AWS and Mongo and Open Source – Hacker Noon

Many people seem to think that the AWS and MongoDB story is about cloud providers and Open Source business models — but the core of it is in fact about cloud providers and selling software licenses. Many companies around Open Source projects make money by also selling licenses to some additional proprietary software but all companies around proprietary software sell licenses.

Selling licenses is hard in the presence of cloud providers because cloud providers have a better product, they sell the whole thing, while a license is only a part of the solution. People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.

Let me quote Ben Thompson from the linked article:

There is a secular shift in enterprise computing moving to the cloud, not because it is necessarily cheaper (although costs are more closely aligned to usage), but because performance, scalability, and availability are hard problems that have little to do with the core competency and point of differentiation of most companies.

This is why Microsoft tries to become a cloud provider instead of a software license seller.

In other words: Imagine that MongoDB was entirely proprietary. Would that make MongoDB business model any better? Would Amazon pay for its license? Economically there would not be any difference with the present situation and Amazon would do the same thing as it has done in reality — it would just rewrite the whole thing and not pay the royalties. I suspect that it is not even about the fees — it is about control. Remember embrace and extend?

read original article here