6 years ago

Understanding the Open Source models for a Commercial era

Understanding the Open Source models for a Commercial era

The Open Source movement has gained enough momentum to outpace proprietary business by both scale and penetration. In today’s widening IT culture, Openness plays a great role in collaborating a wider community in the design and development of software. Introduced during the late 90’s and early 2000s the FOSS (Free and Open Source) movement has gone through a range of definitions that were adjusted for business and cultural opportunities.  For who are thinking of making their code Open Source and for those wondering whether to work with an Open Source company, a distinction has to be made between a multitude of definitions and variations of the industry that could clarify the path to take.

Open Source
The basic distinction is made by whether the Open Source company holds the copyright of the code or not.

Companies who do not own the copyright to their code:

A software code being Open Source does not imply freedom from copyright. Various developers who have contributed to the collective effort may reserve their copyrights. Open Software companies may collaborate with other Open Source developers and act as a distributor. In such scenarios the distributor company doesn’t hold copyrights over the written code.


  • Services Model – With the software provided for the customers, the company can sell maintenance, support, documentation, and training, as well as the version certification of the software. Customers pay for the services maintained by the company.
  • Software as a Service (SaaS) – In SaaS model, customers receive the software on-demand. The software itself and data are hosted on cloud storage.
  • Proprietary plugin/application model – A company may sell commercial extensions, add-ons, modules, and applications with the Open Source software as one.

Companies who own the copyright to their code:

Bringing your hard work into the hands of others may seem like a give away of tactics. But for some, bringing their talent out to the open and showcasing it, is a personal payoff. Why a company wants to Open Source their code is a separate ideology. There are numerous advantages and opportunities to be had, that could result in a booming expansion and publicity.


  • All models applicable for the above type of companies applies here. A copyright holder company may provide their customers with the software and provide a service model. They may also host themselves on cloud to provide on-demand software. They may upgrade their own software with add-ons and resell.
  • Dual licensing – A company may release their code under a standard commercial license as well as an Open Source License. This may occur with compatibility of the two or multiple licenses or with the freedom to choose which to use. The software may have a free version at less cost (or zero cost) whereas the commercial version comes with a standard licensing fee.
  • Freemium Model – A company may also release their software under an Open Source license and additional premium features at a price.   Usually the features are blocked in the standard version and are unlocked in the premium.


Thanks http://opentec.org
Image courtesy of Marc Wathieu


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