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Oct 2008
Open Source Is Not a Business Model
How do vendors make money from free and open source software (FOSS)? The question is as old as FOSS itself, but over time it has shifted from a theoretical question — “How is it possible to generate revenue from something that is free?” — to a practical question — “What products and services do open source vendors provide that customers are prepared to pay for?”
As the open source development and distribution model has been adopted, either partially or fully, by both startups and established software vendors, some of the assumptions about open source software have taken a back seat to commercial reality. For example, the idea of a community of individuals sharing the development of software projects for the greater good has been superseded by the image of a community of vendor employees sharing the development of software projects to increase code quality and lower production costs.
Similarly, the idea that the only way of generating revenue from open source software is through specialist vendors that make the majority of their money providing support services has also become outdated. There are now a wide variety of methods used by vendors to generate revenue from open source software.
This report assesses the development, licensing and revenue-generation strategies used by vendors that market products and services based on open source code. The report is also designed to assess the impact that open source license choice, development model, vendor licensing strategy, revenue triggers and sales models have on each other in determining the overall business model used by businesses selling products and services based on open source software.
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