6. Revenue Models

Revenue models can range from pure proprietary to pure open source, with many variations in between. Each of the models discussed here has its own success stories, but their effectiveness depends on the specific situation. Proprietary software is riskier for customers because of black-boxing and vendor lock-in. But open source software is generally harder to monetize because it provides the four freedoms. That means people can use it without having to pay the developers. As a rule of thumb, the more proprietary the revenue model, the harder it is to attract users, but the easier it is to generate revenue. Conversely, the more open-source the revenue model, the easier it is to attract users, but the harder it is to generate revenue.