On September 13, 2006, Ray Wu, who currently leads Hewlett-Packard's venture management organization to manage inbound technology evaluation, gave a talk in Mountain View, CA on open source business models.
He began his talk on the duel license model. The duel mode provides for a free license for the basic open source software version, and a commercial license for an advanced version of the same product. Examples of the duel license model include: JasperSoft, Inc. and XenSource, Inc. Even though a product may be free, customers at times desire the commercial license because they need support, training, customization. The duel license model is a way for the open source provider to sell into the enterprise level without going through traditional sales channels such as direct sales or reseller relationships.
Another open source business model is the hosted model, where a customer receives upgrades to an open source product through a hosted system that delivers software as a service. This allows the vendor to receive recurring revenues. An example of this model is JotSpot.
In the support model, the open source software vendor gives away the software for free, but obtains revenues through support and other services. Users subscribe for the latest features. An example of the support model is RedHat, Inc.
The layering model allows the vendor to use commoditize on a layer that is not critical and monetize from an associated solution to a larger competitor's offerings.
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