The biggest problem with open-sourcing commercial software is the risk of a blatant ripoff.
Some entrepreneurial spirit will come along, replace the application icon, repackage the whole thing and start selling it as his own. Perhaps just in his own country, perhaps you won't even notice, but it will eventually surface and you will need to deal with the situation. Now the question is if you want to spend your time and nerves on resolving the issue or would you rather continue working on the product. Especially if you are a "lone programmer" and especially if opening the source doesn't give you much to begin with.
Let's say this happened, and someone in a random foreign country made a clone of my software and started selling it there. Would that really cut into my sales? Or would that perhaps increase the legitimacy and recognition for the type of software I'm selling, if not for the specific brand I'm hawking?
It has less to do with cutting into your sales, and more with jeopardizing your IP and ownership rights. If this sort of theft is left unattended, the other side may start asserting its non-existing rights and escalate the situation.
It all really comes down to the risk tolerance. Opening the source establishes great deal of a goodwill towards your customers and potentially provides you with an access to free improvements and bugfixes. On other hand it opens you to the risk of needing to actively protect your IP rights, which is something that not everyone want or can do.
That's not even getting into how emotionally draining these incidents can be. It requires a really thick skin and a strong ability to ignore being taken an advantage of. Again, not everyone's traits.
If the source is open, then anyone who bases a product on it has to abide by the license. Are you talking about the case of someone who downloads the source, and bases a derived product on it without abiding by the license and releasing the source code? Can't illegal distribution happen with closed source software as well? Or are you saying it's more likely to happen if the source is open, and therefore more of a potential headache?
So perhaps yours is a case in which open source doesn't make sense. My thesis wasn't that it always makes sense, but simply that micro-ISV developers should rationally consider whether it does in their particular business.
Can you give an example of where it does make sense?
I'll venture a guess that you probably think that it made sense for Digium to open source Asterisk. At first, it did seem to make sense since they made the telephony cards that it worked with the best.
However look at them now. Sangoma, Pika, NxtVox and many other companies are making cheaper telephony cards that work just as well as Digium's do. Now what does Digium do? They start selling a closed source version of Asterisk that has more features in it than the open source one.
Open source is really nice for users but not so much for long term business profits.
I don't know.. Having worked with the Digium source code before, I almost would rather that they had kept it to themselves. :)
Simply put, I think open source can make sense in products where the benefits (contributions/fixes, goodwill, marketing, increased customer comfort and therefore sales) outweigh any downsides (clones, etc).
One reason I made the post to begin with is because I don't think there are enough examples out there. Not because they can't be successful, but because there is a culture of fear of open source. Fear that your product will be ripped off, fear that you'll lose control of its development, and so on.
In many cases, those fears are unfounded. So I'm trying to develop my particular product as one example of software where open source does make sense. And I hope other small business do so as well.
Some entrepreneurial spirit will come along, replace the application icon, repackage the whole thing and start selling it as his own. Perhaps just in his own country, perhaps you won't even notice, but it will eventually surface and you will need to deal with the situation. Now the question is if you want to spend your time and nerves on resolving the issue or would you rather continue working on the product. Especially if you are a "lone programmer" and especially if opening the source doesn't give you much to begin with.