Loose Open Core

Loose Open Core is a model where the software has its primary functionality covered under an open source license (the “core”), with proprietary software wrapped around it. This model encourages widespread distribution of the core software, and tries to ensure that enough value exists in the proprietary software around it to convince their target market to make a purchase.

Who uses it?

When should it be used?

This is model that is frequently used by venture backed startups, where a single company puts in the bulk of the engineering and product resources. If the core project is successful, it leads to a large funnel of users that can then be sold the proprietary software.

If the core of the software has broad applicability to a wide market, and you can envision a proprietary product targeted at some segement of the market, this model can work well.

What kind of monetization is possible?

These communities are often monetized from the beginning, or at least are intended to be. The difficulty with this model is that it can be hard to determine where the right line is for a given feature - does it belong to the proprietary software, or the open core?

Typically, there is a single company that monetizes the core software.

Does this model help create a Sustainable Free and Open Source Community?

Maybe. If we treat the core software as essentially a free software island with a single downstream derivative, then yes, assuming others are allowed to also build proprietary software around the core.

However, this is often murky - since the company’s strategy depends on convincing a segment of the population that they must purchase the proprietary software, it will be easy for the company to turn to other models, which may mean it is no longer sustainable by the community.