HOW OPEN SOURCE SOFTWARE GENERATES REVENUE:
Open Source software’s are free
computer software, which are accessible with their codes. The individual or
organization that makes the open source software makes it accessible under the
license to use, modify and to distribute the software. To generate revenue the
companies sometimes design the software and do not make them fully public, i.e.
all of the codes. The Open Source software comes free of cost but some functions
are private and to utilize the full functionality of the software, the user has
to pay to get the full software version.
Following are the three ways Open
Source Software generates profit from:
Earning by Creating Special Plugins
Earning by Customization of Code
Earning by Providing Support
Earning by Creating Special Plugins:
The companies of Open Source
Software sometimes hire programmers who design the open source software and
they also create special plugins, extras and add-ons which are paid and the
users pay money to avail them.
Earning Customization of Code:
The customization of codes provide
users or the companies favorable modifications as per their need, the open
source software are for quick operations and free to use so it becomes hard to
integrate with the existing project so the company usually hires the programmer
who have worked on its code and they are paid for the changes.
Earning by Providing Support:
Open Source Software are not always
easy to install and use, and sometimes the companies or individuals
deliberately design Open Source software for free and keep some of the part
hidden which require assistance, so in this case training and installation
becomes necessary and the individual or company earns money by provision of
support or assistance.
To conclude the major percentage of
revenue in open source comes from Support and Customization of source code.
OPEN SOURCE BUSINESS MODEL:
It is the strategy that is used by a company to generate
profits and revenue from their Open Source Software.
Following are the Business Model in Open Source Software:
Support and Service Model
Dual Licensing Model
The Open Core Model
Software as a Service (SaaS) Model
This model has the software which is totally open source and
they are freely accessible to all clients and customers, but the services, for
example: Installation, Consulting, Support (fundamental/ priority) and the
training are only accessible at a fee. The consultation normally covers the implementation
and management of the software within particular industries. Red Hat is one of the best example in
which this model is effectively utilized.
Dual Licensing offers software under Open Source but also
permit separate propriety license terms, the premium features are not included
in the basic version of the software and they upsell the additional commercial
enterprise edition that have annual subscription and each subscription has its
own additional features which aren’t present in the open source basic version
but they are important for enterprise. The Oracle’s
MySQL database is an example of dual
This model is quite familiar with Support and Service Model
in this model the core software is Open Source and continues to progress.
However, the special features and software enhancement modules which will
improve the core software are only available for a fee like in commercial
software. Talend uses this model and
sell its value added features for its core software.
In this model the software is distributed freely and content
is sold which means that selling the other supporting appliances i.e. Hardware,
and the giving the open source software as complimentary product. The Mazu Networks offers their security
products under this model.
a Service (SaaS) Model:
This model describes your software provided as a centrally
facilitated service that is available only via paid subscription. These
subscriptions are normally client, transaction volume or time based. The Sugar CRM commercial follows the SaaS
Model and they recently started offering on-site deployments as how to utilize
your resources effectively.