Commercial vs Open Source Software: Benefits and Drawbacks

Business owners in need of software have two distinct choices – commercial software and open-source software.

Global sales of enterprise software maintain steady annual growth and are expected to reach $421 billion by the end of 2019, Gartner says.

Meanwhile, organizations increasingly turn to open source solutions, including in the areas that have historically been associated with commercial software. According to the survey which queried 950 IT leaders worldwide, 68% of responders reported the increased use of open-source software at their companies over the last year. And 59% expect to do so in a span of the next 12 months.

Let’s weigh the open-source and commercial software advantages and disadvantages to see which option suits your business the best.

What is commercial software?

Сommercial software is produced and distributed for commercial purposes. This article focuses on open source vs proprietary software that is distributed for a fee. However, various commercial software models exist, including free commercial software.

With non-free licensing, the customer pays an initial charge for the software and an additional annual charge for support. The software vendor takes care of quality control, as well as of further maintenance, upgrades, and tech support. The company selling the software is expected to provide timely patches, bug fixes, and updates.

These paid software solutions ranked in the Best Software Products of 2019 by G2 Crowd Awards:

  • AWS Lambda – a serverless computing platform by Amazon;
  • Tableau Desktop – a data visualization tool;
  • AdSense – an ad-targeting platform by Google;
  • Splunk Enterprise – a business analytics tool;
  • Shopify – e-commerce platform.

Advantages of commercial software

Some of the advantages of using commercial software for business purposes include:

  • Clear usage and licensing requirements. One of the benefits of commercial software for businesses is that it comes with a well-documented guarantee that you have support behind it.
  • A single point of contact for any problems. The reasoning here is as straightforward as it could be. When you’ve paid for a software product, there is a tangible counterparty to address if an issue arises.
  • A well defined and upgrade and development plan for the software. Timely updates allow companies to prevent the expenses that result from technical failures.

“Over the last year, the US companies have lost over $608 million due to technical debt. The overall amount of IT technical debt in the US business sector reached $.54 trillion. More than $517 million was lost due to legacy system problems.” CISQ

Disadvantages of commercial software

Of course, there are some potential drawbacks of commercial software as well. Those potential pitfalls include:

  • No guarantees that the software will perform as needed. It’s only fair to expect a high-performing and secure solution when it’s backed by a corporate image, a QA team, and professional support. However, that’s not necessarily the case. The Software Fail Watch reports 606 companies losing over $1.7 trillion from software failures last year alone.
  • Strict licensing guidelines. Over a quarter of businesses (76%) admit opting for over-licensing in fear of software audits, the ITAM Review research
  • The vendor may decide to discontinue the software, and business owners will need to look for a comparable software package. Transitioning to a new software solution may not only cost you time and money but also cause data migration and integration issues. It will likely require re-training stuff as well.
  • Proprietary source code. You will be unable to tailor the source code for your needs. For any additional functionality, you have to upgrade to a more expensive plan.
  • Risk of software license waste. Except for software that is necessary for your company’s operation, a good chance is that the app will be just sitting there unused. Different researches estimate 30 to 37% of commercial software licenses in businesses being wasted or significantly underused. Camtasia Studio, Adobe InDesign, and Crystal Reports are among the most unused enterprise software.

What is open-source software?

Open-source software refers to that anyone can view the application source code. There are well over half a hundred approved open source licenses, ranging from permissive licensing that allows you to do just about anything to those with more strict enforcement on how the software will be used.

The focus of the article is open source applications that fall under the former, free open-source software.

Some of the top open-source software projects that hit it big recently are:

  • Red Hat – earlier this year, the company was acquired by IBM for $32 billion.
  • GitHub – was acquired by Microsoft for $7.5 billion in 2018.
  • MuleSoft – was bought by Salesforce.com for $6.5B.

Other prominent open-source companies are Confluent, DataBricks, HashiCorp, Kong, and Cockroach Labs.

