Dual-Licensing Business Model Proven Successful for Open Source Companies

Three companies, Sleepycat Software, Trolltech AS and MySQL AB, have shown an average revenue growth of 65% in 2003 by using a dual-license business model.

This increase is 10 times the overall growth of U.S. IT industry spending in 2003. The companies provide dual-license software to some of the largest customers in the world, including Cisco, Google, IBM, Motorola, Sharp Electronics and Yahoo!, among hundreds more. Dual-licensing allows open source projects to use the software at no cost, which contributes to widespread use and testing of the software and the fast growth of a large installed user base. Commercially-licensed customers generate revenue for the open source vendors, which contributes to the rapid development of high-quality software.

The guiding principle behind dual licensing is 'quid pro quo', or a fair exchange. Under this model, vendors offer their products under both an open source license and a commercial license. This allows open source projects to use the software at no cost, which contributes to widespread use and testing of the software and the fast growth of a large installed user base. Commercially-licensed customers generate revenue for the open source vendors, which contributes to the rapid development of high-quality software. The three CEOs will discuss from the benefits of dual-licensed products and how customers gain all the advantages of open source software, such as: In addition, customers gain all of the benefits traditionally associated with commercial software, including: