Software companies focusing on the development
Development or developing may refer to:
Arts
*Development (music), the process by which thematic material is reshaped
* Photographic development
*Filmmaking, development phase, including finance and budgeting
* Development hell, when a proje ...
of open-source software
Open-source software (OSS) is Software, computer software that is released under a Open-source license, license in which the copyright holder grants users the rights to use, study, change, and Software distribution, distribute the software an ...
(OSS) employ a variety of business models
A business model describes how a Company, business organization creates, delivers, and captures value creation, value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-pub ...
to solve the challenge of making profits from software that is under an open-source license
Open-source licenses are software licenses that allow content to be used, modified, and shared. They facilitate free and open-source software (FOSS) development. Intellectual property (IP) laws restrict the modification and sharing of creative ...
. Each of these business strategies rest on the premise that users of open-source technologies are willing to purchase additional software features under proprietary licenses, or purchase other services or elements of value that complement the open-source software that is core to the business. This additional value can be, but not limited to, enterprise-grade features and up-time guarantees (often via a service-level agreement
A service-level agreement (SLA) is an agreement between a service provider and a customer. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user.
T ...
) to satisfy business or compliance requirements, performance and efficiency gains by features not yet available in the open source version, legal protection (e.g., indemnification from copyright or patent infringement), or professional support/training/consulting that are typical of proprietary software applications.
Historically, these business models started in the late 1990s and early 2000s as "
dual-licensing
Multi-licensing is the practice of distributing software under two or more different sets of terms and conditions. This may mean multiple different software licenses or sets of licenses. Prefixes may be used to indicate the number of licenses ...
" models (for example
MySQL
MySQL () is an Open-source software, open-source relational database management system (RDBMS). Its name is a combination of "My", the name of co-founder Michael Widenius's daughter My, and "SQL", the acronym for Structured Query Language. A rel ...
), and they have matured over time, giving rise to multiple variations as described in the sections below. Pure dual licensing models are not uncommon, as a more nuanced business approach to open source software businesses has developed. Many of these variations are referred to as
"open core" model, where the companies develop both open source software elements and other elements of value for a combined product.
A variety of open-source compatible business approaches have gained prominence in recent years, as illustrated and tracked by the Commercial Open Source Software Index (COSSI), a list of commercial open source companies that have reached at least US$100 million in revenue. Notable examples include
open core
The open-core model is a business model for the monetization of commercially produced open-source software. The open-core model primarily involves offering a "core" or crippleware, feature-limited version of a software product as free and open- ...
(sometimes referred to as
dual licensing
Multi-licensing is the practice of distributing software under two or more different sets of terms and conditions. This may mean multiple different software licenses or sets of licenses. Prefixes may be used to indicate the number of licenses ...
or
multi-licensing
Multi-licensing is the practice of distributing software under two or more different sets of terms and conditions. This may mean multiple different software licenses or sets of licenses. Prefixes may be used to indicate the number of licenses ...
),
software as a service
Software as a service (SaaS ) is a cloud computing service model where the provider offers use of application software to a client and manages all needed physical and software resources. SaaS is usually accessed via a web application. Unlike o ...
(not charging for the software but for the tooling and platform to consume the software as a service often via subscription),
freemium
Freemium, a portmanteau of the words "free" and "premium", is a pricing strategy by which a basic product or service is provided free of charge, but money (a premium) is charged for additional features, services, or virtual (online) or physical ( ...
, donation-based funding,
crowdfunding
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and Alternative Finance, alternative finance, to fund projects "withou ...
, and
crowdsourcing
Crowdsourcing involves a large group of dispersed participants contributing or producing goods or services—including ideas, votes, micro-tasks, and finances—for payment or as volunteers. Contemporary crowdsourcing often involves digit ...
.
There are several different types of business models for making
profit
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics), normal profit and economic profit
* Profit (real property), a nonpossessory inter ...
using OSS or
funding
Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm use ...
the creation and ongoing development and maintenance. The list below shows a series of current existing and legal commercial business models approaches in the context of open-source software and open-source licenses.
The acceptance of these approaches has been varied; some of these approaches are recommended (like
open core
The open-core model is a business model for the monetization of commercially produced open-source software. The open-core model primarily involves offering a "core" or crippleware, feature-limited version of a software product as free and open- ...
and selling services), others are accepted, while still others are considered controversial or even unethical by the open-source community. The underlying objective of these business models is to harness the size and international scope of the
open-source community. Depending on the project the funding options and their success differs for a sustainable commercial venture. The vast majority of commercial open-source companies experience a conversion ratio (as measured by the percentage of downloaders who buy something) well below 1%, so low-cost and highly-scalable marketing and sales functions are key to these firms' profitability.
Not selling code
Professional services
Open-source software can also be commercialized from selling
services
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a ...
, such as training,
technical support
Technical support, commonly shortened as tech support, is a customer service provided to customers to resolve issues, commonly with consumer electronics. This is commonly provided via call centers, online chat and email. Many companies provid ...
, or
consulting
A consultant (from "to deliberate") is a professional (also known as ''expert'', ''specialist'', see variations of meaning below) who provides advice or services in an area of specialization (generally to medium or large-size corporations). Cons ...
, rather than the software itself.
Another possibility is offering open-source software in
source code
In computing, source code, or simply code or source, is a plain text computer program written in a programming language. A programmer writes the human readable source code to control the behavior of a computer.
Since a computer, at base, only ...
form only, while providing
executable
In computer science, executable code, an executable file, or an executable program, sometimes simply referred to as an executable or binary, causes a computer "to perform indicated tasks according to encoded instruction (computer science), in ...
binaries to paying customers only, offering the commercial service of
compiling
In computing, a compiler is a computer program that translates computer code written in one programming language (the ''source'' language) into another language (the ''target'' language). The name "compiler" is primarily used for programs tha ...
and
packaging
Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a coo ...
of the software. Also, providing goods like physical
installation media (e.g.,
DVD
The DVD (common abbreviation for digital video disc or digital versatile disc) is a digital optical disc data storage format. It was invented and developed in 1995 and first released on November 1, 1996, in Japan. The medium can store any ki ...
s) can be a commercial service.
Open-source companies using this business model successfully are, for instance
RedHat,
IBM
International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
,
SUSE,
Hortonworks (for
Apache Hadoop
Apache Hadoop () is a collection of open-source software utilities for reliable, scalable, distributed computing. It provides a software framework for distributed storage and processing of big data using the MapReduce programming model. Hadoop wa ...
), Chef, and Percona (for open-source database software).
Branded merchandise
Some open-source organizations such as the
Mozilla Foundation
The Mozilla Foundation is an American non-profit organization that exists to support and collectively lead the Open-source software, open source Mozilla project. Founded in July 2003, the organization sets the policies that govern development, ...
and the
Wikimedia Foundation
The Wikimedia Foundation, Inc. (WMF) is an American 501(c)(3) nonprofit organization headquartered in San Francisco, California, and registered there as foundation (United States law), a charitable foundation. It is the host of Wikipedia, th ...
sell branded merchandise articles like
t-shirt
A T-shirt (also spelled tee shirt, or tee for short) is a style of fabric shirt named after the T shape of its body and sleeves. Traditionally, it has short sleeves and a round neckline, known as a '' crew neck'', which lacks a collar. T-shir ...
s and coffee mugs. This can be also seen as an additional service provided to the
user community
A virtual community is a social network of individuals who connect through specific social media, potentially crossing geographical and political boundaries in order to pursue mutual interests or goals. Some of the most pervasive virtual commu ...
.
Software as a service
Selling
subscriptions
The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service. The model was pioneered by publishers of books and periodicals in the 17th century. It i ...
for online accounts and server access to customers is one way of adding value to
open-source software
Open-source software (OSS) is Software, computer software that is released under a Open-source license, license in which the copyright holder grants users the rights to use, study, change, and Software distribution, distribute the software an ...
