{"id":21798,"date":"2014-08-04T15:01:59","date_gmt":"2014-08-04T07:01:59","guid":{"rendered":"https:\/\/www.hongkiat.com\/blog\/?p=21798"},"modified":"2021-12-08T19:32:05","modified_gmt":"2021-12-08T11:32:05","slug":"open-source-doesnt-mean-free","status":"publish","type":"post","link":"https:\/\/www.hongkiat.com\/blog\/open-source-doesnt-mean-free\/","title":{"rendered":"How Open Source Companies Stay Profitable"},"content":{"rendered":"

While it\u2019s true that there are many open source solutions<\/a> that both companies and individuals can acquire and use at no cost, the notion that the phrase \"open source\" equates with the word \"free\" is simply not true.<\/strong><\/p>\n

Open source projects are generally developed within communities of enthusiastic programmers who often voluntarily contribute their time<\/strong>. Still, common sense belies the fact that there would be open source companies, like Red Hat<\/a>, capable of generating more than $1 billion of revenue by offering free products. So while there are many open source solutions that can be legally obtained and utilized without opening your wallet, there are also a slew of them that cost money.<\/p>\n

Businesses also make money off open source products in a variety of other non-traditional ways which we\u2019ll explore later in the article. But before doing that, let\u2019s take a look at why the confusion surrounding the costs associated with open source software exists<\/strong> in the first place.<\/p>\n

It\u2019s not \"Free\", It\u2019s \"Free<\/em>\"<\/h2>\n

According to the Open Source Initiative, \"free software\" and \"open-source software\" are interchangeable phrases<\/a>. It\u2019s just that the word \"free,\" in this case, doesn\u2019t mean \"without cost.\" Instead, it has to do with being liberated from the traditional walls of proprietary solutions<\/strong>, as programmers are able to use open-source code as a foundation upon which to build.<\/p>\n

That\u2019s one of the primary allures of open source technology: rather than having to invest countless hours into building code from the ground up, programmers are able to collaborate and build it together<\/strong>, or at the very least, use someone else\u2019s code as a starting point for their project that will then also be released back into the open-source community.<\/p>\n

In these kinds of environments, code is reviewed and edited regularly<\/strong> so as to ensure its best iteration.<\/p>\n

How Open Source Companies Make Money<\/h2>\n

There are certainly a wealth of examples<\/a> of open source solutions that are free. However, we live in a world where money matters, so open source wouldn\u2019t be nearly as popular if there was no money to be made in it. The fact of the matter remains that in order to continue existing, companies need to be profitable.<\/p>\n

Let\u2019s take a look at five ways open-source companies do make money:<\/p>\n

1. Investments<\/h2>\n

There are many wealthy individuals out there, especially in the tech space. Call it philanthropy, call it a way of trying to buy influence, call it what you will \u2013 some open-source companies survive on serious investments.<\/strong><\/p>\n

2. Dual-licensing<\/h2>\n

You know how Angry Birds offers a free, trial version and also a version that costs money? This happens in the world of open-source too. Oftentimes, open-source companies will dual-license their software, offering free versions as well as enterprise editions.<\/p>\n

The hope is that customers will try out the free version and like it so much that they upgrade to the enterprise edition to gain extra functionalities. An example of this can be found in Data Geekery<\/a>, a Zurich-based company that recently moved dually-licensed its jOOQ database abstraction software<\/a> so as to generate some revenue to provide support to its existing customers.<\/p>\n

\n\t\t\t\t\tWhat is a Free Business Model (And How to Make it Work)<\/span><\/a>\n
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