How do Open Source Companies and Programmers make money?

Open Source software is nothing new to many. It is free computer software that is made available along with its code. The person or organization that created the open source software makes it available under license to use, modify and/or to distribute the software. Many big companies, including Oracle and Google, too support open source software. It can be taken for granted that people create open source software because they love coding. But do Open Source developers make money? If so, how do Open Source Programmers and companies  make money?  The objective of this post is to identify and list the methods by which such software companies and developers can make money.

How do Open Source Companies make money

How do Open Source Companies make money

Open Source companies sometimes create software and do not make public, all of the code. In other words, part of the software is open source, while the some parts are private. If anyone wants to use such software, he or she needs to pay to the company some money to be able to use the software with full functionality.

Open source companies like Oracle etc. also make money by providing online or onsite training and support to their open source programs. For example, Apache’s Hadoop is free to use, but is too complex for anyone to start using it right away. In such cases, the open source companies provide for-profit assistance with installation and training of employees of the company that hires them. In Hadoop’s case, though third party personnel might be useful, preference would be given to the personnel associated with Apache as they have been developing the source code as they know better it than the third party trainers or support providers.

Some open source companies – mostly the ones that develop software for mobile devices – display in-software advertisements to make money. These advertisements are displayed on top or bottom of the screen and generally, are not intrusive. But they do occupy the valuable screen space. On the contrary, since they are free, users do not have much objection to the adverts.

How do Open Source Programmers make money

Companies Pay Open Source Programmers

You might find it hard to believe this, but there are companies that pay the programmers who create open source software. For example, Red Hat, IBM, Novell, Linux Foundation and other distributors of Linux operating system pay the programmers working on Linux so that the work of upgrading and patching the software continues. Though Linux comes at free cost to the end users, it costs a little to the distributors of the operating system. But then, the costs are much less than what they would have to pay when distributing Windows or Apple operating system.

If any loophole is discovered in such software, say Linux, there will be companies willing to pay programmers who can fix the problem. These are the companies that use Linux for making profit in one way or the other. A simple example could be hardware developers who sell Linux installed computers. Among other examples could be companies that develop software based on Linux.

Similarly, for other open source products too, there are people out there who pay for proper build and maintenance of the software.

Earning By Creating Special Plugins, Etc.

Some companies who are using any kind of Open Source Software may hire the programmers involved in the project to create special plugins and extras. Since they have already worked on creating the open source software, they have knowledge of the code and they need not work from the scratch. Hiring such programmers to create addons, plugins and extras for the software, is much less expensive than hiring a professional from outside.

Though the companies may have their own programming wing, it is time saving to hire of the programmers involved in creation of the open source software rather than having their own employees to study the code and then ask them to create addons.

Earning by Customization of Code

Same as in the above case, but in this case, companies using open source software, hire the developers to tweak the code a little to suit the company needs. Again, this is favorable for companies asking for modification as they are engaging professionals who have already worked on the code rather than asking their own programmers to study and modify the code. This saves time though a little overhead is added by way of payment to such programmers.

Since open source means quick operations, if a company picks up a free to use, open source software to integrate into its existing project and a little work is needed, it is always feasible to hire a professional who already worked on the code if time is a factor, as it always is.

Earning By Providing Support

Not all open source software is easy to install and use. Companies who implement a version of such software might engage one of the open source programmers to train their staff and to provide support in case of problems.

Some people deliberately create sort of open source software that passes off as free and open but has much part hidden. Need of installation and training becomes necessary in this case. Though such software is not an Open Source Software ethically, it still sells.

One needs to be pretty active in the field of open source to get an offer from the companies wanting modification or extra features. As far as I know, people working on a group project, often include their name and email IDs in the comments of the source code, so that others studying the code can contact them for any reason and if an email ID appears many times, as that person is probably the best one to work on tweaking, modifying, creating extras or performing similar actions on the code.

I guess the major percentage of money in open source software sector comes from support and customization of the open source code. tweaking. If I missed anything, please comment.

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Arun Kumar is a Microsoft MVP alumnus, obsessed with technology, especially the Internet. He deals with the multimedia content needs of training and corporate houses. Follow him on Twitter @PowercutIN