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Open Core – Open Source Friend or Foe?

Jessica Thornsby
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Open Core is currently the hot topic in the blogosphere. We take a look at where Open Core comes from, and the arguments for and against it as a business model.

Open Core is currently causing quite a stir in the blogosphere as of late, with countless individuals voicing their opinion for, or against, Open Core as a business model.

Open Core’s roots can be traced back to 2008, when Andrew Lampitt coined the term to describe a dual licensing model. Lampitt described his vision of the Open Core / dual license, as the vendor owning the intellectual property of a product, and choosing to license it under both a commercial license and an open source license. This means releasing the ‘core’ product as open source – he suggests the GPL license – whilst offering proprietary add-ons and additional support, as required.

At the time, he acknowledged that Open Core is a potentially controversial business model, as segmenting based on features and not based on user base is unpopular amongst certain areas of the open source community. Lampitt admitted that “this model did not work for some vendors in the past due to ‘angering the community” and theorised that this anger arises from a fear of commercial companies exploiting the term ‘open source’ for their own financial gain. He argued that renaming the dual license to Open Core, would effectively take some of the sting out of a co-commercially and -open source licensed product.

What are the arguments for Open Core? According to Lampitt, Open Core users often receive most of the benefits of a traditionally-licensed open source product: they can use it for free, sometimes permanently; have the added security of being able to modify the product to suit their own needs, and the option to continue developing the product even if the vendor decides to stop working on it.

“My feeling is that we would save a lot of confusion for communities, customers, and vendors if all recognize that a dual license ”open core” model is a sensible business model for all involved,” he concluded, back in 2008.

However, Open Core has since met some opposition, with OSI board member Simon Phipps referring to it as “a game on software freedom” and claiming it exploits loopholes in open source. Open Core has led him to call for a re-defining of the software freedom “game.” Although Phipps has no issue with the core open source package this dual license delivers, he claims that to use the product in a commercial setting, one would eventually have to purchase the proprietary add-ons. This ties you into the vendor, and you forfeit the aforementioned benefits of open source: you are suddenly part of a community of co-users, not co-alternative-developers; and you have to abide to the vendor’s decisions regarding how their product develops. By offering the initial product as open source, Open Core is, in Phipps’ opinion, using “a bait-and-switch”to lure the user into vendor lock-ins.

Brian Aker has also expressed his opinion against Open Core, asking his blog visitors to consider how many open source products have launched successful companies, before stating “there has been no successful launch of an open core company that has reached any significant size……Open Core is a dead on arrival business model. We should realize this and just move on.”

Meanwhile, Giuseppe Maxia has expressed a more pragmatic approach, suggesting that the 100% open source business model does not work for everyone.

“Before saying “you should do like RedHat“, ask yourself if your project meets the same conditions that have made RedHat an open source commercial success. And by same conditions I mean not only the target users, but also the environment, the skilled engineers, the community, and probably the vision that put the company in the right place at the right moment,” he advises.

Maybe keeping your users happy whilst prospering financially, are ultimately more important than keeping your business model “pure” and 100% open source.

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