Monday, February 15, 2010

Open source as business strategy

Many companies are using open source as their business strategy. This is not just giving software away free, but knowing where your outcome is. The best example is dual licensing which is very often done for supporting free software business models. With dual licensing company can sell porprietary software license which allows creating proprietary applications and in the same time can provide also free license with copyleft free or open source license with the requirement the derived work has to be released under the same license. Good example is MySQL Community Edition is available under the GNU license, but there is also MySQL Enterprise which is commercial version and with more possibilities and extra services.

One idea of open source strategy is to go to market with new piece of software by giving this away for free and win customers more easily and grow more easily. By giving this away for free they create unique dependance among their users and with the time users don't even notice that they need this software. Good example is PHP framework Symphony which has fastly growing network of developers creating new plugins and functions for this framework. They also offer Doctrine as ORM for their framework, which is also very fastly growing free ORM. They earn money selling the how to books and trainings, they also have donate, which most of the free software communities use.

My Favourite is Magento open source eCommerce platform, which is using dual licensing way. Magentos community edition is using OSL 3.0 license and Magento enterprise edition is commercially licensed. The latter is more comprehensive and has more possibilities than free edition. There are also widely offered extensions, some of them are free and some commercial.

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