There are a few companies making money from FOSS.

The two business models I see the most that seem to work:

• free software, paid support
• free software, paid hosting/ “SaaS”

I am sorry to say some of what you write is not correct.

Red Hat — I know they had their slice of controversies lately, but still — is a ≃33bn company, how is that not making money? They sell solutions based on OSS (different from selling software!), which is one viable way of making money.

Other ways are: selling support, selling licence exceptions (when you are the sole copyright holder of the codebase, MySQL did that), sponsored development for new features, SaaS (bad!), customization for big enterprises/public actors, open-sourcing software but keeping assets proprietary (some games do that), and many more.

I designed something, it wasn’t software, though there was a very small amount of software in the final product and some iterations. I was advised to patent it, and could have.

The more I dug into it, the more I thought ‘this will stifle innovation’. My design was good, but by going copyleft the design is so much improved over anything I could have done. People with power management skills have increased efficiency, others with coding expertise have reduced the parts count, still more have added redundancies to make it failsafe.

It is a commercial product for a multinational, and a few small scale producers, but many more hobbyists have built it themselves by going to Mouser/Digikey etc. With a BOM.

I published it anonymously and have never made a dollar from it. I couldn’t be happier with that.

Not every productive human activity is a business model.

If you get together with your friends and bake a cake together, that’s not a business model. You still get a cake out of it, though.

It’s actually problem because the bad business model of the open source has made it’s software fall behind their propreitory alternatives?

What does “fall behind” mean in this context? Faster development cycles (i.e. more features/changes more often)?

Proprietary software is faster at generating bloat. Sure, sometimes there are some good ideas mixed in there that FOSS doesn’t have, but the only thing that’s keeping those aspects proprietary is intellectual property law and not some fundamental truth about FOSS v. Proprietary.

Even so, why is faster development more important than community? Why is it more important than freedom of information? Why is it more important than optimization, well-organized code, or mod-ability?

www.gnu.org/philosophy/philosophy.html

the four essential freedoms: (0) to run the program, (1) to study and change the program in source code form, (2) to redistribute exact copies, and (3) to distribute modified versions.

Why open source softwares are bad at making money?

I’m assuming you mean “Free Software(s)” since many “open source” softwares are proprietary and therefore as good at making money as any other corporate venture. (Insert a list here of all the failed tech products from the past 50 years for maximum irony)

The reason Free software is “bad at making money” is because the current global economic paradigm relies on some form of property to be profitable: i own something (a thing, a skill, an idea), you want it, I can rent it or sell it to you. In the sense of software, this is “Intellectual Property” aka owning the ideas.

Free Software’s philosophy is inherently pro-community and anti-private property, which means it will always be bad at playing Business’ game. Which is good, because the values that the Free Software movement holds have nothing to do with capitalist values.

Ironically, if you care about ownership, you should actually be pro-FOSS. It gives you the most control over what software is running on your computers at any given time, and therefore means that it’s closest to true ownership of your computers. Is it ownership if you’re not legally allowed to open it up and “look under the hood” or modify the code?

Is there a business model, besides subscription as many people can’t pay? Or am I wrong here?

Not being a paid developer, I don’t know much of the business side of FOSS development; i will offer that some devs make the source available but charge for compiled binaries and may or may not publish compilation instructions, meaning that casual users can support the devs financially and code literate users can choose whether to contribute to the project.

Solutions proposed to solve this problem

It’s only a problem to those looking to monetize any and all intellectual property. If you’re a dev and worried about starving, go work for a proprietary company. Leave greed out of FOSS.

Seriously, no ill-will. As much as I hate Micr*s*ft, I feel no anger toward all the devs working for them. Coders have gotta eat too, can’t blame them for working with proprietary software to do so.

Some examples of bad and good open source business model and whether it’s good or bad than their mainstream propreitory alternatives?

Good: any business model that preserves the four freedoms and copyleft

Bad: walled-garden models that require buy-in to have access to source code (whatever redhat’s doing with centos), museum models (“look, but don’t touch”) that let you see the code but have licenses that protect it from changes/redistribution (most of Microsoft’s “open source” projects)

Snark aside, “[better] or [worse] than…” is a very subjective evaluation. Better or worse than doing what? FOSS will always be worse at making money, but proprietary will always be incentivized to remove more rights from the users in favor of monetizing as many aspects of software use as possible. For FOSS the primary goal is creating the software in-and-of itself, for proprietary the main objective is profit. Their objectives are so different they aren’t even opposed: they’re orthogonal to each other.