Plenty of companies sell proprietary software: Microsoft, Apple and Oracle, for example. And many companies, such as Red Hat and IBM, make money by selling support, hosting or consulting for open-source software. But what's less known is that companies can release their software as open-source while also selling a commercial version of the same product.
"If you own the copyright, you can do whatever you want," says Lawrence Rosen, an intellectual property attorney with Rosenlaw and Einschlag. "You can license it to person A under one license, and to person B under another."
For example, Jaspersoft, a maker of business intelligence software, offers an open-source "community edition" as a free download that can be modified and used in other products or services, as long as they comply with its open-source license. Jaspersoft also has a commercial edition that offers support, managed release cycles and additional functionality.
Some software buyers deliberately seek out such dual-licensed software. David Bragg, CIO of the Navy's Naval Safety Center, says that dual-licensed software can be more secure, more customizable and cheaper than software that's available only in proprietary form.
"At the Department of Defense, we certainly take security seriously," he says. "The nice thing about open source is you get to see the code. It allows you to assess the software for security issues."
Being able to open the hood also allows his team to modify the software if they need to. For example, when his team first rolled out software from Jaspersoft, a little tweaking was needed to integrate it with the agency's security access cards.
Bragg says his team tried another product first, but had issues maintaining it. "We were able to get Jaspersoft to work immediately."
Plus, Bragg says the Jaspersoft application was less expensive than the other software, even though the Naval Safety Center opted for the commercial version, not the free, open-source one.
"When there's an open-source option available, I see that the cost for the commercial version is less, sometimes significantly less, than a commercial proprietary product offering the same capabilities," Bragg says. One reason is that the company is competing against a free product, he says, plus there's a large community of outside testers and developers who work on the open-source project.
The naval center opted for the commercial license to get professional support and patching-but also to ensure that Jaspersoft stays in business so it can continue to support the product.
Bragg says that his team previously used the open-source version of the Solaris operating system, but has since moved to the commercial version, and has also shifted from the open-source version of the JBoss app server to the commercial one.
Another vendor that offers dual licenses is Teleplace, which makes virtual environment software for training, simulations and collaboration. CEO Tony Nemelka says Teleplace decided to make the current version of its proprietary software open-source to increase its community of users and make the software attractive to potential customers who cannot yet afford the full version.
Read more about open source in CIO's Open Source Drilldown.