Open source is a powerful idea. Open-source software or projects are free and their source code is public, still it doesn’t compromise with quality, so the obvious question is how Open-source finds their funding for survival.
After knowing that opensource is free many people wonder how exactly they make money. This information can be important for both technical or financial viewpoint.
Source of income
There are lot ways in which Open Source can make money but here we’ll talk about from where they generate 90% of their revenue.
Through Royalties and Donations
The most common ways free software makes money is through donations from their users and also from royalties, for example, the Unreal engine which takes 5% royalty also by selling asserts and skins, which also contribute to their income. Lot of opensource project are often funded by big companies for example The Tor Project is funded by google.
For customizing opensource software
Some open source projects rely on feature requests to fund their development. In simple words, they are paid by their clients to include a particular feature. This business model generally works for games in which players pay developers to include some features or some modification on their game.
Non-profit and big Tech Ecosystem
Many open source projects are backed by a non-profit organisation like the Linux Foundation. They offer membership packages that come with some privileges like discount coupons. In the case of a popular 3d modelling software Blender, it makes money from 3d asserts, and in the case of Mozilla Firefox, it gets paid by Google for keeping it as there default search engine and also by the amazon for keeping it on there quick access list.
The android is open source and helps Google to build an Eco system as Google added a lot of its features like the Google app, play store, etc. to promote its products. The motive is to lure customers to their services for examples users paying for apps on the Play Store get 30% of the purchase made.
Opensource also makes money by selling their products or merchandise for example companies like Fossasia sells its lab dev boards and led badges and other companies sells their t-shirts, stickers, decorative, etc. In the 80s and 90s, when the open source was not so popular, the companies used to make money by selling reusable CDs or hard drives with there software on it.
Why do people contribute to opensource?
There are many reasons to contribute to open-source. The most rational reason can be contributing to open source helps improve their hiring ability. As volunteering to contribute on opensource is not always a paid job, anyone can contribute to opensource and later write it on their resume. As open source companies don’t have to pay people for contributing, it enables them to recruit volunteers without any barrier, which makes it easy for people to contribute and gain experience. If you build something useful or solve a problem, some cooperatives companies may buy your project to generate lead from their competitors.
Also many people contribute to opensource to test their skills and to make there resume stand apart from other. As you don’t usually get paid for contributing, this shows how passionate you’re for a particular job/work.
The main motive of the open-source company is to build a reputable company among cooperatives. After that, after that making money is not a big deal. Also, open-source can be very helpful for students to learn from.