Can OSS Be Commercially Viable?
It is commonly assumed that OSS and monetisation do not readily go hand in hand. After all, OSS is commonly referred to as “free software”. However, it is a slight misconception that “free” means “free of charge” in this context. It actually refers to the freedom of open source users to inspect, derive work, redistribute and run any OSS.
In any case, many people believe the ethos of OSS is that it should remain free of charge for all. Although some companies have tried to monetise their OSS by putting it behind a paywall, the general consensus seems to be that monetising it in this way is against the spirit of what open source stands for.
Instead of this, in order not to compromise the original OSS spirit, some companies are designing paid-for solutions that help users by providing a service that makes accessing OSS easier – therefore helping the freedoms of the open source users.
There are four main ways of monetising OSS without going against its core ethos:
1. Pay for Convenience
In theory anyone can download and use OSS, but there are often practical barriers which prevent people from doing this. Installing and running it can sometimes be quite cumbersome for those who lack the requisite skills.
For example, companies can offer a product which lowers the entry barrier to OSS by making the software significantly easier to use. Examples of this include Raspberry Starter Kits, which enable users to start programming in Scratch and Python, and SD cards with the NOOBS system pre-installed.
These products immediately create a revenue stream, by targeting entry-level users who are either too busy or do not have the requisite skills to install and start using the software by themselves.
2. Pay for Support
While the idea of OSS has always been that of a community which provides support for developers and users alike, as this community consists of volunteers, there is no set deadline by which any query must be answered. This is in contrast to any commercial software, whose helpdesk is obliged to respond to tickets within a strict time frame if any problems arise.
Clearly, a commercial organisation relying on OSS for the smooth running of the company cannot always afford to wait until someone gets around to answering their query. Sensing an opportunity, companies are now offering a solution to this problem with an answering service, which will resolve queries within a fixed time frame.
One such service is Red Hat, who provide support to large organisations using OSS. The value of this model is clear, and it seems that IBM agreed, paying $34 billion to acquire Red Hat in 2019.
3. Pay for OSS Management
Thirty years ago, anyone with reasonable knowledge of how an engine worked could have a go at servicing their own car. Nowadays, performing anything except a very basic bit of maintenance yourself is nigh-on impossible. Similarly, as technology evolves, OSS is becoming more and more difficult and complex to operate and maintain, often requiring people with highly specialised knowledge.
Finding people with the requisite skills is extremely time-consuming, and employing them full-time is expensive. Much more viable is using an external company with OSS skills and knowledge to manage a project from behind the scenes. One example of this is the British energy provider Ovo Energy. Lacking the resources to manage the data collection from their smart meters themselves, they outsourced this work, leaving them able to focus on developing their own applications, safe in the knowledge that the infrastructure underpinning them would be secure.
4. Open-Core
In a similar way to the widespread “freemium” model in online gaming, where the game is free to download but contains a myriad of in-app purchases, Open-Core OSS projects offer the basic software for free, but with various upgrades or additional features available on a paid basis.
Of the above-mentioned ways of monetising OSS, Open-Core is by far the least popular among the purists, who believe this form of open source somewhat defeats the purpose of OSS as it does not contribute innovation back into the software. Although the Open-Core model keeps the user’s freedoms intact, it stifles the collaborative nature of OSS, as a large percentage of the innovation happens behind closed doors.
Preserving the spirit of OSS
If a balance can be struck when monetising OSS between commercial viability and retaining its integrity, then it is important that a project should remain accessible to all users. By providing services which do this while improving the quality of the projects, it is possible to monetise OSS, while keeping that all-important alignment with its core ethos and ideals.
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