12 January 2005

Dual Licensing Scheme(Bringing Open Source to the Bank)

Ever wonder how SleepyCat Software, the maker of the most powerful open source embedded database called BerkeleyDB, is purring all the way to the bank? And how about MySQL AB and Trolltech the makers of QT are cashing in from open source?

Fortunately, I was able to read the hard copy of this Linux Magazine article during a power failure. Most of us are familiar with typical business models that is associated with open source known as consulting, subscription and support. It's all too familiar that almost everybody will adapt these revenue models in order to make money for open source.

But there's another one, it's called duelling licensing. So what's the big deal with dual licensing? Dual license enable us software developers to distribute or publish commercial software license for a fee or royalty. Dual License provides a low-cost alternative to open source. While giving the software away for free to wider community. With dual license, publishers can distribute low-cost version of the open source product, extend it or modify it without having to publish the modifications. Vendors can redistribute dual-licensed product even in pure binary format. Of course, it is the vendors' responsibility to warrant the usability and merchantibility of the product.

As stated in the article; "Moreover, a dual license model can deliver higher margins than an open source subscription model. For instance, Red Hat sells subscriptions to Red Hat Enterprise Linux and Red Hat Network. However, competition with SuSE, Miracle Linux, and Red Flag, and Red Hat's high list price for its premium offerings (which, in a number of cases, is significantly discounted), limits Red Hat's ability to attain volume sales and market saturation." I would like to add that JBoss, Hibernate and other Java-based Open Source Trying-Hard-Frameworks does not adapt this kind of business model. The inferior JBossMQ will not even qualify for QA for it to be dual-licensed. Thank goodness.

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