model is needed, how its design came about and how the Free Software Practice works.

Make it easy for organizations to adopt Free Software.

• If we are serious about Free Software, we must also be serious about being accepted as sustainable solution providers in the now dominating Free Market however flawed it may be.
• To be accepted, we must offer our Free Software Solutions in a solid corporate framework where contracts, invoicing and all other bureaucratic elements are according to legal standards.

Create Free Software with Justice for All.

• The very same ethics that are fundamental to Free Software, must also be the core of our business conduct.
• In a Libre Business Model, business partners cooperate to deliver a Free Software Solution in united responsibility, to guard and support software freedom for community members in a sustainable way.
• Business Partners are Free Agents and have the freedom to do business on their own account at all times.
• The Libre Business Model dictates financial transparency and non-exploitative behavior.
• To discourage shady deals by unsolicited men-in-the-middle, all prices are made public.
• Money is made, not abundant at the expense of our fellows, but sufficient to financially compensate Libre Business Partners fairly for their community services.
• Since the standard of living is different in different parts of the world, and not every organization has the same financial resources, pricing may be too high for some. Therefore, motivated participants must not be excluded for financial reasons, but will be accepted with the payment they can afford.
• We invest in long-term commitment and sustainable relations to bring Free Software forward.
• Shareholder value is not a monetary entity, but an ethical commitment that adds social value to the Free Software Community.

Help Free Software Professionals make a living by lowering the threshold for engaging in Free Software Development.

• There are many skilled and highly motivated Free Software Professionals around the world. Since there are very few brick-and-mortar Free Software jobs, it is very hard for professionals to live their dream and make a living off Free Software.
• A Libre Business Model enables Free Software Professionals to engage in development and support activities in a flexible way. Even a few hours spread over the week can be made worthwhile.
• Professionals can adopt a cautious strategy and watch for a tipping point where one could for instance cut down a regular brick-and-mortar job to 3 days a week, and work 2 days a week for one or several Libre Business Model implementations.

Tragedy of the Commons is the dilemma that people's short-term selfish interests are at odds with long-term group interests and the common good.

• Organizations consuming Free Software as “free beer” act against their own interest.
• Producing Free software does have a cost in terms of effort and resources used.
• When costs are not compensated, producers will eventually fade away.
• A Libre Business Model is an antidote for exploiting intrinsic motivation, because it acknowledges that Free Software producers must be compensated for their efforts and resources used.

The Libre Business Model is an application of Free Software Design Patterns.

• Concepts like Decentralization, Peer-to-Peer, Distribution and Confederation are ingrained into Free Software Design and considered best practice to let users optimally exercise their freedom.
  
  → “With Free Software users control their own computer instead of being controlled by their computer.”
  
  
• Likewise, a Libre Business Model is designed as a distributed federation of small business units, or individual professionals, who cooperate peer-to-peer to accomplish well defined Free Software community targets.
  
  → “In a Libre Business Model partners run their own business instead of being run by their business.”
  
  
• A distributed design facilitates fail-over capability. Partners can take over each others work when one of them is unavailable. This makes Free Software Support sustainable.
  
  
• The Libre Business Model leans heavily on a Web-of-Trust. By achieving common business goals, trust among federated partners will be extended and reinforced.
  
  → Trust is the most valuable equity of a Free Software community.
  
  
• Conway's Law states that “organizations produce designs whose structure is a copy of the organization's communication structure”. Restated by Eric S Raymond, “the organization of the software and the organization of the software team will be congruent”.
  
  → The Libre Business Model is congruent with Free Software Design Patterns.

I am the owner, and in 2015 was the sole employee of Datraverse BV, a company I established in 1998 for my software development contracting work and value added software reselling. The “BV” (Besloten Vennootschap) acronym is the Dutch equivalent of a Limited (Ltd) or Limited Liability Company (LLC).

As it happens Datraverse BV is also the owner and creator of SavaPage Open Print Portal, and therefore the perfect legal umbrella to prototype the Libre Business Model. I implemented the model as a so-called “Libre Software Practice” for the SavaPage Community, see https://wiki.savapage.org for a complete explanation. In a nutshell, the practice works as follows:

Datraverse acts as manager of the SavaPage Community.

• Datraverse produces installation binaries and a comprehensive User Manual.
• Datraverse manages the Forum, Wiki, Help Desk and Issue Tracker.

Business is fueled by recurring subscription fees from community member organizations.

• Organizations join the community by paying a one-time enrollment fee and yearly subscription amounts.
• Subscription amounts are proportional to the number of Participants (students, employees, etc).
• Member organizations (Residents) are entitled to free, as in “free beer”, Technical Support.
• A flexible SLA contract is available for Operational Support.

Datraverse guaranties that subscription fees are fairly shared among partners.

• Development Partners get a share proportional to their efforts.
• Deployment Partners get a percentage from the subscription fees of the Residents they support and deliver to, and are free to invoice value-added services on their own account.
• Translation Partners get a percentage from the subscription fees of Residents originating from the locale they translate for.

Datraverse takes care of all legal matters like invoicing, taxes (VAT), etc.

• Terms & Conditions
• Development and Translation Partners sign the Fiduciary Licence Agreement (FLA) as created by the Free Software Foundation Europe (FSFE).
• Dutch tax law allows Datraverse to transfer money to individual professionals who don't have a legal business entity themselves.
• A list of money transfers to Dutch citizens is sent by Datraverse to Dutch Tax Office yearly. The money transfer total automatically appears as income on the person's yearly tax return form.
• Dutch Tax Office does not need a list of money transfers to persons outside The Netherlands. Persons are responsible to handle transfers according to tax laws in their own jurisdiction.

The Libre Software Practice has proved to work. To date, the SavaPage Community comprises 13 subscribing organizations with a total of 47,000 users. SLA contracts got signed. There is financial revenue and profit.

• Scale up to a federated practice in which many independent professionals can make a living by giving end-users a great SavaPage Experience.
• Inspire other Free Software Communities, so more Libre Software Practices will emerge. In that way professionals could engage in several practices and create a more steady income.
• Hand the Libre Software Practice over to a younger generation.

Create your own level playing field

“Never innovate to compete, innovate to change the rules of the game.”
― David O. Adeife

Think big, act small

“Ideas and products and messages and behaviors spread like viruses do.”
― Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference.

Learn by doing

“An ounce of practice is generally worth more than a ton of theory.”
― Ernst F. Schumacher, Small Is Beautiful: A Study of Economics as if People Mattered.

Rely on your compass

“Liberty and Justice for All.”

Have hope and courage, be realistic

“Hope is not the conviction that something will turn out well but the certainty that something makes sense, regardless of how it turns out.”
― Václav Havel

Be confident

FOSS now is the dominating software development paradigm.

• Proprietary software vendors are fighting an uphill battle.

GNU/Linux now is the dominating OS.

• Even “Microsoft Loves Linux” . . .

Libre Business Models will follow . . .

• Free Software Practices will be mainstream in 20 years.
• Why not? Make it work. Go for it!

• P2P Foundation
• Re-Imagine The Future
• The Telekommunist Manifesto
• The Tech Story Is Over. We Won. Now What?
• Selling Free Software