. Another way is combining desktop software with a service, called
software plus services
Software as a service (SaaS ) is a cloud computing service model where the provider offers use of application software to a client and manages all needed physical and software resources. SaaS is usually accessed via a web application. Unlike oth ...
. Most open core companies that use this approach also provide the software in a fashion suitable for
on-premises, do-it-yourself deployment. To some customers, however, there is significant value in a "plug and play" hosted product. Open source businesses that use this model often cater to small and medium enterprises who do not have the technology resources to run the software. Providing
cloud computing
Cloud computing is "a paradigm for enabling network access to a scalable and elastic pool of shareable physical or virtual resources with self-service provisioning and administration on-demand," according to International Organization for ...
services or
software as a service
Software as a service (SaaS ) is a cloud computing service model where the provider offers use of application software to a client and manages all needed physical and software resources. SaaS is usually accessed via a web application. Unlike o ...
(SaaS) without the release of the open-source software is not an open source deployment. With a SaaS approach, businesses no longer need to write new code from scratch, but instead can use the software they need by paying a subscription. Serverless technology allows businesses to completely transfer infrastructure management to the provider, which means that teams can create scalable applications more efficiently, cheaper, easier, and more reliably.
The FSF called the
server-side use-case without release of the source-code the "
ASP loophole in the GPLv2" and encourage therefore the use of the
GNU Affero General Public License
The GNU Affero General Public License (GNU AGPL) is a free, copyleft license published by the Free Software Foundation in November 2007, and based on the GNU GPL version 3 and the ''Affero General Public License'' (non-GNU).
It is intended fo ...
which plugged this hole in 2002.
Voluntary donations
There were experiments by Independent developers to fund development of open-source software
donation
A donation is a gift for Charity (practice), charity, humanitarian aid, or to benefit a cause. A donation may take various forms, including money, alms, Service (economics), services, or goods such as clothing, toys, food, or vehicles. A donati ...
-driven directly by the users, e.g. with the
Illumination Software Creator in 2012. Since 2011,
SourceForge
SourceForge is a web service founded by Geoffrey B. Jeffery, Tim Perdue, and Drew Streib in November 1999. SourceForge provides a centralized software discovery platform, including an online platform for managing and hosting open-source soft ...
allows users to donate to hosted projects that opted to accept donations, which is enabled via
PayPal
PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support E-commerce payment system, online money transfers; it serves as an electronic alter ...
.
Larger donation campaigns also exist. In 2004 the
Mozilla Foundation
The Mozilla Foundation is an American non-profit organization that exists to support and collectively lead the Open-source software, open source Mozilla project. Founded in July 2003, the organization sets the policies that govern development, ...
carried out a fundraising campaign to support the launch of the
Firefox
Mozilla Firefox, or simply Firefox, is a free and open-source web browser developed by the Mozilla Foundation and its subsidiary, the Mozilla Corporation. It uses the Gecko rendering engine to display web pages, which implements curr ...
1.0
web browser
A web browser, often shortened to browser, is an application for accessing websites. When a user requests a web page from a particular website, the browser retrieves its files from a web server and then displays the page on the user's scr ...
. It placed a two-page ad in the December 16 edition of ''
The New York Times
''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...
'' listing the names of the thousands who had donated.
In May 2019,
GitHub
GitHub () is a Proprietary software, proprietary developer platform that allows developers to create, store, manage, and share their code. It uses Git to provide distributed version control and GitHub itself provides access control, bug trackin ...
, a
Git
Git () is a distributed version control system that tracks versions of files. It is often used to control source code by programmers who are developing software collaboratively.
Design goals of Git include speed, data integrity, and suppor ...
-based software repository hosting, management and collaboration platform owned by
Microsoft
Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...
, launched a Sponsors program that allows people who support certain open source projects hosted on GitHub to donate money to developers who contribute and maintain the project.
Crowdsourcing
Crowdsourcing
Crowdsourcing involves a large group of dispersed participants contributing or producing goods or services—including ideas, votes, micro-tasks, and finances—for payment or as volunteers. Contemporary crowdsourcing often involves digit ...
is a type of participative online activity in which an individual, an institution, a nonprofit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, the voluntary undertaking of a task via a flexible open call. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate, bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and use to their advantage that which the user has brought to the venture, whose form will depend on the type of activity undertaken. Caveats in pursuing a Crowdsourcing strategy are to induce a substantial market model or incentive, and care has to be taken that the whole thing doesn't end up in an open source anarchy of adware and spyware plagiates, with a lot of broken solutions, started by people who just wanted to try it out, then gave up early, and a few winners. Popular examples for Crowdsourcing are
Linux
Linux ( ) is a family of open source Unix-like operating systems based on the Linux kernel, an kernel (operating system), operating system kernel first released on September 17, 1991, by Linus Torvalds. Linux is typically package manager, pac ...
,
Google Android, the
Pirate Party
Pirate Party is a label adopted by various Political party, political parties worldwide that share a set of values and policies focused on Civil and political rights, civil rights in the digital age. The fundamental principles of Pirate Partie ...
movement, and Wikipedia.
Training and certification
Offering training programs and certification courses related to the open-source software, catering to individuals or organizations, like
Red Hat Certification Program or Linux Professional Institute Certification Programs.
Selling users
Partnership with funding organizations
Other financial situations include partnerships with other companies.
Governments
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a m ...
,
universities
A university () is an educational institution, institution of tertiary education and research which awards academic degrees in several Discipline (academia), academic disciplines. ''University'' is derived from the Latin phrase , which roughly ...
, companies, and non-governmental organizations may develop internally or hire a contractor for custom in-house modifications, then release that code under an open-source license. Some organizations support the development of open-source software by
grants
Grant or Grants may refer to:
People
* Grant (given name), including a list of people and fictional characters
* Grant (surname), including a list of people and fictional characters
** Ulysses S. Grant (1822–1885), the 18th president of the U ...
or
stipend
A stipend is a regular fixed sum of money paid for services or to defray expenses, such as for scholarship, internship, or apprenticeship. It is often distinct from an income or a salary because it does not necessarily represent payment for work pe ...
s, like
Google's Summer of Code initiative founded in 2005.
Advertising-supported software
In order to commercialize FOSS (free and open-source software), many companies (including
Google
Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
,
Mozilla
Mozilla is a free software community founded in 1998 by members of Netscape. The Mozilla community uses, develops, publishes and supports Mozilla products, thereby promoting free software and open standards. The community is supported institution ...
, and
Canonical
The adjective canonical is applied in many contexts to mean 'according to the canon' the standard, rule or primary source that is accepted as authoritative for the body of knowledge or literature in that context. In mathematics, ''canonical exampl ...
) have moved towards an
economic model
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed ...
of
advertising-supported software. For instance, the open-source application
AdBlock Plus
Adblock Plus (ABP) is a free and open-source browser extension for content-filtering and ad blocking. It is developed by Eyeo GmbH, a German software company. The extension has been released for Mozilla Firefox (including mobile), Google Chro ...
gets paid by Google for letting
whitelist
A whitelist or allowlist is a list or register of entities that are being provided a particular privilege, service, mobility, access or recognition. Entities on the list will be accepted, approved and/or recognized. Whitelisting is the reverse of ...
ed ''Acceptable Ads'' bypassing the browser ad remover. As another example is
SourceForge
SourceForge is a web service founded by Geoffrey B. Jeffery, Tim Perdue, and Drew Streib in November 1999. SourceForge provides a centralized software discovery platform, including an online platform for managing and hosting open-source soft ...
, an open-source project service provider, has the revenue model of advertising banner sales on their website. In 2006, SourceForge reported quarterly takings of $6.5 million and $23 million in 2009.
Pre-selling code
Bounty driven development
The users of a particular software artifact may come together and pool money into an
open-source bounty for the implementation of a desired feature or functionality. Offering
bounties as funding has existed for some time. For instance,
Bountysource was a web platform which has been offering this funding model for open source software since 2003.
