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

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

Maintaining Network Performance And Security In Hybrid Cloud Environments

Maintaining Network Performance And Security In Hybrid Cloud Environments

Hybrid Cloud Environments After several years of steady cloud adoption in the enterprise, an interesting trend has emerged: More companies are retaining their existing, on-premise IT infrastructures while also embracing the latest cloud technologies. In fact, IDC predicts markets for such hybrid cloud environments will grow from the over $25 billion global market we saw…

Digital Twin And The End Of The Dreaded Product Recall

Digital Twin And The End Of The Dreaded Product Recall

The Digital Twin  How smart factories and connected assets in the emerging Industrial IoT era along with the automation of machine learning and advancement of artificial intelligence can dramatically change the manufacturing process and put an end to the dreaded product recalls in the future. In recent news, Samsung Electronics Co. has initiated a global…

How Formal Verification Can Thwart Change-Induced Network Outages and Breaches

How Formal Verification Can Thwart Change-Induced Network Outages and Breaches

How Formal Verification Can Thwart  Breaches Formal verification is not a new concept. In a nutshell, the process uses sophisticated math to prove or disprove whether a system achieves its desired functional specifications. It is employed by organizations that build products that absolutely cannot fail. One of the reasons NASA rovers are still roaming Mars…

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

The Cloud Is Not Enough! Why Businesses Need Hybrid Solutions

Why Businesses Need Hybrid Solutions Running a cloud server is no longer the novel trend it once was. Now, the cloud is a necessary data tier that allows employees to access vital company data and maintain productivity from anywhere in the world. But it isn’t a perfect system — security and performance issues can quickly…

Protecting Devices From Data Breach: Identity of Things (IDoT)

Protecting Devices From Data Breach: Identity of Things (IDoT)

How to Identify and Authenticate in the Expanding IoT Ecosystem It is a necessity to protect IoT devices and their associated data. As the IoT ecosystem continues to expand, the need to create an identity to newly-connected things is becoming increasingly crucial. These ‘things’ can include anything from basic sensors and gateways to industrial controls…

Achieving Network Security In The IoT

Achieving Network Security In The IoT

Security In The IoT The network security market is experiencing a pressing and transformative change, especially around access control and orchestration. Although it has been mature for decades, the network security market had to transform rapidly with the advent of the BYOD trend and emergence of the cloud, which swept enterprises a few years ago.…

How To Overcome Data Insecurity In The Cloud

How To Overcome Data Insecurity In The Cloud

Data Insecurity In The Cloud Today’s escalating attacks, vulnerabilities, breaches, and losses have cut deeply across organizations and captured the attention of, regulators, investors and most importantly customers. In many cases such incidents have completely eroded customer trust in a company, its services and its employees. The challenge of ensuring data security is far more…

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And Virtual Reality This is a term I created (Virtual Immersion). Ah…the sweet smell of Virtual Immersion Success! Virtual Immersion© (VI) an extension/expansion of Virtual Reality to include the senses beyond visual and auditory. Years ago there was a television commercial for a bathing product called Calgon. The tagline of the commercial was Calgon…

The Cancer Moonshot: Collaboration Is Key

The Cancer Moonshot: Collaboration Is Key

Cancer Moonshot In his final State of the Union address in January 2016, President Obama announced a new American “moonshot” effort: finding a cure for cancer. The term “moonshot” comes from one of America’s greatest achievements, the moon landing. If the scientific community can achieve that kind of feat, then surely it can rally around…