Making Money from Open Source Software

When you think of open source software, you don't generally think of companies making money from it. True, there are some pretty big players such as Red Hat that distribute and support versions of Linux to corporations. But they used to be few and far between.

A while back in an issue of CIO Magazine, there was a great article about how companies are making money from open source. One of the sidebars to the article describes the 5 most common business models.

Open Source + Service

Companies sell support and services around open source software. JBoss and Red Hat fall in to this category. This can be good for companies since they will need only pay for support and not the actual software. It also makes it easy for companies to switch providers since the source code is available to everyone.

Mixed

An open source code base with proprietary add-ons. Advantages include being able to become familiar with the open source product and then, only if needed, is there a cost with acquiring the add-ons.

Open Source + Buy Off

Companies offer a proprietary license for their open source software and redistribute it without having to make the code changes available to the public. MySQL, a very popular database, is a good example of this model.

Open Source + Aggregation

Companies assemble various open source software packages into integrated units that are easier for CIOs to consume. Having someone else do the legwork simplifies integration and support.

Open Source + Hardware

Hardware makers use open source as the foundation for the software that runs their machines. Cisco is a big player in this arena. The key advantage here is less expensive equipment.