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How to make money from open source software

Paul Rubens | Sept. 3, 2015
Ditching the GPL may be the key to running a successful commercial open source software business.

It’s hard to compete with free

The extent to which the software can be monetized – how much revenue can be generated from it – depends on what the software achieves and what alternatives solutions are available, he believes. But here's the thing: the traditional GPL approach means that potential customers for open source software can choose to download a "community" version of the software and use it for free, or pay a subscription for what's essentially the same underlying software – albeit with the promise of some quality, security and sometimes feature enhancements, plus support.

Since the subscription-based product is forced to compete with a free alternative from which it is derived, that reduces the potential revenue that the subscription product can generate. (Levine's made this point by saying that many companies are unwilling to pay the "Red Hat tax" when they can get Fedora for nothing.)

But in ForgeRock's case this doesn't apply as there is no "community" version of its software: if you want to use the company's identity management solution you have pay for a license. Then you can access the source code, and modify it if you want.

In fact that's not quite true, because each annual major release is available free, along with the source code which anyone can compile and run. But this release isn't maintained by any community (in part because the software is too specialized to attract one) so it would be rash to put the code into production.

There's a potential problem with ForgeRock's approach: One of the perceived strengths of the traditional free and open source software development model (not the open source business model) is that by granting everyone access to the source code, anyone can contribute to the project, improve it or spot bugs, anyone can modify the software to meet their needs, and everyone can benefit from any modifications.

But that's not what is happening with ForgeRock's products. Only paying customers (of which there are about 500 around the world) have access to the source code for the minor and maintenance releases, and as a result, only a small amount of the code – perhaps 10 percent – originates from contributors outside the company.

So although ForgeRock may have a sustainable business model, there's a question mark around whether this is really still open source software that captures the benefits of the free open source development model.

Raskin maintains that it does offer most of them: transparency into what the software actually does, the insurance of having the source code should ForgeRock suddenly cease to exist, the ability to troubleshoot collaboratively with the vendor, plus the ability to customize the software from the underlying source code.


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