Another bounty source is companies or foundations that set up bounty programs for implemented features or bugfixes in open-source software relevant to them. For instance,
Mozilla
Mozilla is a free software community founded in 1998 by members of Netscape. The Mozilla community uses, develops, publishes and supports Mozilla products, thereby promoting free software and open standards. The community is supported institution ...
has been paying and funding freelance open-source programmers for
security bug
A security bug or security defect is a software bug that can be exploited to gain unauthorized access or privileges on a computer system. Security bugs introduce security vulnerabilities by compromising one or more of:
* Authentication of users ...
hunting and fixing since 2004.
Pre-order/crowdfunding/reverse-bounty model
A newer funding opportunity for open-source software projects is
crowdfunding
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and Alternative Finance, alternative finance, to fund projects "withou ...
, which shares similarities with the
pre-order
A pre-order is an order placed for an item that has not yet been released. The idea for pre-orders came because people found it hard to get popular items in stores because of their popularity. Companies then had the idea to allow customers to r ...
or
Praenumeration
Praenumeration (German: Pränumeration) was an early form of the subscription business model. It was a common business practice in the 18th century book trade in Germany. The publisher offered to sell a book that was planned but had not yet been pr ...
business model, as well as the reverse bounty model, typically organized over web platforms like
Kickstarter
Kickstarter, PBC is an American Benefit corporation, public benefit corporation based in Brooklyn, New York City, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative project ...
,
Indiegogo
Indiegogo is an American crowdfunding website founded in 2008 by Danae Ringelmann, Slava Rubin, and Eric Schell. Its headquarters are in San Francisco, California. The site is one of the first sites to offer crowd funding. Indiegogo allows peo ...
,
or
Bountysource (see also
comparison of crowd funding services
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance, to fund projects "without standard financial ...
). One example is the successfully funded Indiegogo campaign in 2013 by Australian programmer Timothy Arceri, who offered to implement an
OpenGL
OpenGL (Open Graphics Library) is a Language-independent specification, cross-language, cross-platform application programming interface (API) for rendering 2D computer graphics, 2D and 3D computer graphics, 3D vector graphics. The API is typic ...
4.3 extension for the
Mesa
A mesa is an isolated, flat-topped elevation, ridge, or hill, bounded from all sides by steep escarpments and standing distinctly above a surrounding plain. Mesas consist of flat-lying soft sedimentary rocks, such as shales, capped by a ...
library in two weeks for $2,500.
Arceri delivered the OpenGL extension code which was promptly merged upstream, and he later continued his efforts on Mesa with successive crowdfunding campaigns. Later, he found work as an employee in this domain with
Collabora
Collabora Ltd is a global private company headquartered in Cambridge, United Kingdom, with offices in Cambridge and Montreal. It provides open-source consultancy, training and products to companies.
Collabora's initial focus was instant messa ...
and in 2017 with
Valve
A valve is a device or natural object that regulates, directs or controls the flow of a fluid (gases, liquids, fluidized solids, or Slurry, slurries) by opening, closing, or partially obstructing various passageways. Valves are technically Pip ...
. Another example is the June 2013
crowdfunding
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and Alternative Finance, alternative finance, to fund projects "withou ...
on
Kickstarter
Kickstarter, PBC is an American Benefit corporation, public benefit corporation based in Brooklyn, New York City, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative project ...
of the
open source video game
Open or OPEN may refer to:
Music
* Open (band), Australian pop/rock band
* The Open (band), English indie rock band
* ''Open'' (Blues Image album), 1969
* ''Open'' (Gerd Dudek, Buschi Niebergall, and Edward Vesala album), 1979
* ''Open'' (Got ...
Cataclysm: Dark Days Ahead which raised the payment of a full-time developer for 3.5 months.
Patreon
Patreon (, ) is a monetization platform operated by Patreon, Inc., that provides business tools for content creators to run a subscription service and sell digital products. It helps artists and other creators earn a recurring income by provid ...
funding has also become an effective option, as the service gives the option to pay out each month to creators, many of whom intend to develop free and open-source software.
Selling licensing deals
Dual-licensing or Open Core
In a
dual licensing
Multi-licensing is the practice of distributing software under two or more different sets of terms and conditions. This may mean multiple different software licenses or sets of licenses. Prefixes may be used to indicate the number of licenses ...
model, the vendor develops software and offers it under an
open-source license
Open-source licenses are software licenses that allow content to be used, modified, and shared. They facilitate free and open-source software (FOSS) development. Intellectual property (IP) laws restrict the modification and sharing of creative ...
but also under separate proprietary license terms. The proprietary version can be licensed to finance the continued development of the free open-source version.
Customers may prefer a no-cost and open-source edition for testing, evaluation, proof of concept development, and small scale deployment. If the customer wishes to deploy the software at scale, or in proprietary distributed products, the customer then negotiates for a commercial license to an enterprise edition. Further, customers will learn of open-source software in a company's portfolio and offerings but generate business in other proprietary products and solutions, including commercial
technical support
Technical support, commonly shortened as tech support, is a customer service provided to customers to resolve issues, commonly with consumer electronics. This is commonly provided via call centers, online chat and email. Many companies provid ...
contracts and services. A popular example is
Oracle
An oracle is a person or thing considered to provide insight, wise counsel or prophetic predictions, most notably including precognition of the future, inspired by deities. If done through occultic means, it is a form of divination.
Descript ...
's
MySQL
MySQL () is an Open-source software, open-source relational database management system (RDBMS). Its name is a combination of "My", the name of co-founder Michael Widenius's daughter My, and "SQL", the acronym for Structured Query Language. A rel ...
database
In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and a ...
which is dual-licensed under a commercial proprietary license and also under the
GPLv2
The GNU General Public Licenses (GNU GPL or simply GPL) are a series of widely used free software licenses, or copyleft, ''copyleft'' licenses, that guarantee end users the freedom to run, study, share, or modify the software. The GPL was th ...
. Another example is the
Sleepycat License
Sleepycat Software, Inc. was the software company primarily responsible for maintaining the Berkeley DB packages from 1996 to 2006.
Company
Berkeley DB is freely-licensed database software originally developed at the University of California ...
.
Flask
Flask may refer to:
Container
* Hip flask, a small container used to carry liquid
* Laboratory flask, laboratory glassware for holding larger volumes than simple test tubes
** Erlenmeyer flask, a common laboratory flask with a flat bottom, a c ...
developer Armin Ronacher stated that the
AGPLv3 was a "terrible success" as "vehicle for dual commercial licensing" and noted that
MongoDB
MongoDB is a source-available, cross-platform, document-oriented database program. Classified as a NoSQL database product, MongoDB uses JSON-like documents with optional database schema, schemas. Released in February 2009 by 10gen (now MongoDB ...
,
RethinkDB
RethinkDB is a free and open-source, distributed document-oriented database originally created by the company of the same name. The database stores JSON documents with dynamic schemas, and is designed to facilitate pushing real-time updates for ...
,
OpenERP,
SugarCRM
SugarCRM is a software company based in Silicon Valley. It produces the on-premises and cloud-based web application Sugar, a customer relationship management (CRM) system.
SugarCRM's functionality includes sales force automation, sales-force au ...
as well as
WURFL utilizing the license for this purpose.
Dual license products are generally sold as a "community version" and an "enterprise version." In a pure dual licensing model, as was common before 2010, these versions are identical but available under a choice of licensing terms. Added proprietary software may help customers analyze data, or more efficiently deploy the software on their infrastructure or platform. Examples include the
IBM proprietary Linux software, where IBM contributes to the Linux open-source ecosystem, but it builds and delivers (to IBM's paying customers)
database software
In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and analy ...
,
middleware
Middleware is a type of computer software program that provides services to software applications beyond those available from the operating system. It can be described as "software glue".
Middleware makes it easier for software developers to imple ...
, and other software that runs on top of the open-source core. Other examples of proprietary products built on open-source software include
Red Hat Enterprise Linux
Red Hat Enterprise Linux (RHEL) is a commercial Linux distribution developed by Red Hat. Red Hat Enterprise Linux is released in server versions for x86-64, Power ISA, ARM64, and IBM Z and a desktop version for x86-64. Fedora Linux and ...
and
Cloudera
Cloudera, Inc. is an American data lake software company.
