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LPI OSS Essentials study materials
LPI OSS Essentials study resources

LPI OSS Essentials: Open Source Business Models

LPI OSS Essentials · Work through your exam, one topic at a time.

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Open Source Business Models

Open Source Business Models tests how an organization funds development while keeping code under an open license - and which license choices support which revenue stream.

Recurring models

  • Support and subscription - software is free; customers pay for SLAs, certified builds, updates, and indemnity (Red Hat's model).
  • Open core - an open core plus proprietary enterprise features.
  • Dual licensing - the same code under GPL and a paid commercial license. Viable only if the vendor owns the copyright or holds a CLA granting relicensing rights from every contributor.
  • Hosted service / SaaS - charge for operation rather than code (WordPress.com beside WordPress.org; managed databases).
  • Services and enablement - consulting, integration, training, certification.
  • Community funding - donations, sponsorship, foundation membership, bounties.
  • Provenance/managed cloud - a cloud provider monetizes the software without paying its authors; this pressure pushes projects toward AGPL or non-open licenses.

License as strategy

Permissive licenses maximize adoption and embedding; copyleft preserves leverage for dual licensing; AGPL closes the hosted-service loophole. Relicensing away from a copyleft license without contributor consent is legally impossible - and when it happens anyway, forks follow: OpenTofu from Terraform, Valkey from Redis, OpenSearch from Elasticsearch.

Worked example

A startup owns all its code, holds signed IP assignments from every employee, and depends only on MIT and Apache-2.0 libraries. It releases the server under AGPLv3 with a commercial alternative. Reasoning: AGPL forces a competitor that modifies and hosts the code to publish its changes, making the paid license attractive; but the AGPL code cannot be combined with GPLv2-only dependencies, and some enterprises ban AGPL outright, narrowing the sales pipeline.

Traps

  • Claiming open source cannot be sold - it can; the license only forbids extra restrictions on redistribution.
  • Marketing a source-available license (SSPL, BSL) as open source.
  • Assuming the GPL requires a CLA; it does not - a CLA is a business decision.
  • Planning a relicense without checking who owns contributor copyright.