Revenue Models in the Open Source Software Business

Abstract

Profit-oriented business behavior has increased within the open source software movement. However, it has proved to be a challenging and complex issue due to the fact that open source software (OSS) business models are based on software that typically is freely distributed oraccessed by any interested party, usually free of charge. It should be noted, however, that like all traditional software businesses, the business models based on OSS ultimately aim at generating profits. The aim of this chapter is to explore the key considerations in designing profitable revenue models for businesses based on OSS. We approach the issue through two business cases: Red Hat and MySQL, both of which illustrate the complexity and heterogeneity of solutions and options in the field of OSS. We focus on the managerial implications derived from the cases, discussing how different business model elements should be managed when doing business with OSS.