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Open-source software can be free to download and use without being free to create, maintain, secure, or operate. “Free” in open source is principally a matter of license rights: the license must let people use, study, modify, and redistribute the software, including selling it without owing a royalty for that sale. It is not a promise that the people and organizations keeping the software useful work without pay.
Is open-source software really free?
Sometimes it costs nothing to acquire; that is different from saying it has no cost. The Open Source Initiative’s Open Source Definition sets conditions for what a license must allow. It requires source-code availability, permission to make and distribute modifications, and no restriction on fields of endeavor. Its first criterion says, “The license shall not require a royalty or other fee for such sale.” That means recipients can redistribute the software without paying a royalty just for selling it. It does not require authors to work without pay or projects to provide every related service at no charge.
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Open source also has a defined licensing meaning; it does not simply mean that source code is visible. The definition is about the rights granted by a qualifying license, not the price of every product, service, or deployment built around that code.
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An organization may download code without paying its original author and still spend money and staff time to evaluate it, integrate it, customize it, host it, review its security and license compliance, train people to use it, apply updates, and respond to incidents. These are possible adoption and operating costs, not a universal bill. A small personal project may involve little expense for a user; a business relying on software in critical operations may need substantial internal work or paid services.
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Can open-source software be sold or used commercially?
Yes. The Open Source Initiative (OSI) says in its Frequently Answered Questions: “Absolutely. All Open Source software can be used for commercial purpose; the Open Source Definition guarantees this. You can even sell Open Source software.” Commercial use is not the same as proprietary use: selling, deploying, or incorporating open-source software does not automatically remove the license obligations attached to it.
For example, a license may require that recipients of a redistributed derivative work receive it under the same license. Those conditions matter when software is distributed; check the actual license and how the code is being used rather than assuming that either commercial use or an open-source label settles every obligation.
How businesses can earn money around open source
Open-source rules leave room for several economic arrangements. A company can pay employees or contractors to contribute to shared code; a project can receive direct contributions; and a vendor may charge for hosting, support, integration, training, or managed operations. Software can also be included in a larger commercial offering when the relevant license terms are respected. These are possible models, not services or revenue streams that every project provides.
Who pays for open-source software?
There is no single answer. Costs may be borne by employers paying developers to work on shared projects, organizations making direct contributions, customers buying services, or users who fund their own implementation and maintenance. Some users may contribute time or money; others may use software without paying the project directly. Open source does not require every adopter to fund maintainers.
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A 2024 Linux Foundation Research report estimated $7.7 billion per year in organization-driven investment across the open-source ecosystem. This was an extrapolation from survey responses, not a direct accounting census. Many respondents could not provide detailed labor-hour or budget data, so the estimate should be understood as a broad measurement rather than a precise ledger of all support.
In the survey’s reported composition, 86% of measured investment was employee and contractor labor and 14% was direct financial contribution. The Linux Foundation described responses from 501 organizations globally and reported a median annual OSS investment of $520,600 per responding organization in 2023 U.S. dollars. That median is not a typical project budget or an amount every adopter must pay. These are survey findings, not a universal funding split or a stable ratio for every project. The Foundation’s 2024 Open Source Software Funding Report and its December 18, 2024 summary explain the measures and their limits.
What do estimates of open source’s economic value mean?
Economic value estimates answer different questions from funding surveys, and they should not be confused with money paid to maintainers.
- $4.15 billion, supply-side estimate: a 2024 Harvard Business School study by Manuel Hoffmann, Frank Nagle, and Yanuo Zhou modeled the one-time cost of recreating widely used open-source software. This is a redevelopment-cost estimate, not annual funding.
- $8.8 trillion, demand-side estimate: the same study modeled what firms would need to spend to replace the open-source software they use if it did not exist. It also estimated that firms would need to spend 3.5 times more on software in that scenario. This is replacement value, not annual revenue or what maintainers earn.
The authors’ study, The Value of Open Source Software, and the Linux Foundation Research overview, Measuring the Economic Value of Open Source, describe the estimates. The $4.15 billion and $8.8 trillion figures have different scopes and are not amounts to add together: one estimates a one-time supply-side recreation cost, the other a demand-side replacement value for firms.
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How can an open-source project get funding?
Project funding depends on the people, users, and organizations around it; there is no universal funding route. Common possibilities include:
- Employer-paid contributions: developers contribute to shared software as part of paid work. This labor is the largest share of measured organizational investment in the 2024 Linux Foundation survey.
- Direct financial contributions: organizations or individuals give money to a project. In the same survey, direct contributions were a minority of measured investment.
- Community or foundation alignment: OSI suggests connecting with existing communities or supporting foundations to find collaborators and potential sponsors. This can open a route to support, not guarantee it.
- Paid services: a project or vendor may charge for hosting, support, integration, training, or managed operations where the offering and license terms allow.
OSI says it does not directly fund individual open-source software projects. Its own work and funding support resources that enable, promote, and protect open-source development, adoption, and communities. Its FAQ describes those possibilities without promising that any project will receive funding.
What should users consider when adopting open-source software?
Do not stop at whether the download has a price. For an organization deciding whether an open-source option fits, assess:
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- Acquisition versus operation: separate the cost of obtaining code from hosting, support, maintenance, and other services you may need.
- Maintenance and security: identify who handles updates and security work, and whether contributors are supported by employers, grants, foundations, customers, or other sources.
- Paid service commitments: if purchasing support or managed operations, check the actual scope, response times, update policy, and accountability offered.
The practical distinction is simple: a license can make software available without a royalty while leaving the work of creating and sustaining it—and the cost of running it in a particular setting—to people and organizations.
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