It has never worked as a business model. Although you can find many companies using free source tools, none of them has made years in a row at least zero profit from selling paid add-ons targeted to enhance free source packages.
From a marketing point of view it sounds promising to label a service offer as based off of a community driven tool, which is meant to focus on the user’s real needs as opposed to an abstract enterprise leader board’s considerations.
Presenting a business entity with employees making a living from and contributing to the free source ecosystem sounds like declaring the company as part of the sharing economy, and it may attract talent from the Z-generation, there’s nothing wrong with that.
The real problem is with those guys confusing the marketing tactics with a business strategy, and funding startups insisting on such a strategy. It’s never a pleasure to work for a service condemned to fail - it’s a high-stress environment, where the initial success moments are followed by an endless loop of “whatever I do it’s the wrong thing to do” moments.
The history of long and respectively short-lived free source projects demonstrates that the need for paid software add-ons is scarce and/or random, and the revenues collected from selling would eventually cover the spending with hardware and hosting for upkeeping such activities.
This happens because most people and companies using free tools don’t have sufficient resources to pay for the commercial alternatives of those tools, or cannot keep their offers competitive on their markets in the eventuality of using commercial software tools, consequently they are focused on avoiding operative spending as much as possible.
The long-lived free source projects are backed by strategic users, or are funded as side projects by financially stable organizations.
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