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Because creators cannot require each user to pay a license fee to fund development this way, a number of alternative development funding models have emerged. An example of those funding models is when bespoke software is developed as a consulting project for one or more customers who request it. These customers pay developers to have this software developed according to their own needs and they could also closely direct the developers’ work. If both parties agree, the resulting software could then be publicly released with an open-source license in order to allow subsequent adoption by other parties. There also exist stipends to support the development of open source software, such as Google’s Summer of Code. 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.

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 new funding approach for open-source projects is crowdfunding, organized over web platforms like Kickstarter, Indiegogo, or Bountysource. This article may need to be cleaned up. It has been merged from Commercial open-source applications.

This section needs additional citations for verification. Open-source software can be sold and used in general commercially. Also, commercial open-source applications have been a part of the software industry for some time. Therefore, there is considerable debate about whether vendors can make a sustainable business from an open-source strategy. In terms of a traditional software company, this is probably the wrong question to ask. IBM who may not have an objective of software license revenues.

Below are existing and legal commercial business approaches in context of open-source software and open-source licenses. Dual licensing offers the software under an open-source license but also under separate proprietary license terms. The proprietary version can be sold to finance the continued development of the free open-source version. Some open-source organizations such as the Mozilla Foundation and the Wikimedia Foundation sell branded merchandise articles like t-shirts and coffee mugs. Another financing approach is innovated by Moodle, an open source learning management system and community platform.

Also, combining desktop software with a service, called software plus services. Because of its lack of software freedoms, Richard Stallman calls SaaS “inherently bad” while acknowledging its legality. Other financial situations include partnerships with other companies. Governments, universities, companies, and non-governmental organizations may develop internally or hire a contractor for custom in-house modifications, then release that code under an open-source license. Also, there were experiments by Independent developers to fund development of open-source software donation-driven directly by the users, e. In 2004 the Mozilla Foundation carried out a fundraising campaign to support the launch of the Firefox 1. The users of a particular software artifact may come together and pool money into an open-source bounty for the implementation of a desired feature or functionality.

Offering bounties as funding has existed for some time. Another bounty source is companies or foundations that set up bounty programs for implemented features or bugfixes in open-source software relevant to them. For instance, Mozilla has been paying and funding freelance open-source programmers for security bug hunting and fixing since 2004. Crowdsourcing is a type of participative online activity in which an individual, an institution, a nonprofit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, the voluntary undertaking of a task via a flexible open call. Some companies sell proprietary but optional extensions, modules, plugins or add-ons to an open-source software product. This approach is a variant of the freemium business model.