The Trend Of Open Source And Proprietary Software Business Model

The Trend Of Open Source And Proprietary Software Business Model

Open source software has been there for a long time. Its popularity is increasing each and every day and has reached such a level that it’s hard to find a domain which does not have an open source presence. Companies are reluctant to buy proprietary software due to the cost involved. In most cases, open source software seems to be a viable option.

People often fail to realize that open source is not completely free. It has its own business model to generate revenue in order for the provider to remain financially viable. Some open source software providers gain revenue by offering two versions of their software. One of the versions is free but comes with limited functionalities. The other version is fee-based and has many additional features. Once the user gets accustomed with the free version, they can opt for the fee-based version. Open source software also gets revenue by providing service.

Companies providing proprietary software generate revenue by selling products. They gain profit not only by selling the software licenses, but also from providing additional services and support. Although this has been the trend of generating profits from proprietary software, the companies are looking for varying means to maintain market share in a highly-competitive environment.

Proprietary software is constantly losing ground due to intense competition from open source software. Like open source software, proprietary software is now offering a free version of their products to the customers. Companies selling proprietary software, like SQL Server, provide free versions of their software in the form of ‘express editions.’ The express edition does not have any services or support attached to it. It comes with a limit of 2GB of data that can be stored. It can be used by small companies to start with it and is replaced with the proprietary version as they grow. This model is the same as the open source model where free versions are provided while support and services come with a fee. Once the customer gets used to the free version, there is a potential that they will buy the fee-based version which has many additional functionalities.

The current trend shows rising popularity of open source which compels proprietary software to re-think their sales-based revenue model. The use of express edition and earning from support is a sign of this. The proprietary software will have to continuously come up with innovative ideas to maintain its grip on the market.

By Jake Rosenblum

Follow Us!

CloudTweaks

Established in 2009, CloudTweaks.com is recognized as one of the leading authorities in cloud computing information. Most of the excellent CloudTweaks articles are provided by our own paid writers, with a small percentage provided by guest authors from around the globe, including CEOs, CIOs, Technology bloggers and Cloud enthusiasts. Our goal is to continue to build a growing community offering the best in-depth articles, interviews, event listings, whitepapers, infographics and much more...
Follow Us!
FacebookTwitterLinkedInGoogle+Share

Sorry, comments are closed for this post.

Join Our Newsletter

Receive updates each week on news, tips, events, comics and much more...

Popular

Top Viral Impact

Cloud Computing Offers Key Benefits For Small, Medium Businesses

Cloud Computing Offers Key Benefits For Small, Medium Businesses

A growing number of small and medium businesses in the United States rely on as a means of deploying mission-critical software products. Prior to the advent of cloud-based products — software solutions delivered over the Internet – companies were often forced to invest in servers and other products to run software and store data. The

Cloud Infographic – Monetizing Internet Of Things

Cloud Infographic – Monetizing Internet Of Things

Cloud Infographic – Monetizing Internet Of Things There are many interesting ways in which companies are looking to connect devices to the cloud. From the vehicles to kitchen appliances the internet of things is already a $1.9 trillion dollar market based on research estimates from IDC. Included is a fascinating infographic provided by AriaSystems which shows us some

Cloud Infographic – Cloud Fast Facts

Cloud Infographic – Cloud Fast Facts

Cloud Infographic – Cloud Fast Facts It’s no secret that Cloud Computing is more than just a buzz term as that ship has sailed off a long time ago. More and more companies are adopting the uses and benefits of cloud computing while aggressively factoring cloud services spending into their budget. Included is an excellent

Can I Contribute To CloudTweaks?

Yes, much of our focus in 2015 will be on working with other influencers in a collaborative manner. If you're a technology influencer looking to collaborate long term with CloudTweaks – a globally recognized leader in cloud computing information – drop us an email with “tech influencer” in the subject line.

Please review the guidelines before applying.

Whitepapers

Top Research Assets

HP OpenStack® Technology Breaking the Enterprise Barrier

HP OpenStack® Technology Breaking the Enterprise Barrier

Explore how cloud computing is a solution to the problems facing data centers today and highlights the cutting-edge technology (including OpenStack cloud computing) that HP is bringing to the current stage. If you are a CTO, data center administrator, systems architect, or an IT professional looking for an enterprise-grade, hybrid delivery cloud computing solution that’s open,

Public Cloud Flexibility, Private Cloud Security

Public Cloud Flexibility, Private Cloud Security

Public Cloud Flexibility, Private Cloud Security Cloud applications are a priority for every business – the technology is flexible, easy-to-use, and offers compelling economic benefits to the enterprise. The challenge is that cloud applications increase the potential for corporate data to leak, raising compliance and security concerns for IT. A primary security concern facing organizations moving

Hewlett-Packard Company On-Demand Webinar

Hewlett-Packard Company On-Demand Webinar

Shifting Workloads and the Server Evolution Learn more about the latest industry trends and the challenges customers are talking about. Every ten to fifteen years, the types of workloads servers host swiftly shift. This happened with the first single-mission mainframes and today, as disruptive technologies appear in the form of big data, cloud, mobility and