How do vendors of open source software make money?
Where’s the catch you will wonder rightly. Nobody has something to give away for free, also the programmer of Open Source Software haven’t. Some of them do OSS programming as an everyday job for example because they work for a company which supports OSS and which wants to share a positive image with its customers. Others follow personal motivation like the desire for approval of the own achievement. There have been established complete business models around OSS too. Looking at commercial and OS software the control over the source code is the central point of the business model of the commercial software vendor. With OSS the source code is freely available – extended services like support and staff trainings usually are not.
The OSS business models
When you look at OSS software producers and their products you can identify four dominant business models:
- Some of the software vendors publish their software for free just to enhance product demand. For example you can employ this strategy to place the own product on the market if there is a commercial product or another product as market leader. In case the OSS is linked with a commercial product from the same vendor a growing demand for the OSS product can lead to an increase of demand for the commercial product too. Specific for this business model are different versions of one and the same product for example a Community Edition and an Enterprise Edition. The latter covers more functionality for which you have to pay.
- Some of the software vendor put a former commercial product under an OS license and release it for free download. Normally this happens not as a result of free will but as an effect of the general business competition in the market. If there is an equivalent product from the field of OS the whole business model is shifting to supporting services for the product because with the product itself no deal can be secured anymore.
- Some software vendors have specialized on supporting services. They develop, distribute and support OSS to create a demand for lucrative additional services. This could be the implementation and customization of the product or staff trainings and documentation manuals.
- Some of the vendors offer commercial licensing beside the normal OS product. That is legally possible as long as the software vendor itself is the author of the complete source code of the software.
In practice all of the four types are coming across at the same time. For many OS products an Enterprise Edition is available for purchase as well as a Community Edition which is free of charge. Additional services may be bought from the software publisher. Individual licensing is possible as well in most cases.
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