Starting a Tech Business: A Practical Guide for Anyone Creating or Designing Applications or Software

Understanding Open Source

Open source software is generally free or inexpensive. Why would someone write free software? Well, the first thing to know about open source is that it doesn't mean free overall since the biggest cost attached to using an application is its set-up, integration, and ongoing support. Various reasons exist as to why people write open source software.

First, it's important to recognize that open source does not equal nonprofit. Open source is a business model that many companies have used successfully, usually by offering support, training, and consulting for the application they've released. Red Hat, for example, offers training and support on the open source operating system, Linux. MySQL is an open-source database company that was purchased by database giant Oracle.

Consider Freeside's situation: To date, billing software is usually sold by large companies to other large companies, mostly in telecommunications and media. Freeside could have gone head to head with those corporations using a closed-source model with some kind of angle, such as cheaper or better for specific situations. However, that would have required a lot of money and risk. Instead, Freeside went open source and has emerged as one of the leaders in open source billing, probably without spending a lot of money on marketing and sales. Anyone who wants a low up-front cost, code transparency, or likes open source will give this company a serious look. Additionally, it's probably profitable ...