What is Zoto’s Business Model?

Zoto is a photo-sharing web site that – while initially free to use – switched to a paid model late last year. There was speculation then that this move might have been triggered by money troubles. Then on March 22nd, Zoto’s CEO Kord Campbell announced on his blog that the software that drives the Zoto web site would be made available under the new BSD license from Google’s open source repository Google Code. In his blog entry Campbell wrote:

Open Source software isn’t necessarily free to use – it’s free as in to view and modify the source. The Zoto Server software will be free to use for some users. I’ll figure out what to do later with you big profitable people. Maybe we’ll do Paypal donations, or revenue share like PHPGallery.

Campbell expanded on this view in a comment on a ReadWriteWeb story covering his decision to release the Zoto software under an open source licence:

The BSD license is one of the few licenses that actually allows a separate license to be placed on the same code. That means I could put a separate commercial license on Zoto later, as I mention on the page.FWIW, it makes sense for someone to license the code from me if they are going to be using it in a commercial application. They might need install services, support, extra features added, etc., and it would be a requirement for them to use it.

Now it seems clear from these posts that Mr Campbell was expecting that a certain category of his users would need to buy a licence from him if they intended to use his Zoto software – specifically commercial or ‘big profitable people’. The problem is that the licence he has selected does not really give any incentive to commercial users to pay for a different licence as it provides all permissions necessary to use the software commercially. He also seems a little confused about the issue of licence exclusivity. The BSD license is not ‘one of the few’ licences to allow differing licences on the same code; all free and open source licences are non-exclusive, and as the copyright owner Mr Campbell is at liberty to license the code out under as many non-exclusive licences as he likes. The problem, as mentioned above, is that when the BSD licence is one of them, any more restrictive licences may seem unappealing to potential users, particularly if they also require the payment of a licensing fee.

News of this licensing puzzle spread quickly to the License-Discuss list of the Open Source Initiative:

It’s hosted on Google Code (http://code.google.com/p/zoto-server/) and is allegedly made available under the New BSD License. However, the description of the project contains this: “The server and the rest of the Zoto code base is now free for non-commercial use. If you want to use Zoto’s software in a commercial, for-profit environment, you can contact Kord Campbell at kordless@gmail.com, to inquire about licensing options for commercial applications.”

Doesn’t sound like they intend it to be open source to me. I wonder if Google will allow Zoto to continue to use their code hosting service under these terms?

Now as anyone who has followed the link to the Google Code site for Zoto will know, it no longer features the text quoted in the above post. Campbell responded to a query as to what he meant in the following way:

It was 5:30AM, and I wanted a way of addressing licensing the product to companies that may require an additional license to run the software. For example, last year we licensed the software to a company that required a support license be provided along with the original source code.

So whatever the original intention, it seems that now the business model Campbell is now describing is the one more traditionally associated with BSD-licensed software – services, warranties and training as a side-channel.

So what lessons can we learn from the confusion surrounding Zoto’s open source release? Firstly, it is an area of technology that remains deeply politicised, and as such it is extremely important to have both a clear understanding and a clear expression of your intentions available right from the start. Secondly, business models cannot be retrofitted easily. Now that the code is out there under a BSD license there is no way of suppressing its distribution under those terms.

Without knowing what Campbell’s intention is it is hard to say if he made the right licence choice. If he wants people to build businesses using this code whilst buying services and warranties from him then this licence is as at least as good as any (some people claim permissive licences like this are better for community development models). However, if he was planning to have people modifying and distributing his code it may well be that a more copyleft licence would have suited his purposes better, giving commercial users a clear reason to pay for a non-free licence to avoid the responsibility to distribute source with any modified derivative. In fact, given the inherently network-based functionality of Zoto’s software, it might be a prime candidate for application of the Affero GPL v3, which mandates that downstream adapters must cause their versions of the software to serve up their source code when requested, even if the software itself is not distributed. The Affero GPL v3 has been submitted to the OSI and is currently awaiting approval.

3 thoughts on “What is Zoto’s Business Model?

  1. nunovo

    Please excuse the off-topic response, this is an attempt to get a missing CEO to visit home.
    Over at the official Zoto webforum, a small group of users have been posting messages about their difficulty doing things like uploading photos, downloading photos, getting their login to work, making template changes. That much is normal. What’s not normal is that there have been no responses from anyone at Zoto for over a month. Not a word. No word of any kind. No routine communications. No mention of the news about going open source, for example. No news about the current situation and future prospects, nor about the cancellation of announced work.
    Despite that absence, various Zoto users have found bits of information via other websites, such as CEO Kord Campbell’s blog, designer kbarret’s blog, and miscellaneous reports at places like Splunk.
    Given the absence of communication on the home channels, the users who need help are feeling that they’ve been deliberately cut adrift, ignored for some unknown reasons – or no reason at all.
    What that means is that while the news about Zoto going open source might be cause for celebration for some people, it does nothing to explain the ongoing negelect of people who’ve paid to use a service and then found that it doesn’t work, and that nobody answers their queries.
    While this might be relevant to the above story for its implications of Zoto’s ability to sustain their side of any deal, it is really analogous to the wife who has to haul her husband out of the pub in order to get the domestic chores done.

  2. Pingback: something I said : Zoto: Watching Things Fall Apart

  3. Ross Gardler

    The Zoto page on Google removed the “confused” comments for a while, but they are back again now. Currently the page says:

    The server and the rest of the Zoto code base is now licensed under the New BSD License.

    You can read up on the BSD license here and here.

    Remember, the BSD license basically says any BSD code can be sold or included in proprietary products without any restrictions on the availability of the code or someone’s future behavior. As such, the BSD license also allows for the addition of extra commercial licenses. Some companies may desire or require these extra licenses to be able to run the software in their organization.

    If you require extra licenses to run Zoto’s software in a commercial environment, require custom features, or need commercial support, you can contact Kord Campbell at kordless@gmail.com, to inquire about the different licensing and payment options. If you don’t, then download it and have fun!

    There is nothing wrong with the commercial support option, however, under an open source licence, as your original post states, they cannot restrict commercial use in this way.

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