History
Cloudera, Inc. was formed on June 27, 2008 in Burlingame, California by Christophe Bisciglia, Amr Awadallah, Jeff Hammerbacher, and chief executive Mike Olson. Prior to Cloude ...
's
Apache Hadoop
Apache Hadoop () is a collection of open-source software utilities for reliable, scalable, distributed computing. It provides a software framework for distributed storage and processing of big data using the MapReduce programming model. Hadoop wa ...
-based software.
Selling certificates and use of trademark
Another financing approach is innovated by
Moodle
Moodle ( ) is a free and open-source learning management system written in PHP and distributed under the GNU General Public License. Moodle is used for blended learning, distance education, flipped classroom and other online learning project ...
, an open source
learning management system and community platform. The business model revolves around a network of commercial partners who are certified and therefore authorised to use the Moodle
name
A name is a term used for identification by an external observer. They can identify a class or category of things, or a single thing, either uniquely, or within a given context. The entity identified by a name is called its referent. A person ...
and
logo
A logo (abbreviation of logotype; ) is a graphic mark, emblem, or symbol used to aid and promote public identification and recognition. It may be of an abstract or figurative design or include the text of the name that it represents, as in ...
, and in turn provide a proportion of revenue to the Moodle Trust, which funds core development.
Re-licensing under a proprietary license
If a software product uses only own software and open-source software under a
permissive free software licence
A permissive software license, sometimes also called BSD-like or BSD-style license, is a free-software license which instead of copyleft protections, carries only minimal restrictions on how the software can be used, modified, and redistributed, ...
, a company can re-license the resulting software product under a proprietary license and sell the product without the source code or
software freedoms. For instance,
Apple Inc.
Apple Inc. is an American multinational corporation and technology company headquartered in Cupertino, California, in Silicon Valley. It is best known for its consumer electronics, software, and services. Founded in 1976 as Apple Comput ...
is an avid user of this approach by using source code and software from open-source projects. For example, the
BSD Unix
The Berkeley Software Distribution (BSD), also known as Berkeley Unix or BSD Unix, is a discontinued Unix operating system developed and distributed by the Computer Systems Research Group (CSRG) at the University of California, Berkeley, beginni ...
operating system
An operating system (OS) is system software that manages computer hardware and software resources, and provides common daemon (computing), services for computer programs.
Time-sharing operating systems scheduler (computing), schedule tasks for ...
kernel (under the
BSD license
BSD licenses are a family of permissive free software licenses, imposing minimal restrictions on the use and distribution of covered software. This is in contrast to copyleft licenses, which have share-alike requirements. The original BSD lic ...
) was used in
Apple's Mac
Mac or MAC may refer to:
Common meanings
* Mac (computer), a line of personal computers made by Apple Inc.
* Mackintosh, a raincoat made of rubberized cloth
* Mac, a prefix to surnames derived from Gaelic languages
* McIntosh (apple), a Canadi ...
PCs that were sold as proprietary products. Another variant is to re-license the software under a license that allows modification, but restricts commercial use.
Selling proprietary additives
Selling optional proprietary extensions
Some companies sell proprietary but optional extensions, modules,
plugins or
add-ons to an open-source software product. This approach is a variant of the
freemium
Freemium, a portmanteau of the words "free" and "premium", is a pricing strategy by which a basic product or service is provided free of charge, but money (a premium) is charged for additional features, services, or virtual (online) or physical ( ...
business model. The proprietary software may be intended to let customers get more value out of their data, infrastructure, or platform, e.g., operate their infrastructure/platform more effectively and efficiently, manage it better, or secure it better. Examples include the
IBM proprietary Linux software, where IBM contributes to the Linux open-source ecosystem, but it builds and delivers (to IBM's paying customers)
database software
In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and analy ...
,
middleware
Middleware is a type of computer software program that provides services to software applications beyond those available from the operating system. It can be described as "software glue".
Middleware makes it easier for software developers to imple ...
, and other software that runs on top of the open-source core. Other examples of proprietary products built on open-source software include
Red Hat Enterprise Linux
Red Hat Enterprise Linux (RHEL) is a commercial Linux distribution developed by Red Hat. Red Hat Enterprise Linux is released in server versions for x86-64, Power ISA, ARM64, and IBM Z and a desktop version for x86-64. Fedora Linux and ...
and
Cloudera
Cloudera, Inc. is an American data lake software company.
History
Cloudera, Inc. was formed on June 27, 2008 in Burlingame, California by Christophe Bisciglia, Amr Awadallah, Jeff Hammerbacher, and chief executive Mike Olson. Prior to Cloude ...
's
Apache Hadoop
Apache Hadoop () is a collection of open-source software utilities for reliable, scalable, distributed computing. It provides a software framework for distributed storage and processing of big data using the MapReduce programming model. Hadoop wa ...
-based software. Some companies appear to re-invest a portion of their financial profits from the sale of proprietary software back into the open source infrastructure.
The approach can be problematic with many open source licenses ("not license conform") if not carried out with sufficient care. For instance, mixing proprietary code and open-source licensed code in
statically linked libraries or compiling all source code together in a software product might violate open-source licenses, while keeping them separated by interfaces and
dynamic-link libraries would adhere to license conform.
Selling required proprietary parts of a software product
A variant of the approach above is the keeping of required data content (for instance a
video game
A video game or computer game is an electronic game that involves interaction with a user interface or input device (such as a joystick, game controller, controller, computer keyboard, keyboard, or motion sensing device) to generate visual fe ...
's audio, graphic, and other art assets) of a software product proprietary while making the software's source code open-source. While this approach is completely legitimate and compatible with most open-source licenses, customers have to buy the content to have a complete and working software product.
Restrictive licenses can then be applied on the content, which prevents the redistribution or re-selling of the complete software product. Examples for open-source developed software are
Kot-in-Action Creative Artel video game ''Steel Storm'', engine
GPLv2
The GNU General Public Licenses (GNU GPL or simply GPL) are a series of widely used free software licenses, or copyleft, ''copyleft'' licenses, that guarantee end users the freedom to run, study, share, or modify the software. The GPL was th ...
licensed while the artwork is
CC BY-NC-SA 3.0 licensed,
and ''
Frogatto & Friends'' with an own developed open-source engine and commercialization via the copyrighted game assets for
iPhone
The iPhone is a line of smartphones developed and marketed by Apple that run iOS, the company's own mobile operating system. The first-generation iPhone was announced by then–Apple CEO and co-founder Steve Jobs on January 9, 2007, at ...
,
BlackBerry
BlackBerry is a discontinued brand of handheld devices and related mobile services, originally developed and maintained by the Canadian company Research In Motion (RIM, later known as BlackBerry Limited) until 2016. The first BlackBerry device ...
and
MacOS
macOS, previously OS X and originally Mac OS X, is a Unix, Unix-based operating system developed and marketed by Apple Inc., Apple since 2001. It is the current operating system for Apple's Mac (computer), Mac computers. With ...
.
Other examples are ''
Arx Fatalis
''Arx Fatalis'' is a 2002 action role-playing game developed by Arkane Studios and released for Windows and Xbox. The game is played from a first-person perspective and is set on a world whose sun has failed, forcing the above-ground creatures t ...
'' (by
Arkane Studios
Arkane Studios SASU is a French video game developer based in Lyon. It was founded in 1999, and released its first game, ''Arx Fatalis'', in 2002. The studio has created the popular Dishonored (series), ''Dishonored'' series as well as developi ...
) and ''
Catacomb 3-D'' (by
Flat Rock Software) with source code opened to the public delayed after release, while copyrighted assets and binaries are still sold on
gog.com as
digital distribution
Digital distribution, also referred to as content delivery, online distribution, or electronic software distribution, among others, is the delivery or distribution of information or materials through digital platforms. The distribution of digital ...
.
