There is a concept of an Open-Core License (OCL) model for building a business on open source that is growing in popularity among open source companies. This has been discussed for a while now and I’m a big fan of the concept. In fact, I MindTouch is employing this model and I recently spoke at OSBC on this topic. OCL strikes me as a very natural way to create balance between the needs of the company and those of the community of open source users. Other alternative models include dual-license model or even cripple-ware, a model in which the open source core is disabled or diminished in some way to get users to upgrade to a paid commercial version (think performance, number of CPU, users, etc…).
I think the best description of OCL is by Andrew Lampitt of JasperSoft, who I think coined the term (not sure). Rather than me explain his thinking I’ll quote:
So I propose the following for the OCL business model:
- core is GPL: if you embed the GPL in closed source, you pay a fee
- technical support of GPL product may be offered for a fee (up for debate as to whether it must be offered)
- annual commercial subscription includes: indemnity, technical support, and additional features and/or platform support. (Additional commercial features having viewable or closed source, becoming GPL after timebomb period are both up for debate).
I completely agree. In fact, Matt Wilkie, a MindTouch open source user brought up exactly this in a recent blog post comment. Here’s how I see it:
What it says above is, today’s low value adds become’s tomorrow’s commodity capabilities that get rolled into the free and open core meanwhile new value adds are added. Absolutely the right approach in mind except I would modify one thing in the above graphic (provided by Mike Diliberto – a MindToucher) and that is where it says in the cloud thingy it says “New features from user requests, community projects” should read: “New features from customer and user requests”.
Thanks for the question Matt and thanks for the mostly correct graphic Mike!