You may have heard about the Open Source concept. It is on your phone, your computer, and it even runs the website where you’re reading this article. Thousands of companies realized that they could make money and at the same time make their software available for free, so now they have placed open source softwares at the center of their businesses.
But how do they make money from something being offered for free?
They could do well by doing good.
First of all, everyone must be motivated to contribute for a reason, they must turn their selfishness into something that everyone benefits from. All the contributors become equal. Sharing the code allows everyone to concentrate on the quality of the software, not on the licensing issues.
In fact, they make money with free software in exactly the same way as with proprietary software: by building a great product, marketing it withskills and imagination, looking for customers, thereby building a brand synonymous with quality and service.
They have to offer to their customers solutions that others cannot or will not offer. At this level, free software (open source) is not a drawback, but an advantage. The open source development model leads to a stable, flexible, and a highly adaptable software to specific needs.
Thus, open source companies have a product whose quality could fulfil the customer’s needs and expectations, and they only have to find an efficient way to earn money while leaving the benefits of such programs to the customer.
Here are some ways companies use open source to profitable ends:
- Open-sourcing code to reduce support costs
Due to a well-documented open source software, customers can answer their own questions without waiting for a support technician. With an open source community, everyone can benefit from the access to the open source.
- Open-source to reduce development costs
Does your company need a new tool, a customized feature or an application? Developing it in-house would cost a lot, but choosing an open source version could reduce your development expenses.
- Open-source to develop shared standards
Every business and marketplace needs a set of standards so that customers know what to expect and businesses know what to build. Open source can often help create these standards of interoperability.
- Open source as low-cost marketing
Releasing the product as an open source package can attract users who will be curious to test the product and discover what it does. The product speaks for itself and brings in the users, then the sales force steps in when it’s time to upsell.
- Open-source to control the future
“The best way to predict the future is to invent it.”
Why do some companies pay their employees to work on open source projects and then donate the codes that they spent a lot of money to create? Because they want to make sure they could influence the way the code base is developped, and the easiest way to do this is to contribute lines of code.