Free Open Source Software developers will have a soapbox in Silicon Valley this week with TechDirt’s sponsorship of the Free! Summit May 11th in San Mateo. According to the website, the conference is already sold out with no more seats available. Mike Masnick CEO of Floor64 and founder of Techdirt will act as the conference MC and moderator while Chris Anderson, editor in chief of WIRED, is the Keynote Speaker. The conference is being produced by SageScape.

“As the digital economy drives down the marginal costs of technology and a generation of young consumers grow accustomed to giveaways, it’s no longer a question of ‘How can you compete with free?’ but a matter of ‘How can you afford not to compete with free?’”

“At the same time, the current economic crisis is making the need to turn free into cash more critical than ever, and some argue that free is doing more harm than good to content creators who rely on ‘traditional’ business models to pay the bills. The recession has proven that it takes no prisoners, and some companies won’t survive unless they can figure out how to monetize free – and quickly.”

“The Free! Summit addresses these challenges, and the opportunities, in an open and critical way by bringing together leading thinkers and innovators who are embracing the value of free…as well as those who are not. Investors, entrepreneurs, content developers, marketing professionals, analysts and other stakeholders who are at the forefront of the digital revolution.”

“Whether you’re investing in free, trying to sell free, competing with free or just trying to understand what free is all about, you’ll benefit from the insights and connections you will find at The Free! Summit. These days, companies and industries of all types are exploring new business models and searching for better ways to anticipate and meet customer needs.”

What is the business model for Free Open Source Software? Many businesses have adopted it vs. proprietary CMS and CRM software, and it is the basis of most of the internet’s server infrastructure. But where and how do programmers who work on open source software projects get paid? How do businesses like Sun with mySQL cover support and R&D costs? How can websites like Facebook & mySpace cover the costs of offering free services to anyone and everyone on the planet?

These are the issues that are expected to be covered at the Free Summit so anyone interested in their answers will be following the reports to come out of the gathering. It may turn out that the issue is a false one, with open source and free software companies enjoying some of the largest growth rates and expansion of market sector. How this business model works for companies developing FOSS is another topic expected to be debated at the meet.

It looks as if the proprietary kings like Adobe and Microsoft could easily be dethroned by open source software and cloud-based, software applications in the same manner as newspapers lost out to digital media. If a company like Google, for example, with 73% of the search market adopted a version of Linux and marketed it as an open source desktop OS alternative to Windows & Apple, backed up with a suite of free desktop and cloud-based web applications, it could be a huge success.

Android is seen as a first step in this direction, as the OS is built on a Linux base and operates on netbooks as well as mobile phones. The netbook / mobile phone OS and application market is on a huge expansionary track worldwide, so market dominance in this area would make it easier to backport into the desktop OS market. But it doesn’t directly target the FOSS business model, as mobile developers are making income by selling their applications rather than giving them away for free.

Google Linux or Facebook Linux could conceivably surpass Apple’s 10% market share in desktop operating system and provide a real option for the 88% of all computer users who use Windows. At a relatively minimal cost a company could adopt development of a popular Linux distro and promote it publicly in the desktop OS marketplace. Had IBM pursued this strategy from the start we might have a very different computing environment today.

Free Open Source Software is also extremely important in education in the developing world. One Laptop Per Child’s use of Linux on their $100 laptop brought out a perfect example of what could be done with the free, open source model. But no one has yet to crack OLPC’s financial model, which involves giving away a free laptop to every child on the earth.

Most every open source software developer and web designer I know has been working full-time, over-time, and turning down projects even through the last 6 months of the recession. The business model is basically the implementation of custom solutions for clients using open source software as a base. Nevertheless, it is very difficult to cover costs and remain competitive in the global BPO / web development market without a development center in India or partnership with another offshore service provider.

There are many different approaches currently to “commercial open source,” many different companies, niches, business models, and platforms. There may not be “one way” that emerges as dominant, but rather a multiplicity of success and failure stories. Companies like Google, IBM, Novell, Red Hat, Sun, Yahoo and others have already established significant successes in open source commercialization. Others like Microsoft, Adobe, and Apple are more increasingly recognizing the development trend and importing open source elements into their code networks.

For developers and businesses, there is a job to be done, and a coded solution, software & hardware choices. Going with proprietary closed source tools encourages big corporations whereas open source tools facilitate the smaller, independent outsourcing service providers. The turning point continues to be when open source surpasses proprietary in quality, but the point always returns to how free distribution can fund development.

This is a post from Web Dev News, a site brought to you by Xavisys Web Development.

FOSS – The Free! Summit – May 11, 2009 – San Mateo, CA