Welcome to the Open Source Revolution
Posted on May 27, 2008 - Filed Under Business |
I currently work for an open source company and one of the questions that I get all the time is, “If your company is open source then why do you charge for your product.”
I don’t mind answering questions like this, because the open source business model is actually quite amazing. I think that it really offers the best of all worlds to every level of software users.
First of all, to clarify a few misconceptions, open source is not by definition free. While it is often free at some level, open source really means that when software is delivered to the end users it is accompanied by the actual source code of the software. This allows the user to customize and alter the source code however they wish to.
GNU General Public licensing
There are several types of licenses that dictate how open source works. The most widely known type of license that is used by open source companies is the GNU General Public License. The GNU GPL has the following stipulations.
- The software is free and open to the public.
- In order for the software to remain free, users must submit any improvements they make to the software back to the general public.
This is what people typically think of when they think of open source. This type of software license is amazing for anyone who wants high quality software at a great price, and who is willing to contribute to the open source community.
The main benefit of open source is that development of software is based on the needs of the user community, not necessarily based on what the makers of the software choose to put in. Its like a reverse funnel of development that makes it possible for software to be custom fitted to the needs of the collective body of users.
Enterprise Licensing
The main problem with the GPL licensing model is that Enterprise Users typically cannot take advantage of this solution for several different reasons.
First, Stability. Because of the nature of open source, it tends to end up being a potpourri of development. Depending on who worked on the solution that was submitted to the community, it could be very user friendly and stable, or it can crash your system. While most open source software is good, large businesses often cannot afford the risk of using a community product across a larger scaled enterprise deployment.
Second, support. Because the community usually acts as its own support, and developers are often hobbyists without a 1-800 number to call, support and implementation consulting are not typically offered in conjunction with products licensed under the GNU GPL.
Third, Competitive advantage. While a software hobbyist may not have a problem submitting their improvements on the software back to the community, enterprise users’ improvements and customizations often represent specific competitive advantages that they cannot afford to release back into the community. It would be foolish for a company to spend thousands to develop a custom solution only to release back into the community for its competitors to have for free.
For these reasons, many open source companies also offer an Enterprise License that offers support on the product, Tested and Stabilized Source code that is scalable for a large, enterprise scale deployment, and the ability to keep their custom solutions proprietary.
For example, at my company they will take the community version and stabilize the code and benchmark it to make sure that is the software is stable and scalable, following that we will sell it as the enterprise code, which we then package with support and various options for consulting and development help.
Enterprise licenses allow large companies the ability to combine the best of proprietary and open source software to help them better run their business.
Enterprise licenses are great because they allow companies to have software that is on par with anything produced by the larger, proprietary software companies at a fraction of the cost. On top of that, they receive the ability to customize and develop on top of the source code however they see fit.
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