How to Make Money with Open Source Software

One way or another, everyone needs to eat — and that includes all of you open source people too. Fortunately, there are as many ways to make money in the world of open source as there are people who try it. Here's a run down of the top models.

Support Contracts and Licenses

There are many different ways to approach making a living, or at least covering your costs, with open source. Still, there are some common business models that you'll see throughout the open source marketplace.

Often the pay offerings are focused on the enterprise and other large institutions.

For example, many corporations have policies stating that they can't use software for their infrastructure unless they have paid support — in case something goes terribly wrong. Since in the open source world, anyone can offer paid support for a particular project, the key is differentiation. You have to make sure that your offering stands out in a crowd.

One way of standing out is to offer support for your own project. If you're the lead developer (or at least a core developer), people know that you know the software inside and out, making you an excellent choice to diagnose their problems.

Customers also know that if you're part of the core team you can advocate for their particular needs when it comes to project priorities.

There are plenty of individual developers or small teams making a living through paid support, often as an afterthought after a project becomes popular and clients come knocking. In some cases, however, companies are formed to back open source projects with services like this in mind from the beginning.

Bill Robinson, VP of the Americas for Alfresco Software (news, site) says being a commercial company behind an open source project, "gives us the ability to deliver enterprise standard service level agreements — a must for companies and organizations deploying enterprise content management solutions."

Commercial "Enterprise" Upgrades

There's occasionally controversy about offering a free version of an open source project to the masses and a fancier version for those willing to pay for it.

At times this controversy comes from the fact that the free versions offered by some open source vendors have so few features, or are so poorly supported, that they're nearly useless. In these situations more cynical voices will assert that vendor following this approach are simply using open source as an inexpensive marketing ploy. At other times the arguments revolve more around philosophical issues.

Commercial upgrades can come in a number of different forms:

Paid Add-On Modules

For example, there's the idea of purchasing specific add-on modules for specific tasks. Many open source projects such as Joomla! (news, site), Drupal (news, site) and Plone (news, site) have huge ecosystems where small companies evolved to deliver and support single pay modules, while others grew into more sophisticated shops offering multiple modules, support and other value-added services.

Different Subscription Editions

One example of a company that offers different levels of products is DotNetNuke (news, site). According to Shaun Walker, Chief Architect and Co-Founder of DotNetNuke Corp, the open source DotNetNuke project was founded in 2002, and the company was founded later in 2006.

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One way or another, everyone needs to eat -- and that includes all of you open source people too. Fortunately, there are as many ways to make money in the world of open source as there are people who try it. Here's a run down of the top models.