Open Source Business: Model or Tactic?

ReadWriteWeb points readers to a report released by the 451 Group stating that open source is not a true business model, but more of a "business tactic."

Traditionally, the "open source business model" is perceived as "free/open software, with paid support and configuration services." The report found, however, that many of the responding open source businesses incorporate some commercially licensed software in their product line. It also found that the "paid support/free software" idea -- while theoretically, at least, valid -- is multi-layered, complex, and highly variable between software product, software company, and industry.

The research included 114 open source vendors, including Red Hat, Alfresco, IBM and Oracle. Of all the vendors studied, 70% offered support services, but less than 8% called their support services their primary revenue stream. The 451 Group stated that they realized the inclusion of "proprietary vendors" (as opposed to the broader definition of "vendor," which could include those making open code available on a mirror) would possibly skew the results, so the research centered mainly on businesses specializing in open source.

It's not surprising that these vendors, which vary in size and customer base, use different methods to keep themselves afloat. It's not terribly surprising that licensing weighs heavily on how development, support, and revenue-generation strategies are formulated.

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