Open Source licenses and business models


License for Open business:
Licensing is one of the most important component of the open source model. There are several licenses but all of them share some common principles, free distribution, scope for modification, etc.

No license:
In this license, the creator of the open source software will not charge anything for distribution but has the copyright to the original code. The copyright is waived. This is a no-holds barred form of usage, users are free to do whatever they want with software that is released in this manner. This is as the base for proprietary software.

BSD License:
BSD stands for Berkeley Software Distribution and this type of software is mostly used for the operating systems, e.g. Open BSD, Apache web server. This was originally designed to release software which is the result of academic research. It gives importance to contributors and proper mentioning of credit. Commercial proprietary products can be released under this license.

GNU GPL:
GNU GPL stands for GNU General Public License. This license is created by the legendary Richard Stallman, also known as father of Free Software Foundation. It leaves no scope for commercial exploitation of code. Thus, the General Public License and its variants deter developers from modifying code and not redistributing it back into the community. Developers have to redistribute it with the same license as it was before modifying.

Mozilla Public license:
This license is quite suited to commercial purpose as the it allows for combining the original code with proprietary code and then releasing a larger work that can be commercially licensed. Such proprietary code need not to be made publicly available. The proprietary code must be distinctly separated from the original MPL code. It must interact with the original code through predefined  APIs. While at the same time all modification to the original code covered under MPL must be made publicly available.

Business models

Once you start developing with the open source, it allows for deep market penetration. Customer will pay at the point when they start earning. The most suitable example is Facebook. Facebook started with Apache and Mysql. When server patches and security issues become unmanageable, Facebook brought subscription for MySQl and paid them. When people develop open source applications and allow other to use them, they become part of the business logic, when they start making money then the developer will start making money. The business process is that when the customer is able to make money, then the developer will start making money.

Support Selling
In this model company distributes the software for free but charges for media distribution, training, support and customization. This business model is followed by most open source companies. Red Hat and Novell follow this business model.

Accessories
In this business model, simply sell the products associated with the product such as books, training, manuals and compatible hardware. Products branding  accessories like T-shirts, coffee mugs, etc are also sold.

Dual Licensing
In this type of model software, vendors offer same product under different license. One is open source license and other is proprietary license. Products released under open source license are for non commercial use. Some examples are Firefox, MySql and OpenOffice. Open source version popularize the commercial one.