BLOG: 9 Ideas to commercialize open source software
By Daniel Williams. Posted 21 March, 2016
Back in 2013 I decided that developing a web-based FTP client in PHP would be a fun thing to do. I also decided that the world could benefit from my creative exploits and hard work and I released it as open source software.

I'll assume that because you're reading this post, you don't need an explanation of what open source means; but in a nutshell, it's software that is free to use and modify by anyone. Examples include the Linux operating system, the Android operating system and the Netscape browser (whose source code provided the basis for Mozilla Firefox.)

Now that my software has been out in the big wide world for nearly 3 years I've seen tens of thousands of downloads and thousands of installs, including at some enormous multi-nationals. Very satisfying stuff.

But... there comes a time when an open source developer gets caught in a catch 22. On the one hand, open source software is more accessible and can therefore reach a larger audience. And on the other hand, I need to eat.

The premise behind open source is that projects gain enough interest from the community that a team of developers collectively commit enough hours to keep the project alive and improving. But what if you want to actually build a revenue-generating business around your free software? Things become a bit harder, but it is indeed possible.

After all, Red Hat, Inc. built its business around open source distribution and they have revenues of $1.5 billion (2014.)

So let's dive in and look at nine different ideas developers can use to commercialize their open source software (of course, these ideas are not the exclusive domain of the founding developers. You could make some of these work for other people's open source software.)
1. Delayed releases
By offering an annual subscription you can give paying customers first access to your latest releases. This ensures you can continue to offer all features at no cost (as opposed to restricting certain features to paying customers.) Ideally your non-paying users will be so eager to get their hands on all the updated features they'll bypass your 3-month wait and sign up for your low yearly fee.
2. Enterprise edition
If you offer single user access as the default you can introduce multi-user support for an annual (permissions, privileges, logging etc.) It's perfectly reasonable to expect businesses to support you financially, and user management gives them a layer of control that you can charge for.
3. Software maintenance
You can provide a service (again for an annual fee) where you update their servers with the latest releases, which gives them similar benefits as SaaS offerings, where they simply never need worry about having the most up-to-date version of the software.
4. Paid installs
Some users may need help getting set up the first time around and this can be daunting if they have to do it themselves (they might even get stuck and abandon the software altogether.) What has worked for me is to offer a "no fix, no fee" refund guarantee. Whether I'm just doing a straight install, or fixing some problem they've encountered early on, they know there'll be no risk if things don't work out.

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5. Ad-supported
If you can make the ads unobtrusive (noticeable, but not in the way) you can not only earn some dollars from Google Adsense, but you can also offer an annual fee to remove them from the interface.
6. Hosted service (SaaS)
Sugar CRM is a great example of software that is free to download and install on your own server, but you can pay a subscription to use their hosted service. This gives customers the benefit of never having to worry about keeping their software up-to-date, or any server-related issues.
7. Donations and Wall of Fame
Simply ask your users to make a donation to support the ongoing development of your software (and give them some options, like this.) You can list their name or company logo on a "wall of fame" page to recognise their support. You can also include a link to donate directly in your software (though make it discreet!) You can also use a service like Patreon to collect recurring donations.
8. Customizations
One-size-fits-all software will never fit everyone perfectly. If a user finds your software is 90% perfect, you could charge a one-off fee to make a custom modification for them. If you have enough users, this could turn into regular and significant revenue.
9. Premium support
Even though your product is free, you've got an obligation to support your users. This is another opportunity to generate revenue. Consider offering levels of support where standard support could take up to two days for a response, or for a one-time fee their request is expedited to within a few hours.
Bonus idea: Merchandise
If your product gets popular enough (and you have a cute logo or mascot) you can offer users mugs, t-shirts, and whatever else, so they can show their support.

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