Richard Stallman stated that freedom for works for art or entertainment are not required.
The similar
product bundling
In marketing, product bundling is offering several products or services for sale as one combined product or service package. It is a common feature in many imperfectly competitive product and service markets. Industries engaged in the practice ...
of an open-source software product with hardware which prevents users from running modified versions of the software is called
tivoization
Tivoization () is the practice of designing hardware that incorporates software under the terms of a copyleft software license like the GNU General Public License (GNU GPL), but uses hardware restrictions or digital rights management (DRM) to p ...
and is legal with most open-source licenses except
GPLv3
The GNU General Public Licenses (GNU GPL or simply GPL) are a series of widely used free software licenses, or ''copyleft'' licenses, that guarantee end users the freedom to run, study, share, or modify the software. The GPL was the first ...
, which explicitly prohibits this use-case.
Selling proprietary update systems
Another variant of the approach above, mainly use for data-intensive, data-centric software programs, is the keeping of all versions of the software under a free and open-source software license, but refraining from providing
update scripts from a ''n'' to an ''n''+1 version. Users can still deploy and run the open source software. However, any update to the next version requires either exporting the data, reinstalling the new version, then reimporting the data to the new version, or subscribing to the proprietary update system, or studying the two versions and recreating the scripts from scratch.
This practice does not conform with the
free software principles as espoused by the FSF. Richard Stallman condemns this practice and names it "diachronically trapped software".
Selling without proprietary license
All of the above methods follows from the traditional approach in the selling software, where Software is licensed for installation and execution on a user- or customer-supplied infrastructure. In the classic software product business, revenues typically originate from selling software upgrades to the customer. However, it's also practicing selling exactly the same programs or add-ons but without proprietary licensing. For example, applications like ardour, radium or
fritzing
Fritzing is an open-source software, open-source initiative to develop amateur or hobby CAD software for the Electronic design automation, design of electronics hardware, intended to allow designers and artists to build more permanent circuits fro ...
it's completely free software on GPL license but there is a fee to get the official binary, often bundled with tech support or the privileges of attracting developers' attention to adding new functionalities to the program. It is also practiced to sell both source code and binaries, as
Red Hat
Red Hat, Inc. (formerly Red Hat Software, Inc.) is an American software company that provides open source software products to enterprises and is a subsidiary of IBM. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North ...
did.
This practice does conform with the free software principles as espoused by the FSF.
Other common business models
Obfuscation of source code
An approach to allow commercialization under some open-source licenses while still protecting crucial business secrets,
intellectual property
Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
and technical know-how is
obfuscation
Obfuscation is the obscuring of the intended meaning of communication by making the message difficult to understand, usually with confusing and ambiguous language. The obfuscation might be either unintentional or intentional (although intent ...
of source code. This approach was used in several cases, for instance by
Nvidia
Nvidia Corporation ( ) is an American multinational corporation and technology company headquartered in Santa Clara, California, and incorporated in Delaware. Founded in 1993 by Jensen Huang (president and CEO), Chris Malachowsky, and Curti ...
in their open-source
graphic card
A graphics card (also called a video card, display card, graphics accelerator, graphics adapter, VGA card/VGA, video adapter, display adapter, or colloquially GPU) is a computer expansion card that generates a feed of graphics output to a displa ...
device drivers. This practice is used to get the open-source-friendly propaganda without bearing the inconveniences. There has been debate in the free-software/open-source community on whether it is illegal to skirt
copyleft
Copyleft is the legal technique of granting certain freedoms over copies of copyrighted works with the requirement that the same rights be preserved in derivative works. In this sense, ''freedoms'' refers to the use of the work for any purpose, ...
software licenses by releasing source code in obfuscated form, such as in cases in which the author is less willing to make the source code available. The general consensus was that while unethical, it was not considered a violation.
The
Free Software Foundation
The Free Software Foundation (FSF) is a 501(c)(3) non-profit organization founded by Richard Stallman on October 4, 1985. The organisation supports the free software movement, with the organization's preference for software being distributed ...
is against this practice. The
GNU General Public License
The GNU General Public Licenses (GNU GPL or simply GPL) are a series of widely used free software licenses, or ''copyleft'' licenses, that guarantee end users the freedom to run, study, share, or modify the software. The GPL was the first ...
since version 2 has defined "source code" as "the preferred form of the work for making modifications to it." This is intended to prevent the release of obfuscated source code.
Delayed open-sourcing
Some companies provide the latest version available only to paying customers. A vendor
forks
In cutlery or kitchenware, a fork (from 'pitchfork') is a Eating utensil, utensil, now usually made of metal, whose long handle terminates in a head that branches into several narrow and often slightly curved tine (structural), tines with whic ...
a non-
copyleft
Copyleft is the legal technique of granting certain freedoms over copies of copyrighted works with the requirement that the same rights be preserved in derivative works. In this sense, ''freedoms'' refers to the use of the work for any purpose, ...
software project then adds closed-source additions to it and sells the resulting software. After a fixed time period the
patches are released back
upstream under the same license as the rest of the codebase. This business model is called version lagging or time delaying.
For instance, 2016 the
MariaDB Corporation
MariaDB is a community-developed, commercially supported fork of the MySQL relational database management system (RDBMS), intended to remain free and open-source software under the GNU General Public License. Development is led by some of the or ...
created for business compatible "delayed open-sourcing" the
source-available
Source-available software is software released through a source code distribution model that includes arrangements where the source can be viewed, and in some cases modified, but without necessarily meeting the criteria to be called ''open-source ...
''Business source license'' (BSL) which automatically
relicenses after three years to the
FOSS
Free and open-source software (FOSS) is software available under a license that grants users the right to use, modify, and distribute the software modified or not to everyone free of charge. FOSS is an inclusive umbrella term encompassing free ...
GPL.
This approach guarantees licensees that they have source code access (e.g. for
code audit
A software code audit is a comprehensive analysis of source code
In computing, source code, or simply code or source, is a plain text computer program written in a programming language. A programmer writes the human readable source code to co ...
s), are not locked into a
closed platform
A closed platform, walled garden, or closed ecosystem is a software system wherein the carrier or service provider has control over applications, content, and/or media, and restricts convenient access to non-approved applicants or content. This ...
, or suffer from
planned obsolescence
In economics and industrial design, planned obsolescence (also called built-in obsolescence or premature obsolescence) is the concept of policies planning or designing a good (economics), product with an artificially limited Product lifetime, u ...
, while for the software developer a time-limited exclusive commercialization is possible.
In 2017 followed version 1.1, revised with feedback also from
Bruce Perens
Bruce Perens (born around 1958) is an American computer programmer and advocate in the free software movement. He created ''The Open Source Definition'' and published the first formal announcement and manifesto of open source. He co-founded the ...
.
However, this approach works only with own software or
permissive licensed code parts, as there is no copyleft FOSS license available which allows the time delayed opening of the source code after distributing or selling of a software product.
Open sourcing on end-of-life
An extreme variant of "delayed open-sourcing" is a business practice popularized by
id Software
id Software LLC () is an American video game developer based in Richardson, Texas. It was founded on February 1, 1991, by four members of the computer company Softdisk: game programmer, programmers John Carmack and John Romero, game designer T ...
and
3D Realms
3D Realms Entertainment ApS is a video game publisher based in Aalborg, Denmark. Scott Miller founded the company in his parents' home in Garland, Texas, in 1987 as Apogee Software Productions to release his game '' Kingdom of Kroz''. In the ...
,
which released several software products under a
free software license
A free-software license is a notice that grants the recipient of a piece of software extensive rights to modify and redistribute that software. These actions are usually prohibited by copyright law, but the rights-holder (usually the author) ...
after a long proprietary commercialization time period and the
return of investment was achieved. The motivation of companies following this practice of releasing the source code when a software reaches the commercial
end-of-life, is to prevent that their software becomes unsupported
Abandonware
Abandonware is a term for software, typically video games, that are no longer for sale by conventional means and are distributed by warez websites for free. The use of the "abandonware" term is controversial, as distributing out-of-print softw ...
or even get lost due to
digital obsolescence
Digital obsolescence is the risk of data loss because of inabilities to access digital assets, due to the hardware or software required for information retrieval being repeatedly replaced by newer devices and systems, resulting in increasingly ...
