Etelos Adds Open-Source Hosting

Software-as-a-service provider Etelos announced a new addition to its offerings over the weekend: hosted installations of some major open source projects. This is yet another twist on the perennial problem of making money from open source: supporting software that other people write. Is there really a market here?

To be precise, you can now hop over to the Etelos site and provision your own hosted copy of phpBB, MediaWiki, WordPress, or SugarCRM. The basic pitch here is that this is one more way for open source developers to get their applications in front of potential users, and a way for businesses to easily set up this software without any in-house expertise.

Certainly the process is easy enough. You select an application from their catalog and click Add to Cart. Then you commit yourself to paying $4.95 per account per month, and they do the rest. With this model, Etelos is trying to remove one of the traditional friction points for small businesses trying to move to open source: the difficulty of setting up and maintaining servers.

With three of the applications they've chosen, this makes sense. WordPress, though, seems a curious choice for a hosted offering, considering that anyone can get all the free WordPress hosting they want straight from the source - for free. It's not clear that the advantages of dealing with a single vendor for all of your applications outweighs this price difference; certainly WordPress itself is built to take a considerable load.

On the whole, this strikes me as a fairly limited niche move. Yes, there will be organizations that want to use the software on offer, and are willing to pay $60 per user per year. But with price pressure from others giving away these applications, or equivalents (there are lots of places to get your own wiki for free), Etelos will need to make a strong argument on unique services to gain any traction.