If OSS is not a business model, what is it?

You’ve heard it: Open source is not a business model. So what does that mean?

First of all, I think this is one of the primary confusions in conversations about open source companies. Open source companies can be SaaS companies, can be enterprise, on-prem software companies and can be services business. Or, in many cases, all of the above. They can also be none of the above, because there are loads of innovative monetization models around open source companies.

So what is open source, then? It can be:

  • A distribution model

  • A development model

  • A transparency play

  • A self-imposed constraint because that is the kind of company you want to build

In other words, when someone says that they are building / running an open source company, the extent of what you know about that company is that there is an open source project out there that is critically important to the company’s survival.

You don’t know why that project is important to the company’s survival or what business value it provides (or if it provides any at all — we all know there are OSS companies out there that would honestly probably be better off keeping their code proprietary).

In other words… I don’t think OSS is necessarily any kind of model. Open source companies are really diverse. I am constantly surprised by them.

PS I’ve been not so great about keeping this blog updated recently, because I’ve been working like crazy on Open Source Founders Summit. If you’re in leadership at an open source company, check it out!

Emily Omier