.
This gives the
user communities the chance to continue development and support of the software product themselves as an open-source software project.
Many examples from the
video game
A video game or computer game is an electronic game that involves interaction with a user interface or input device (such as a joystick, game controller, controller, computer keyboard, keyboard, or motion sensing device) to generate visual fe ...
domain are in the
list of commercial video games with later released source code
This is a list of commercial video games with later released available source code. The source code of these commercially developed and distributed video games is available to the public or the games' communities.
Background
Commercial video ga ...
.
Popular non-game software examples are the
Netscape Communicator
Netscape Communicator (or ''Netscape 4'') is a discontinued Internet suite produced by Netscape Communications Corporation, and was the fourth major release in the Netscape line of browsers. It was first in beta in 1996 and was released in Jun ...
which was open-sourced in 1998
and
Sun Microsystems
Sun Microsystems, Inc., often known as Sun for short, was an American technology company that existed from 1982 to 2010 which developed and sold computers, computer components, software, and information technology services. Sun contributed sig ...
's
office suite
Productivity software (also called personal productivity software or office productivity software) is application software used for producing information (such as documents, presentations, worksheets, databases, charts, graphs, digital paintin ...
,
StarOffice
StarOffice is a discontinued proprietary software, proprietary office suite. Its source code continues today in derived open-source office suites Collabora Online and LibreOffice. StarOffice supported the OpenOffice.org XML file format, as well ...
, which was released in October 2000 at its commercial end of life. Both releases made foundational contributions to now prominent open-source projects, namely
Mozilla Firefox
Mozilla Firefox, or simply Firefox, is a free and open-source web browser developed by the Mozilla Foundation and its subsidiary, the Mozilla Corporation. It uses the Gecko rendering engine to display web pages, which implements curren ...
and
OpenOffice.org
OpenOffice.org (OOo), commonly known as OpenOffice, is a discontinued open-source office suite. Active successor projects include LibreOffice (the most actively developed) and Collabora Online, with Apache OpenOffice being considered mostly d ...
/
LibreOffice
LibreOffice () is a free and open-source office productivity software suite developed by The Document Foundation (TDF). It was created in 2010 as a fork of OpenOffice.org, itself a successor to StarOffice. The suite includes applications ...
.
Funding
Unlike proprietary off-the-shelf software that come with restrictive licenses, open-source software is distributed freely, through the web and in physical media. Because creators cannot require each user to pay a license fee to fund development this way, a number of alternative development funding models have emerged.
An example of those funding models is when bespoke software is developed as a consulting project for one or more customers who request it. These customers pay developers to have this software developed according to their own needs and they could also closely direct the developers' work. If both parties agree, the resulting software could then be publicly released with an open-source license in order to allow subsequent adoption by other parties. That agreement could reduce the costs paid by the clients while the original developers (or independent consultants) can then charge for training, installation,
technical support
Technical support, commonly shortened as tech support, is a customer service provided to customers to resolve issues, commonly with consumer electronics. This is commonly provided via call centers, online chat and email. Many companies provid ...
, or further customization if and when more interested customers would choose to use it after the initial release.
There also exist
stipend
A stipend is a regular fixed sum of money paid for services or to defray expenses, such as for scholarship, internship, or apprenticeship. It is often distinct from an income or a salary because it does not necessarily represent payment for work pe ...
s to support the development of open source software, such as
Google
Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
's
Summer of Code and
Outreachy.
Another approach to funding is to provide the software freely, but sell licenses to proprietary add-ons such as data libraries. For instance, an open-source
CAD program may require parts libraries which are sold on a subscription or flat-fee basis. Open-source software can also promote the sale of specialized hardware that it interoperates with, some example cases being the
Asterisk
The asterisk ( ), from Late Latin , from Ancient Greek , , "little star", is a Typography, typographical symbol. It is so called because it resembles a conventional image of a star (heraldry), heraldic star.
Computer scientists and Mathematici ...
telephony software developed by PC-telephony hardware manufacturer
Digium
Digium, Inc. is a communications technology company based in Huntsville, Alabama, and since 2018, a subsidiary of Sangoma Technologies Corporation. The company makes VoIP business phone systems, IP phones, and hardware products. It was founded ...
and the
Robot Operating System
Robot Operating System (ROS or ros) is an Open-source software, open-source robotics middleware suite. Although ROS is not an operating system (OS) but a set of software frameworks for robot software software development, development, it provide ...
(ROS) robotics platform by Willow Garage and Stanford AI Labs. Many open source software projects have begun as research projects within universities, as personal projects of students or professors, or as tools to aid scientific research. The influence of universities and research institutions on open-source shows in the number of projects named after their host institutions, such as
BSD Unix
The Berkeley Software Distribution (BSD), also known as Berkeley Unix or BSD Unix, is a discontinued Unix operating system developed and distributed by the Computer Systems Research Group (CSRG) at the University of California, Berkeley, beginni ...
,
CMU Common Lisp
CMUCL is a free Common Lisp implementation, originally developed at Carnegie Mellon University.
CMUCL runs on most Unix-like platforms, including Linux and BSD; there is an experimental Windows port as well. Steel Bank Common Lisp is derived fr ...
, or the
NCSA HTTPd
NCSA HTTPd is a discontinued web server originally developed at the NCSA at the University of Illinois at Urbana–Champaign by Robert McCool and others. First released in 1993, it was among the earliest web servers developed, following Tim Bern ...
which evolved into
Apache
The Apache ( ) are several Southern Athabaskan language-speaking peoples of the Southwestern United States, Southwest, the Southern Plains and Northern Mexico. They are linguistically related to the Navajo. They migrated from the Athabascan ho ...
.
Companies may employ developers to work on open-source projects that are useful to the company's infrastructure: in this case, it is developed not as a product to be sold but as a sort of shared public utility. A local bug-fix or solution to a software problem, written by a developer either at a company's request or to make his/her own job easier, can be released as an open-source contribution without costing the company anything. A larger project such as the Linux kernel may have contributors from dozens of companies which use and depend upon it, as well as hobbyist and research developers.
A new funding approach for open-source projects is
crowdfunding
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and Alternative Finance, alternative finance, to fund projects "withou ...
, organized over web platforms like
Kickstarter
Kickstarter, PBC is an American Benefit corporation, public benefit corporation based in Brooklyn, New York City, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative project ...
,
Indiegogo
Indiegogo is an American crowdfunding website founded in 2008 by Danae Ringelmann, Slava Rubin, and Eric Schell. Its headquarters are in San Francisco, California. The site is one of the first sites to offer crowd funding. Indiegogo allows peo ...
, or
Bountysource.
Liberapay
Liberapay is a non-profit platform for recurrent donations. It is maintained by a non-profit organization of the same name, registered in Querrien, France in 2015.
Liberapay is primarily aimed at funding free and open-source software, Art, art ...
is a crowdfunding platform, primarily for open-source projects, that is itself open-source.
Challenges
Open-source software
Open-source software (OSS) is Software, computer software that is released under a Open-source license, license in which the copyright holder grants users the rights to use, study, change, and Software distribution, distribute the software an ...
can be sold and used in general
commercially. Also, commercial open-source applications have been a part of the
software industry
The software industry includes businesses for development, maintenance and publication of software that are using different business models, mainly either "license/maintenance based" (on-premises) or " Cloud based" (such as SaaS, PaaS, IaaS, ...
for some time.
While commercialization or funding of open-source software projects is possible, it is considered challenging.
Since several
open-source license
Open-source licenses are software licenses that allow content to be used, modified, and shared. They facilitate free and open-source software (FOSS) development. Intellectual property (IP) laws restrict the modification and sharing of creative ...
s stipulate that authors of derivative works must distribute them under an open-source (
copyleft
Copyleft is the legal technique of granting certain freedoms over copies of copyrighted works with the requirement that the same rights be preserved in derivative works. In this sense, ''freedoms'' refers to the use of the work for any purpose, ...
