HOW OPEN SOURCE SOFTWARE GENERATES REVENUE:Open Source software’s are freecomputer software, which are accessible with their codes. The individual ororganization that makes the open source software makes it accessible under thelicense to use, modify and to distribute the software. To generate revenue thecompanies 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 functionsare private and to utilize the full functionality of the software, the user hasto pay to get the full software version.
Following are the three ways OpenSource 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 SourceSoftware sometimes hire programmers who design the open source software andthey also create special plugins, extras and add-ons which are paid and theusers pay money to avail them.Earning Customization of Code:The customization of codes provideusers or the companies favorable modifications as per their need, the opensource software are for quick operations and free to use so it becomes hard tointegrate with the existing project so the company usually hires the programmerwho have worked on its code and they are paid for the changes.Earning by Providing Support:Open Source Software are not alwayseasy to install and use, and sometimes the companies or individualsdeliberately design Open Source software for free and keep some of the parthidden which require assistance, so in this case training and installationbecomes necessary and the individual or company earns money by provision ofsupport or assistance.To conclude the major percentage ofrevenue 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 generateprofits 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· Freemium Model· Software as a Service (SaaS) Model 1. Support andService Model:This model has the software which is totally open source andthey are freely accessible to all clients and customers, but the services, forexample: Installation, Consulting, Support (fundamental/ priority) and thetraining are only accessible at a fee. The consultation normally covers the implementationand management of the software within particular industries. Red Hat is one of the best example inwhich this model is effectively utilized. 2.
DualLicensing Model:Dual Licensing offers software under Open Source but alsopermit separate propriety license terms, the premium features are not includedin the basic version of the software and they upsell the additional commercialenterprise edition that have annual subscription and each subscription has itsown additional features which aren’t present in the open source basic versionbut they are important for enterprise. The Oracle’sMySQL database is an example of duallicensed. 3. The OpenCore Model:This model is quite familiar with Support and Service Modelin this model the core software is Open Source and continues to progress.However, the special features and software enhancement modules which willimprove the core software are only available for a fee like in commercialsoftware.
Talend uses this model andsell its value added features for its core software. 4. FreemiumModel:In this model the software is distributed freely and contentis 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 securityproducts under this model. 5. Software asa Service (SaaS) Model:This model describes your software provided as a centrallyfacilitated service that is available only via paid subscription. Thesesubscriptions are normally client, transaction volume or time based. The Sugar CRM commercial follows the SaaSModel and they recently started offering on-site deployments as how to utilizeyour resources effectively.