Open source business models

Open source does not necessarily mean everything is free. At the opposite, it is clearly possible to earn money when deploying a business model based on open source. As an example, more than 70% of the global IT industry is based on open source elements.
This page presents some business models that can be relevant when launching a open-based business model.

OPEN BUSINESS MODEL	DESCRIPTION
1. Free + paid model	One part of the resources are free but others, absolutely necessary to get access of the benefits of the offer, must be paid (e.g. Android -free - needs a computer or a mobile (must be paid))
2. Fremium model	A product or service is provided free of charge, but money (the premium) is charged for advanced features, functionality, or virtual goods
3. Membership model	A coalition of interested organizations is invited to contribute a certain sum, either as seed only or as an annual contribution or subscription; this fund generates operating revenues for the open model
4. Donation model	Project deemed worthy of support by the wider community requests, and receives, donations. Donations are in turn managed by a non-profit foundation, which may apply them to operating expenses or, if amounts are sufficient, seek to establish an endowment. An example: the 1000 true fans
5. Contributor pay model	Adopted by the Public Library of Science, the `PLoS Open Access Model: One Time Author-Side Payments' (Doyle, 2005) consists of a mechanism whereby contributors pay for the cost of maintaining the contribution, and where the provider thereafter makes the contribution available for free.
6. Advertising model	Access is free and monetization comes from paid advertising
7. Institutionnal or governmental model	An institution or a government agency (including international ones such as the UN) provides direct funding for the project
8. Reputational model	The primary reward is a reputation, a non cash benefit. But this reputation allows the development of monetized activities
9. Gift economy model	The price for the value proposition is not fixed. Access may be free but you may also decide to pay what you feel right and fair regarding the value you get from the use of it (e.g. Wikipedia, OSlantis, ...)
10. Partnership and exchange model	Models where partners may provide or exchange financial and non financial (e.g. technical) resources against e.g. exposure
11. Support service model	The value proposition is free but users pay the service around the VP (e.g. widely use in the open source software industry, such as Red Hat)
12. Crowdfunding	Collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organization - used to initiate a project, not to support it over the long run
13. Endowment model	The project obtains base funding. A fund administrator manages this base funding and the project is sustained from interest earned on that fund.
14. For Open-source Hardware - Open-hardware development	Investors/donators (e.g. the 1000 true fan model or a crowdfunding campaign) Small series production: the 40% model - transparency about costs and a choice between paying us to make the product or doing it yourself. If we do it for you, we charge a markup of 66%, which give us 40% profit (if cost = $1, price = $1,66 and margin is 40% (O,66 out of 1,66)) Advertising model Product without IP model: The price of a typical gadget reflects the cost of making it and the price its inventor is charging for the IP in it (e.g. Intel price is $100 but production cost is just a few $) => Don't charge the IP and sell only the product at a cost + margin (big expansion of the market) - additional information here

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