) license, ISVs and VARs have to develop new legal and technical mechanisms to foster their commercial goals,
as many traditional mechanisms are not directly applicable anymore.
Traditional business wisdom suggests that a company's methods, assets, and intellectual properties should remain concealed from market competitors (
trade secret
A trade secret is a form of intellectual property (IP) comprising confidential information that is not generally known or readily ascertainable, derives economic value from its secrecy, and is protected by reasonable efforts to maintain its conf ...
) as long as possible to maximize the profitable commercialization time of a new product. Open-source software development minimizes the effectiveness of this tactic; development of the product is usually performed in view of the public, allowing competing projects or
clones to incorporate new features or improvements as soon as the public code repository is updated, as permitted by most open-source licenses. Also in the computer hardware domain, a hardware producer who provides free and open software drivers reveals the knowledge about hardware implementation details to competitors, who might use this knowledge to catch up.
Therefore, there is considerable debate about whether vendors can make a sustainable business from an open-source strategy. In terms of a traditional software company, this is probably the wrong question to ask. Looking at the landscape of open source applications, many of the larger ones are sponsored (and largely written) by system companies such as
IBM
International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
who may not have an objective of software license revenues. Other software companies, such as Oracle and Google, have sponsored or delivered significant open-source code bases. These firms' motivation tends to be more strategic, in the sense that they are trying to change the rules of a marketplace and reduce the influence of vendors such as Microsoft. Smaller vendors doing open-source work may be less concerned with immediate revenue growth than developing a large and loyal community, which may be the basis of a corporate valuation at merger time.
FOSS and economy
According to
Yochai Benkler
Yochai Benkler ( ; born 1964) is an Israeli-American author and the Berkman Professor of Entrepreneurial Legal Studies at Harvard Law School. He is also a faculty co-director of the Berkman Klein Center for Internet & Society at Harvard Univers ...
, the Berkman Professor for Entrepreneurial Legal Studies at
Harvard Law School
Harvard Law School (HLS) is the law school of Harvard University, a Private university, private research university in Cambridge, Massachusetts. Founded in 1817, Harvard Law School is the oldest law school in continuous operation in the United ...
, free software is the most visible part of a new economy of
commons-based peer production of information, knowledge, and culture. As examples, he cites a variety of FOSS projects, including both free software and open source.
This new economy is already under development. In order to commercialize FOSS, many companies,
Google
Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
being the most successful, are moving towards an
economic model
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed ...
of
advertising-supported software. In such a model, the only way to increase revenue is to make the advertising more valuable.
Facebook
Facebook is a social media and social networking service owned by the American technology conglomerate Meta Platforms, Meta. Created in 2004 by Mark Zuckerberg with four other Harvard College students and roommates, Eduardo Saverin, Andre ...
has recently come under fire for using novel user tracking methods to accomplish this.
This new economy is not without alternatives. Apple's
App Stores have proven very popular with both users and developers. The Free Software Foundation considers Apple's App Stores to be
incompatible with its GPL and complained that Apple was infringing on the GPL with its
iTunes
iTunes is a media player, media library, and mobile device management (MDM) utility developed by Apple. It is used to purchase, play, download and organize digital multimedia on personal computers running the macOS and Windows operating s ...
terms of use. Rather than change those terms to comply with the GPL, Apple removed the GPL-licensed products from its App Stores. The authors of
VLC, one of the GPL-licensed programs at the center of those complaints, recently began the process to switch from the GPL to the
LGPL
The GNU Lesser General Public License (LGPL) is a free-software license published by the Free Software Foundation (FSF). The license allows developers and companies to use and integrate a software component released under the LGPL into their own ...
and
MPL.
Examples
Much of the Internet runs on open-source software tools and utilities such as
Linux
Linux ( ) is a family of open source Unix-like operating systems based on the Linux kernel, an kernel (operating system), operating system kernel first released on September 17, 1991, by Linus Torvalds. Linux is typically package manager, pac ...
,
Apache
The Apache ( ) are several Southern Athabaskan language-speaking peoples of the Southwestern United States, Southwest, the Southern Plains and Northern Mexico. They are linguistically related to the Navajo. They migrated from the Athabascan ho ...
,
MySQL
MySQL () is an Open-source software, open-source relational database management system (RDBMS). Its name is a combination of "My", the name of co-founder Michael Widenius's daughter My, and "SQL", the acronym for Structured Query Language. A rel ...
, and
PHP
PHP is a general-purpose scripting language geared towards web development. It was originally created by Danish-Canadian programmer Rasmus Lerdorf in 1993 and released in 1995. The PHP reference implementation is now produced by the PHP Group. ...
, known as the
LAMP stack for web servers. Using open source appeals to software developers for three main reasons: low or no cost, access to
source code
In computing, source code, or simply code or source, is a plain text computer program written in a programming language. A programmer writes the human readable source code to control the behavior of a computer.
Since a computer, at base, only ...
they can tailor themselves, and a shared community that ensures a generally robust code base, with quick fixes for new issues.
Despite doing much business in proprietary software, some companies like
Oracle Corporation
Oracle Corporation is an American Multinational corporation, multinational computer technology company headquartered in Austin, Texas. Co-founded in 1977 in Santa Clara, California, by Larry Ellison, who remains executive chairman, Oracle was ...
and
IBM
International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
participated in developing
free and open-source software
Free and open-source software (FOSS) is software available under a license that grants users the right to use, modify, and distribute the software modified or not to everyone free of charge. FOSS is an inclusive umbrella term encompassing free ...
to deter from
monopolies
A monopoly (from Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable sub ...
and take a portion of
market share
Market share is the percentage of the total revenue or sales in a Market (economics), market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those ...
for themselves. See
Commercial open-source applications for the list of current commercial open-source offerings.
Netscape
Netscape Communications Corporation (originally Mosaic Communications Corporation) was an American independent computer services company with headquarters in Mountain View, California, and then Dulles, Virginia. Its Netscape web browser was o ...
's actions were an example of this, and thus
Mozilla Firefox
Mozilla Firefox, or simply Firefox, is a free and open-source web browser developed by the Mozilla Foundation and its subsidiary, the Mozilla Corporation. It uses the Gecko rendering engine to display web pages, which implements curren ...
has become more popular, getting market share from
Internet Explorer
Internet Explorer (formerly Microsoft Internet Explorer and Windows Internet Explorer, commonly abbreviated as IE or MSIE) is a deprecation, retired series of graphical user interface, graphical web browsers developed by Microsoft that were u ...
.
*
Active Agenda is offered for free, but requires all extensions to be shared back with the world community. The project sells a "Non-Reciprocal Private License" to anyone interested in keeping module extensions private.
*
Adobe Systems
Adobe Inc. ( ), formerly Adobe Systems Incorporated, is an American software, computer software company based in San Jose, California. It offers a wide range of programs from web design tools, photo manipulation and vector creation, through to ...
offers
Flex for free, while selling the
Flash Builder
Adobe Flash Builder (previously known as Adobe Flex Builder) is an integrated development environment (IDE) built on the Eclipse platform that speeds development of rich Internet applications (RIAs) and cross-platform desktop applications, partic ...
IDE.
*
Apple Inc.
Apple Inc. is an American multinational corporation and technology company headquartered in Cupertino, California, in Silicon Valley. It is best known for its consumer electronics, software, and services. Founded in 1976 as Apple Comput ...
offers
Darwin for free, while selling
Mac OS X
macOS, previously OS X and originally Mac OS X, is a Unix, Unix-based operating system developed and marketed by Apple Inc., Apple since 2001. It is the current operating system for Apple's Mac (computer), Mac computers. With ...
.
*
Asterisk
The asterisk ( ), from Late Latin , from Ancient Greek , , "little star", is a Typography, typographical symbol. It is so called because it resembles a conventional image of a star (heraldry), heraldic star.
