Brian Gentile, Jaspersoft’s CEO, recently published a post stating his opinion that the Open Core Business Model is the “Best Opportunity for Community and Commercial Success.”

The concept of Open Core was created by Andrew Lampitt—then Director of Business Development & Strategic Alliances for Jaspersoft—in an attempt to more precisely define the concepts offered by Marten Mickos at a conference in 2007 where he stated “Open Source models are hybrid” (page 16). Andrew focused particularly on #6 (“some enterprise features are for a fee”).

Andrew proposed the following definition of the Open Core 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).
• Professional services and training are for a fee.

This was derived from the Dual Licensing Model, but with some modifications, because Andrew believed that “some dual license strategies have gotten a bad rap, perhaps because of the confusion they cause or the approaches vendors take. I propose to rename this #6 dual license strategy as ‘open-core licensing,’ to remove confusion and promote a great business model for open source communities, paying customers, and vendors alike.”

In the heated debate which followed the invention of the term—where some purists considered this model as similar to proprietary software—Brian recalls that “Most major software categories where open source has positively disrupted have required successful commercial open source companies to eventually use a model similar to open core, in order to continue growing. Think JBoss, Linux (Red Hat Enterprise Linux, Novell/openSUSE), SugarCRM, Hyperic, Talend and, of course, Jaspersoft.”

I totally agree with Brian—pure open source models (Eclipse, Mozilla, etc.) will continue to offer new products and to enhance final user experience. I don’t see why we would challenge this approach, but I also don’t see why we wouldn’t have a right to adopt quite a different one. Brian wrote: “To truly disrupt software categories where proprietary vendors dominate (and to deliver large new leaps in customer value), the open core model currently stands alone in its opportunity to deliver community progress and commercial success” because it offers the best hybrid approach between a 100% free model and a 100% paying model, simultaneously assuring the profitable growth of the vendor and the success of the clients. It is, of course, the model we adopted when we launched our company. And the support of our investors proves its validity.

Bertrand