While I was researching sources for a previous post, I found in in a 451 Group blog post a reference to a presentation delivered by Marten Mickos at OSBC last year in which he exposed his point of view on Open Source Business Models.

Marten identified 13 Business Models, but he indicates most open source players leverage hybrid models:

“Software is free, but:
1. …we need donations and subsidies to survive (Apache Software Foundation, Eclipse, ObjectWeb)
2. …we sell ads and placements (Mozilla)
3. …if you embed it in closed source, you pay a fee (Trolltech, DB4Objects, Funambol, MySQL, etc.)
4. …services are for a fee (Covalent, Ubuntu /Canonical)
5. …on-going maintenance, monitoring and provision of binaries is for a fee (Red Hat, JBoss, MySQL)
6. …some enterprise features are for a fee (SugarCRM, Zimbra, JasperSoft)
7. …we built a closed-source product around it (EnterpriseDB, GreenPlum)
8. …hardware is for a fee (Sun, Asterisk/Digium)
9. …we sell everything else on the planet, including closed source software (IBM)
10. …that’s not our real business (Ruby on Rails, individual contributors, etc.)
11. …we regret it (Borland with Interbase)
12. …we don’t want to see it any more (any good examples?)
13. …we want to drive web traffic (Yahoo YUI)”

As far as I can tell, these 13 categories cover all the alternatives and monetization modes that exist on the market. Look at Talend, for example: our business model is a hybrid of #4 (services around Talend Open Studio), #6 (subscription features of Talend Integration Suite and Talend On Demand) and #3 (OEMs). This combination provides revenue that pays for R&D and for the improvement of our solutions for all users – including of course the ones who do not pay.

A last comment: as Marten himself said, and given the variety of approaches, open source is not really a business model, but is “clearly the best production method for software”.

Bertrand