in Open Source, Technology

Where does Open Source Software get its Payment from?

It always seems like a question that could have multiple answers. And it is actually true that the question of ‘Who really pays for Open Source Software?’ does not comprise of just one answer, in that there is not just one source of revenue for Open Source. It really is a tough task to track the fund flow for Open Source Software, especially when it is available at zero cost and when it cannot be sold.

Despite the fact that there exists a battle between makers of that of proprietary software and open source software, there have been instances wherein certain proprietary firms have borrowed help from open source software for their benefit like the way Microsoft used Open Source to manage its .Net. This is the kind of effect that the Open Source Software currently has in the market and it is difficult to absorb the fact that it comes at zero cost and leaves us wondering where does open source get its funds from?

One of the sources known to everyone is the fee charged to companies for support and assistance. Several open source software projects charge business consumers for any kind of technical support. During the initial periods of its launch, open-source supply agents like MySQL and JBoss though made quite a lot of money through the support-only business model; they still could not see consistent growth in this kind of business and hence had to diversify. In verity, a very small contingent of corporate consumers ends up paying for support and the statistics state that a handful of 3 percent users purchase support subscriptions. An extension of this statistic suggests that 65% of developers earn about $100 or even less per annum by working on open source projects. This justifies that developers aren’t getting wealthier by lending open source software support.

Another surprising source of income for open source is Donations. The word donation denotes charitable funding and it is pretty astounding that it is one of the major income paths for open source. A certain amount of donation in the form of ‘optional fee’ is generally paid for the open source software acquisition by companies. NetBSD is one such instance of a project that has successfully raised funds via donations. Again it must be noted that the amount raised is not significantly high.

Proprietary software firms such as IBM and Oracle often fund or sponsor open source projects and hence give rise to another revenue source called Investor Sponsorship. You must wonder what is in it for the proprietary software makers. Those who subsidize open source development are given free access to such projects and hence are benefitted of availing free research along with faster, less expensive development of new solutions, features, and ideas.

Besides these, there is another stream through which open source earns money which is supposedly a secret source and the irony here is that these biggest contributors are often not aware they are paying for it. A recent Evans Data report suggests several business firms unknowingly shell out money and support open source projects. As per the report “67 percent of developers (respondents) spend some time developing open source software while at their primary job”. This personifies that part of the salary paid by firms to its developers is apparently owed to work not related to their job.

Several proprietary software firms exist just to develop software that is customary to and as requested by business clients, but it is quite pleasing to notice a counterpart such as open source exists in the same industry that is devoted to developing several software projects with little or no monetary expectation. The truth is many such open source projects are the outcome of pure labors of love funded by emotion, not currency. However, the anticipation of a bright forecast for the open source market and the existence of contributors (as mentioned above) seems enough to keep the open source development ongoing.

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