# Commercial Open Source Software ## [What is Commercial Open Source Software?](https://www.webiny.com/blog/what-is-commercial-open-source) [[2020-10-26]] The elephant in the (meeting) room of the majority of the open source project founders has been one common, basic question: > How can we build a business around a product that we are committed to give away to the community for free? What started with Red Hat and their paid support and services model over 20 years ago has opened the door for open source communities to start exploring the various ways to monetize their products - which created a new wave of companies that we can group under the name of **Commercial Open Source Software.** This commercialization has not only allowed these companies to become sustainable but has also created this perfect symbiosis between the open source and its proprietary license counterpart that has become a credible new way of funding the further technology development and innovation. ### COSS business models The majority of COSS companies have built their business model in a way that allows them to capture part of the value that is delivered by their open source core product, by offering commercial versions of their products, alternative license options, or add-on proprietary software. While their success still fundamentally depends on their open source core technology. The opportunity to commercialize open source software has increased the appeal of OSS to investors, who in this modern-day also play a fundamental role in the development stage of open source start-ups by providing the crucial funding needed to form a dedicated full-time team to manage the project more effectively, grow the project up to a higher scale, and achieving the product-market fit. There are numerous different ways the open source companies have successfully approached the commercialization of their products, but we can group them under five main groups: 1. Support services 2. Hosting 3. Restrictive licensing 4. Open core 5. Hybrid licensing All five of these groups provide a different set of benefits and challenges that fit different types of open source products, and all have found their purpose amongst the COSS companies. But in the past ten years, one of these groups has really been standing out vs. others. The approach referred to as the Open Core model has proven to be the most frequent business model used by highly successful open source companies, that have managed to grow their business to the 100+ million dollar levels.*