IDG Contributor Network: Open core products: Are they worth the trade-off?


Open source projects, companies and business models have been with us for more than two decades now. There are business success stories around Linux, Hadoop, PostgreSQL, Apache Camel, and others that deliver fully open source products.

While the build environments and parameters may or may not be available to build the same certified binaries, the source code is available for users to pick up and use on their own if they so choose.

Enterprise IT may go on their own either for initial deployments if total-cost-of-ownership analysis is not favorable for the product subscription or to migrate to in the case if dissatisfied with vendor quality and/or service. This is the so-called “.org challenge” to open source companies to deliver enough ongoing value to counter the self-support urge of customers and potential customers.

Open core: A value delivery and monetization strategy

One approach to add value to open source is to deliver software products using an open core model. According to Wikipedia, “Open core is a business model for the monetization of commercially produced open source software. Coined by Andrew Lampitt in 2008, the open core model primarily involves offering a ‘core’ or feature-limited version of a software product as free and open-source software, while offering ‘commercial’ versions or add-ons as proprietary software.”