The Cloud Makes It Rain Money: The Business in Cloud Computing - Deploying and Managing a Cloud Infrastructure - page 349

Cloud computing faces challenges in terms of both software and hardware, but it also
serves as a driving force for technological progress to respond to demands in a flexible
manner covering diverse services and an infrastructure with a continuously increasing num-
ber of devices. Moreover, this challenge makes the IT services industry more aware and
requires professionals to become more business savvy along with being technically sound.
Making Money with Open-Source Software
Open-source software (OSS) is used widely by many software vendors, value-added resell-
ers, and hardware vendors (OEMs or ODMs) for their proprietary, for-profit products and
services. Customers are willing to pay for the licenses, commercial-grade quality assurance
(QA), and professional support, training, and consulting.
There are several different business models for making a profit using OSS:
Selling Support Contracts In this model, a company makes the application freely down-
loadable but may charge for expert consulting. Consulting might cover setup, maintenance,
and enhancements.
Service contracts can be customized to varying levels of support. Companies can charge
more for immediate phone support and offer lower rates for email-based support. Examples
include Red Hat and IBM, both of which make some of their applications freely available
and instead sell services such as export consulting.
Value-Added Enhancements and Services The application might be free, but the add-ons
and add-on services that provide additional productive value can be made available for sale.
This model allows both the creators and third parties to make a profit from enhancements.
Examples include Skype selling add-ons and credit for cheap VoIP phone calls.
Selling Subscriptions to Software as a Service (SaaS) Another related method is to sell
subscriptions to online accounts, services, and server access instead of selling the software.
Using the SaaS model, neither the source nor the binaries are released, which could be
inherently constrictive for software or service users.
Microsoft sells its cloud-based office product suite, called Office 365 ( http://office
.microsoft.com/en-us/ ), using this model.
Selling Binaries Typically, for large, complex projects the source code needs to be com-
piled into a binary. The source code might have multiple dependencies related to external
libraries, modules, and other resources. Resolving these dependencies can easily become
a tedious task, especially if the environment is distributed and components need to be
deployed to multiple different machines across a cluster or data center.
Companies that release OSS for free can make money by selling binaries and associated
licenses. Examples of such companies include Microsoft, Apple, IBM, Oracle, and
many others.
Selling Documentation Documentation is an essential part of software and the software
development life cycle. Making the source code available for free does not obligate a company