The new form of Open Core, or how everyone was right

Right on the heels of the 451 group’s CAOS 12 report, I had the opportunity to perform a comparison between monetization modalities that we originally classified as open core in the first edition of our work with the more recent database of OSS companies and their adopted models (such an analysis can be found in our guide as well). An interesting observation was the shifting perspective on what open core actually is, and to present some examples on why I believe that the “original” open core nearly disappeared, while a “new” model was behind the more recent claims that this has become one of the preferred models for OSS companies.

In the beginning, we used as a classification criteria the distinction of code bases: an Open Core company was identified by the fact that the commercial product had a different source code base (usually an extension of a totally OS one), and the license to obtain the commercial was exclusive (so as to distinguish this from the “dual licensing” model). In the past, open core was more or less a re-enactment of shareware of old; that is, the open source edition was barely functional, and usable only to perform some testing or evaluation, but not for using in production. The “new” open core is more a combination of services and some marginal extension, that are usually targeted for integration with proprietary components or to simplify deployment and management. In this sense, the “real” part of open core (that is, the exclusive code) is becoming less and less important – three years ago we estimated that from a functional point of view the “old” open core model separated functions at approximately 70% (the OS edition had from 60% to 70% of the functions of the proprietary product), while now this split is around 90% or even higher, but is complemented with assurance services like support, documentation, knowledge bases, the certification of code and so on.

Just to show some examples: DimDimWe have synchronized this release to match the latest hosted version and released the complete source code tree. Bear in mind that features which require the Dimdim meeting portal (scheduling & recording to note) are not available in open source. There is also no limit to the number of attendees and meetings that can be supported using the Open Source Community Edition.” If you compare the editions, it is possible to see that the difference lies (apart from the scheduling and recording) in support and the availability of professional services (like custom integration with external authentication sources).

Alfresco: The difference in source code lies in the clustering and high-availability support and the JMX management extensions (all of which may be replicated with some effort by using pure OSS tools). Those differences are clearly relevant for the largest and most complex installations; from the point of view of services, the editions are differentiated through availability of support, certification (both of binary releases and of external stacks, like database and app server), bug fixing, documentation, availability of upgrades and training options.

Cynapse (an extremely interesting group collaboration system): The code difference lies in LDAP integration and clustering; the service difference lies in support, availability of certified binaries, knowledgebase access and official documentation.

OpenClinica (a platform for the creation of Electronic Data Capture systems used in pharmaceutical trials and in data acquisition in health care); from the web site: “OpenClinica Enterprise is fully supported version of the OpenClinica platform with a tailored set of Research Critical Services such as installation, training, validation, upgrades, help desk support, customization, systems integration, and more.”

During the compilation of the second FLOSSMETRICS database I found that the majority of “open core” models were actually moving from the original definition to an hybrid monetization model, that brings together several separate models (particularly the “platform provider”, “product specialist” and the proper “open core” one) to better address the needs of customers. The fact that the actual percentage of code that is not available under an OSS license is shrinking is in my view a positive fact: because it allows for the real OSS project to stand on its own (and eventually be reused by others) and because it shows that the proprietary code part is less and less important in an ecosystem where services are the real key to add value to a customer.

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  1. #1 by Apurva Roy Choudhury - December 26th, 2009 at 08:44

    A very interesting analysis, I agree with you that the open business model is rapidly changing. IMO, the earlier models were influenced by fears of the entire IP of the business being open and publically available for others to replicate. Lately, a few companies, (Including us, Cynapse) have the belief that as long as there is constant innovation at high speeds, coupled with a strong focus on fulfilling business needs with services around the technology, the fears of loosing out to competition using your open technology to compete with you, is quite pointless.

    A little correction to your post, we do not have any code difference between our free and commercial editions. The differences lie only in configuration, the appliance stack, update services (of the product and the stack) and support. We took this approach as we realized, that though the partial open source model (the one that you rightly compare with shareware) is great for marketing, but the true value of open source is only derived when the community believes the product is really open and creates a strong partner / developer / evangelist ecosystem around the product, the likes of which proprietary software companies can only dream of.

  2. #2 by cdaffara - December 26th, 2009 at 11:07

    Many thanks for your comment (and my personal thanks for your work on Cynapse, a quite interesting package). I apologize for the part on code difference; I obtained that from the website, but I probably did not investigate enough. The main point of the post is the fact that nowadays “pure” open core solutions, based on differentiated code bases, are in my opinion not very interesting for adopters, as it is unclear the difference between these “new shareware” editions and proprietary software. My point was that services will be in the future much more important as differentiating elements, and in this sense your comment clearly points in the same direction. Many thanks,
    Carlo Daffara

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