The Business of Open Source: How Companies Make Money from Free Software

Understanding Open Source Economics

Open source doesn’t mean free to develop. Companies need sustainable business models to support their open source work.

Model 1: Dual Licensing

Offer a free open source version and a paid enterprise version with extra features. MongoDB and Redis have used this model successfully.

Model 2: SaaS Offering

Provide a hosted, managed version of your open source project. This is how companies like Elastic, Confluent, and GitLab monetize.

Model 3: Support and Consulting

Offer paid support, consulting, and training. Red Hat is the classic example here.