Computer scientists and Mathematici ...
,
digital electronics
Digital electronics is a field of electronics involving the study of digital signals and the engineering of devices that use or produce them. It deals with the relationship between Binary number, binary inputs and outputs by passing electrical s ...
hardware controlled by open-source software
*
Codeweavers sells
CrossOver commercially, deriving it from the free
Wine
Wine is an alcoholic drink made from Fermentation in winemaking, fermented fruit. Yeast in winemaking, Yeast consumes the sugar in the fruit and converts it to ethanol and carbon dioxide, releasing heat in the process. Wine is most often made f ...
project they also back.
*
Canonical Ltd. offers
Ubuntu
Ubuntu ( ) is a Linux distribution based on Debian and composed primarily of free and open-source software. Developed by the British company Canonical (company), Canonical and a community of contributors under a Meritocracy, meritocratic gover ...
for free, while they sell commercial technical support contracts.
*
Cloudera
Cloudera, Inc. is an American data lake software company.
History
Cloudera, Inc. was formed on June 27, 2008 in Burlingame, California by Christophe Bisciglia, Amr Awadallah, Jeff Hammerbacher, and chief executive Mike Olson. Prior to Cloude ...
's
Apache Hadoop
Apache Hadoop () is a collection of open-source software utilities for reliable, scalable, distributed computing. It provides a software framework for distributed storage and processing of big data using the MapReduce programming model. Hadoop wa ...
-based software.
* Francisco Burzi offers
PHP-Nuke for free, but the latest version is offered commercially.
*
IBM proprietary Linux software, where IBM delivers
database software
In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and analy ...
,
middleware
Middleware is a type of computer software program that provides services to software applications beyond those available from the operating system. It can be described as "software glue".
Middleware makes it easier for software developers to imple ...
and other software.
*
Ingres
Jean-Auguste-Dominique Ingres ( ; ; 29 August 1780 – 14 January 1867) was a French Neoclassicism, Neoclassical Painting, painter. Ingres was profoundly influenced by past artistic traditions and aspired to become the guardian of academic ...
is offered for free, but services and support are offered as a subscription. The Ingres Icebreaker Appliance is also offered as a commercial database appliance.
*
id Software
id Software LLC () is an American video game developer based in Richardson, Texas. It was founded on February 1, 1991, by four members of the computer company Softdisk: game programmer, programmers John Carmack and John Romero, game designer T ...
releases their legacy
game engine
A game engine is a software framework primarily designed for the development of video games which generally includes relevant libraries and support programs such as a level editor. The "engine" terminology is akin to the term " software engine" u ...
s under the GPL, while retaining proprietary ownership on their latest incarnation.
*
Mozilla Foundation
The Mozilla Foundation is an American non-profit organization that exists to support and collectively lead the Open-source software, open source Mozilla project. Founded in July 2003, the organization sets the policies that govern development, ...
have a partnership with
Google
Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
and other companies which provides revenue for inclusion of search engines in
Mozilla Firefox
Mozilla Firefox, or simply Firefox, is a free and open-source web browser developed by the Mozilla Foundation and its subsidiary, the Mozilla Corporation. It uses the Gecko rendering engine to display web pages, which implements curren ...
.
*
MySQL
MySQL () is an Open-source software, open-source relational database management system (RDBMS). Its name is a combination of "My", the name of co-founder Michael Widenius's daughter My, and "SQL", the acronym for Structured Query Language. A rel ...
is offered for free, but with the enterprise version includes support and additional features.
*
SUSE offers
openSUSE
openSUSE () is a free and open-source software, free and open-source Linux distribution developed by the openSUSE project. It is offered in two main variations: ''Tumbleweed'', an upstream rolling release distribution, and ''Leap'', a stable r ...
for free through the
openSUSE Project, while selling
SUSE Linux Enterprise (SLE).
*
OpenSearchServer
OpenSearchServer is an open-source software, open-source application server allowing development of index-based applications such as search engines. Available since April 2009 on SourceForge for download, OpenSearchServer was developed under the ...
offers its community edition on SourceForge and an enterprise edition with professional services to enterprises with a paid license
*
Oracle
An oracle is a person or thing considered to provide insight, wise counsel or prophetic predictions, most notably including precognition of the future, inspired by deities. If done through occultic means, it is a form of divination.
Descript ...
-
VirtualBox
Oracle VirtualBox (formerly Sun VirtualBox, Sun xVM VirtualBox and InnoTek VirtualBox) is a hosted hypervisor for x86 virtualization developed by Oracle Corporation. VirtualBox was originally created by InnoTek Systemberatung GmbH, which was ac ...
is free and open to anyone, but the
VirtualBox extension pack can only be used for free at home, thus requiring payment from business users
*
OWASP Foundation is a professional community of open-source developers focused on raising visibility for software security.
*
Red Hat
Red Hat, Inc. (formerly Red Hat Software, Inc.) is an American software company that provides open source software products to enterprises and is a subsidiary of IBM. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North ...
sells support subscriptions for
Red Hat Enterprise Linux
Red Hat Enterprise Linux (RHEL) is a commercial Linux distribution developed by Red Hat. Red Hat Enterprise Linux is released in server versions for x86-64, Power ISA, ARM64, and IBM Z and a desktop version for x86-64. Fedora Linux and ...
(RHEL) which is an enterprise distribution periodically forked from the community-developed
Fedora
A fedora () is a hat with a soft brim and indented crown.Kilgour, Ruth Edwards (1958). ''A Pageant of Hats Ancient and Modern''. R. M. McBride Company. It is typically creased lengthwise down the crown and "pinched" near the front on both sides ...
.
*
Sourcefire
Sourcefire, Inc was a technology company that developed network security hardware and software. The company's Firepower network security appliances were based on Snort, an open-source intrusion detection system (IDS). Sourcefire was acquired ...
offers
Snort for free, while selling Sourcefire 3D.
*
Sun Microsystems
Sun Microsystems, Inc., often known as Sun for short, was an American technology company that existed from 1982 to 2010 which developed and sold computers, computer components, software, and information technology services. Sun contributed sig ...
(
acquired by Oracle in 2010) once offered
OpenOffice.org
OpenOffice.org (OOo), commonly known as OpenOffice, is a discontinued open-source office suite. Active successor projects include LibreOffice (the most actively developed) and Collabora Online, with Apache OpenOffice being considered mostly d ...
for free, while selling
StarOffice
StarOffice is a discontinued proprietary software, proprietary office suite. Its source code continues today in derived open-source office suites Collabora Online and LibreOffice. StarOffice supported the OpenOffice.org XML file format, as well ...
* Untangle provides its Lite Package for free, while selling its Standard and Premium Packages by subscription
*
Zend Technologies
Zend, formerly Zend Technologies, is a Minneapolis, Minnesota-based software company. The company's products, which include Zend Studio, assist software developers with developing, deploying, and managing PHP-based web applications.
The company w ...
offers
Zend Server CE and
Laminas for free, but sells
Zend Server
{{Infobox software
, title = Zend Server
, name = Zend Server
, logo =
, logo caption = Zend Server
, screenshot =
, caption =
, collapsible =
, author = Zend Technologies
, developer = Perforce
, released = 2009
, discontinued =
, ...
with support and additional features.
See also
*
Commercial use of copyleft works
*
Free software business model
*
Open Source Development Labs
*
Open business
Open business is an approach to enterprise that draws on ideas from openness movements like free software, open source, open content and open tools and standards. The approach places value on transparency, stakeholder inclusion, and accountabili ...
*
Open innovation
Open innovation is a term used to promote an Information Age mindset toward innovation that runs counter to the secrecy and silo mentality of traditional corporate research labs. The benefits and driving forces behind increased openness have b ...
*
Software monetization
References
Further reading
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{{Oracle FOSS
Business models
Economics of intellectual property
Free and open-source software
Free software culture and documents
Software industry
pl:Otwarte oprogramowanie#Modele biznesowe dla otwartego oprogramowania