Open-source software companies represent growing businesses with specific business models (Deshpande & Riehle, 2006, Popp, 2019). Here, we look at different business models for companies, that base their business model completely or in part on open-source software or open-source licenses. We analyze different building blocks of such business models and reuse an existing business model framework to categorize these building blocks.
1.1 Open-Source Licenses as a Key Factor for the Variety of Business Models
An open-source license comes with rights and obligations and the search for the optimal license continues (Lerner & Tirole, 2005, Jaeger et al., 2005). A license creates limitations as well as opportunities in creating business models around open-source software.
For example, for a company using open-source software as part of its products, the limitations can be described as follows.
Example
A software vendor may make use of the rights, like usage or redistribution of the open-source software, but it also has to fulfill the obligations, like e.g. delivering the copy of the license text with the software or revealing the source code of a software product.
Another restriction is that some licenses do not allow modifications of the open-source software. This would exclude the ability of a commercial open-source company to provide maintenance and to fix security vulnerabilities, because the open-source code must not be changed.
But the limitations of open-source licenses can also be an advantage for software vendors providing open-source software, which will be shown later in this chapter, when we talk about dual licensing models.
The key point for a commercial company is if it is willing and able to comply with the license terms of a specific open-source component. The rights and obligations in conjunction with the open-source software have to be analyzed diligently to make sure there is no violation of the license terms and the license terms are not in conflict with the commercial company´s business model (Onetti & Verma, 2009, Krishnamurthy, 2005). If this is ensured, the company can leverage this piece of open-source software.