Open Source Software - Funding

Funding

Unlike proprietary off-the-shelf software, which comes with restrictive copyright licenses, open source software can be given away for no charge. This means that its creators cannot require each user to pay a license fee to fund development. Instead, a number of alternative models for funding its development have emerged.

Software can be developed as a consulting project for one or more customers. The customers pay to direct the developers' efforts: to have bugs prioritized and fixed or features added. Companies or independent consultants can also charge for training, installation, technical support, or customization of the software.

Another approach to funding is to provide the software freely, but sell licenses to proprietary add-ons such as data libraries. For instance, an open-source CAD program may require parts libraries which are sold on a subscription or flat-fee basis. Open-source software can also promote the sale of specialized hardware that it interoperates with, as in the case of the Asterisk telephony software, developed by a manufacturer of PC telephony hardware (Digium).

Many open source software projects have begun as research projects within universities, as personal projects of students or professors, or as tools to aid scientific research. The influence of universities and research institutions on open source shows in the number of projects named after their host institutions, such as BSD Unix, CMU Common Lisp, or the NCSA HTTPd which evolved into Apache.

Companies may employ developers to work on open-source projects that are useful to the company's infrastructure: in this case, it is developed not as a product to be sold but as a sort of shared public utility. A local bug-fix or solution to a software problem, written by a developer either at a company’s request or to make his/her own job easier, can be released as an open-source contribution without costing the company anything. A larger project such as the Linux kernel may have contributors from dozens of companies which use and depend upon it, as well as hobbyist and research developers.