[Discuss] Business model for OSHW projects

[Jean-Marie Verdun]

Hi,

As some of you are soon aware I am a modest FreeCAD contributor. It 
happens that my company (a small SMB located in Europe with a sub in the 
US) is designing computers and is involved in various other Open 
Hardware initiatives (or things which are claiming to be open).

OSWA does represent to me one of the best path to sustain long term open 
source hardware. But we started to switch our business model about 3 
years ago from proprietary hardware to open hardware. We first design 
systems using proprietary tools like Solidworks and others for EDA. We 
then smoothly switch to open source software, without pains, but we are 
sustaining this approach by contributing our patches to the FOSS team 
that we use.

We boostrapped a couple of projects like RuggedPOD 
(http://ruggedpod.qyshare.com), and are making business by reselling 
OCP/OpenPower hardware or any other computer hardware related goods 
which are released under an Open Hardware license. We do that directly 
through a transparent and open website ( 
http://sales.horizon-computing.com , do not get there if you do not want 
marketing things ! ).

One of the challenge with face when designing IT, is tooling cost, and 
MOQ required to sustain the phase between prototypes state to 
pre-production units. As an example, RuggedPOD is the first micro 
datacenter in the world to sustain a PUE of 1 during a long period 
(higher than 5 months). We do have a running prototype in Paris for many 
months that our company sponsored, but the next step requires tooling 
cost higher than 150k$.

I am not sending this email to request money, but more to discuss with 
you on how we could find a way to finance such things to Open Hardware 
project. Crowd funding is not the best option, as RuggedPOD is a B2B 
tool, and crowd funding are mostly a B2C approach (we tested). Getting 
early adopters is not the solution, as it doesn't help to finance the 
tooling. Raising funds ? Does anybody know somebody who is financing 
open hardware project currently ?

Any other options ? The one we took, and this is how we financed the 
project, was through the sales we generate and keep some margin to 
sustain growth. The key showstopper we are currently hitting which is 
true, is that the system we are selling are not totally Open, for many 
reasons, the first one is that the tools are not there and we try to fix 
these issues, the other is that there is still a lot of work to get some 
core vendor adopting the philosophy but we are working on it, so core 
open hardware people like our community do not consume such things yet 
due to the lack of openness, but we face strong competition on the other 
side.

What is upsetting me the most, is that the foundations who are driving 
such initiative shall be leading such things.

By the way what do you think about this announcement, which I believe is 
great

https://www.fsf.org/news/gnu-toolchain-now-accepting-donations-with-the-support-of-the-free-software-foundation

So roughly, do we have any idea on how to sustain the cost of 
development for complex system ? My idea to keep some margin from sales 
is not bad, as long as the market growth, I am even ready to give that 
money to some non profit foundation who could decide to allocate these 
funds to priority projects.

After 3 years doing development and sales of OSHW, I strongly believe 
this is a big threat to the success of our movement.

vejmarie