Advantages of open source software

Some of the advantages of using open-source software include:

  • The software is freely available, with less stringent licensing requirements. For every kind of paid software, there’s a free open-source software alternative with similar features.
  • Bug fixes can be implemented quickly without going through the corporate approval process.
  • The software may work across many different platforms. For instance, professional designers often use Inkscape is a cross-platform and open-source alternative to Adobe Illustrator.
  • The software can easily be audited for security purposes. Security-wise, the big win in using open source programs is that they are transparent by design. Anyone with enough technical expertise can inspect the source code and fix or report possible security issues. Some open-source companies even offer bounties for bug reports for contributing to the security of their products.
  • Qualitative shift in open source community and ecosystem. The lion’s share of today’s open-source products is created within the corporate businesses. It is not uncommon for 90% of OSS project code to be written by the same employees who develop commercial software. A glance at the top corporate GitHub contributors shows the trend:
  1. Microsoft heads the list, with about 1,300 employees actively contributing to GitHub repos.
  2. Google is the runner up (900 employees).
  3. RedHat (442), IBM (300), and Pivotal (297) are next in the top 5 most active contributors.

Disadvantages of open source software

Some of the potential drawbacks of free software include:

  • There is no guarantee that the software will work in the user’s environment off the shelf. Firstly, there may be compatibility issues with existing software or hardware. Then, it will likely require an assigned specialist to install and maintain the infrastructure.
  • The support is provided by volunteer computer enthusiasts and not by paid staff members. Open source products are safe only for as long as they’re actively maintained and supported. More than 40% open-source codebases have high-risk vulnerabilities, 2019 OSSRA report states. The oldest and still the unfixed severe issue was found in FreeBSD codebase – this flaw is 28 years old by now.
  • The development and support plans for the software may be uncertain or limited. Multiple factors may determine the future of an open-source project after its release. Some are impossible to predict or foresee:
  • James Kyle, a known open source JS libraries contributor, has addressed the “open source maintainer burnout” effect. Sometimes the contributors abandon the projects after constant discouraging criticism of their work. Overall, about 16% of open source projects become abandonware. 59% of these projects never attract new core contributors to get recovered.
  • Increased security risk. Even the widely used and well-supported open-source software may contain security exploits. A good example is QEMU  – an open-source VM solution integrated with many leading cloud-based services providers. In 2015, a significant vulnerability was discovered in QEMU code. The exploit went unnoticed for the prior 11 years and traced its ancestry back to floppy disks.

Conclusion

Wrapping up, both commercial software and open-source software have their advantages and pitfalls. The benefits of commercial software include support guarantee, timely updates, and patches.

While being free and customizable, open-source business software comes with hidden costs relating to maintenance, training staff, and security risks.

Regardless of the licensing type, most good practices involve professional developers who can set up and fine-tune the environment tailored to specific business needs. If you need professional advice, don’t hesitate to contact our experts.

Updated on 02.10.2019

Lou photo
quotes
I've founded Echo based on my three passions: engineering, marketing, and headhunting. As a company CEO, it is always hard for me to make time for writing. However, I like sharing my experience with people around.
Lou photo
Lou Reverchuk

Entrepreneur, Marketer, Writer

2
Leave a Reply

2 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
2 Comment authors
  Subscribe  
newest oldest most voted
Notify of
Adams

With the many advantages of the open source software, I still prefer a commercial license due to the full rights of ownership most of them grants and other great benefit that comes with it such as the free support, updates, bug fixes and revised documentation as new product versions are released.
But I do advice to always opt in for the free stuff when not sure of its functionality/usage and upgrade once it turns out to be of immense value to you

Hugh Sellers

I used to avoid open source software but through the years, I’ve found it can be just as good and sometimes better than commercial software. I’d say 7 out of 10 times I’ll go with commercial software but open source continues to improve. As it does, more people realize it can be an excellent resource.

Ready to hire a team of developers? Let's talk
Go up