To understand today’s software industry, it is impossible to leave out open source. The internet services we use every day, cloud platforms, mobile applications, and even operating systems are mostly built on top of open source. For developers, open source is no longer something special. Downloading code from GitHub, installing libraries through package managers, and solving problems through community discussions have become a completely natural part of development culture. Yet within this familiar landscape, there is a peculiar question hidden beneath the surface: what kind of economic structure sustains software that is used by so many people?
Open source is often understood as “free software.” In reality, many projects can be freely downloaded and used by anyone. As long as the license terms are respected, both individuals and companies can utilize the software at no cost. However, the real software industry is not that simple. Maintaining a project used by millions requires infrastructure costs, development resources, security response, and community management. Despite this, a large number of open source projects operate without a clear revenue model. And it is precisely at this point that the central question of this series begins: how does software that is freely available actually make money?
This question goes beyond the livelihood of individual developers. Open source has already become the core infrastructure of the modern software industry. Projects such as Linux, Kubernetes, PostgreSQL, and OpenSSL form the digital foundation used by companies worldwide. If these projects fail to achieve sustainability, the impact will inevitably extend beyond specific communities to the entire industry. In other words, the economic model of open source is no longer just a community issue—it has become a structural issue for the software industry as a whole.
Why Do Most Open Source Projects Fail to Make Money
An interesting fact is that most open source projects actually generate little to no revenue. There are tens of millions of repositories on GitHub, but only a very small fraction have stable business models. Many projects begin as personal side projects, and over time attract far more users than initially expected, yet the corresponding economic reward rarely follows.
This structure is often referred to as the “open source maintainer’s dilemma.” Companies actively rely on open source, but rarely pay directly for the projects themselves. As a result, critical infrastructure ends up depending on a small number of maintainers. It is not uncommon for projects that the entire internet depends on to be effectively maintained by just a handful of developers.
The first article in this series takes a deep look at this very issue. It explores why projects used by so many people end up in economically unsustainable situations, and how the open source ecosystem has attempted to address this problem over time.
Red Hat — A Case of Becoming a Billion-Dollar Company with Open Source
However, open source does not always fail economically. Historically, the most famous success story is Red Hat. By selling an enterprise operating system based on Linux, Red Hat was the first to prove that open source could become a massive business. In particular, its subscription-based support model established a new standard for open source business.
The core of this model was not selling the code itself, but selling trust and support. Enterprise customers chose Red Hat’s services—which provided stable updates and technical support—over freely downloadable Linux distributions. And this strategy achieved remarkable success. In 2019, Red Hat was acquired by IBM for approximately 34 billion dollars, becoming the most successful company in the history of open source.
The story of Red Hat raises an important question: is open source truly free software, or is it a new form of software business model? In the second article, we will explore how Red Hat transformed open source into a large-scale industry through its strategy.
Open Core Model — A Compromise Between Free and Paid
After Red Hat, many companies attempted to build businesses based on open source. However, not all projects could succeed with a support contract model. Especially for software such as databases, development tools, and infrastructure platforms, a direct product sales model targeting enterprise customers was necessary. This led to the emergence of the Open Core model.
The Open Core model makes core features available as open source, while offering advanced or enterprise features in a commercial version. This strategy created a delicate balance between the community and enterprise customers. Developers could freely use the free version, while enterprise customers paid for additional capabilities.
This model has been adopted by companies such as MongoDB, GitLab, and Redis, becoming a key strategy in open source business. At the same time, however, it sparked debates over “what truly qualifies as open source.” The third article will examine why the Open Core model emerged, and what kind of tension it created between communities and companies.
Elastic vs AWS — Conflict in the Cloud Era
With the rise of the cloud era, open source businesses faced another challenge. Many cloud platforms began offering popular open source projects directly as services. This issue became particularly evident in the conflict between Elastic and AWS.
Elastic’s Elasticsearch is a widely used search engine around the world, but AWS built its own cloud service based on it. The controversy arose because AWS was criticized for monetizing open source code while contributing very little back to the project’s development.
This conflict went beyond simple corporate competition, revealing a structural tension between open source and cloud platforms. In the fourth article, we will explore why this case led open source companies to become wary of cloud providers.
License Wars — Attempts to Create New Rules
Conflicts with cloud companies ultimately led to changes in licensing. MongoDB introduced the SSPL license, and several projects began adopting BSL or their own custom licenses. Elastic also abandoned the existing Apache license and transitioned to a new licensing system.
This shift marked a critical turning point in the history of open source. Licensing rules that had been maintained for decades were no longer suitable for the cloud era. Many projects chose new licenses to protect their businesses, but in the process, the debate resurfaced: “is this still open source?”
In the final article of this series, we will examine what these licensing changes mean for the open source ecosystem, and how open source may evolve in the future.
Viewing Open Source Not as Technology, but as an Economic Model
This series approaches open source not as a simple development culture or collaboration method, but as an economic model. Open source is no longer a small community experiment. It has already become a massive ecosystem at the center of the modern software industry.
And within that ecosystem, an important question still remains. How can software that is freely available remain sustainable? How can a balance be created between developers and companies, communities and platforms?
This series is a journey that follows those very questions.
