Open source: a workable business model for small vendors?

Free open source software is very popular. You may be wondering if giving away open source software for free (but accepting donations) is a workable business model for small vendors like Wincent. Here are some numbers for WinSwitch for the period running from 10 March 2006 to 7 April 2006:

Downloads during version 3.2/3.2b/3.2.1 release cycle: 8,175

Server bandwidth (WinSwitch downloads only) during that period: 10GB

Days in release cycle: 28 days

Number of donations: 3

Total monetary value of donations: 20€

Ratio of downloads to donations: 2,275 to 1

Average donation per download: 0.0025€

These numbers are nothing new; they continue a trend that’s been running since WinSwitch was first released. Not factored in here are the costs in terms of programmer-hours required to write the software, nor the additional bandwidth consumed by visits to the WinSwitch website or downloads of the source code (the bandwidth figure is only for downloads of the WinSwitch disk image itself).

It’s hard to look at these numbers and think of any way in which the "open source + donations" model can work for the small vendor. My advice to anyone considering it is to only do it if you want to contribute something to the community in a one-way, non-reciprocal fashion; as a business model it is unworkable and at best can be considered as a means of promoting your brand.