Open Source Business Model

Posted on Thursday, June 28, 2007 by Anuj Mehta

Open Source….is it feasible??

There are some misconceptions about Open Source products that they are not stable, not user friendly, its very scary etc.
Also Open Source Products are considered as freeware which are developed by amateurs and it’s free of cost.

Well in reality Open Source is one of the most innovative and profitable business models in current era (i.e. web 2.0)
• More than half of the websites will be powered off if there were no freeware products as majority of them run on Apache Web Server.
• Email won’t work as majority of them use a freeware sendmail program.

If I consider Open Source as a Business Model then following points is in its support

Robustness: Freeware products are more robust as it is peer reviewed. Bugs in this case are found out more easily as compared to proprietary software where a product is tested by comparatively small number of testers and a large number of bugs are not detected. There is a famous quote "If builders built houses the way programmers built programs, the first woodpecker to come along would destroy civilization."

Fast and Flexible: Open source product development is more fast as there are a large number of people from all over the world contributing to it.

Profitable: It’s a profitable business even though the code is given for free. Companies charge for services they provide like system integration. There is a huge cut down in R & D cost as the community members provide free research. Examples for such companies are MySQL, Redhat.

Wide customer base: Due to internet people from all over the world can contribute to it. For any product which you develop main focus is always on “What customer wants?”…Now if the developers of customer are also members of the community then the product will better suit to the requirements of that customer.

Breaking monopoly: Now if the product that is developed at a much lower cost is more robust then no doubt it will help in breaking monopoly.

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