How do Open source companies like WordPress, Andriod, and MongoDB make money?

4 min readNov 27, 2022

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Businesses with open source business models offers a “free”, open-source version of their software and a “paid” version with additional proprietary features that would be a pain to replicate.

Example: MongoDB is a free open-source NoSQL database but their GUI and analytics tool Mongo Atlas is paid.

companies using an open-source business model

Other examples are Andriod, Firefox, Java, Redhat, Docker, etc

Similarly, “Wordpress.org” is an open-source CMS while “Wordpress.com” is developed and run by the private company Automattic.

Then how the heck WordPress makes money?

WordPress.com lets you buy a domain, and host it without worrying about performance and Makes money from hosting and other services

While WordPress.org is the open-source version installed using Cpanel by the user and makes money from the Marketplace add-on and Run majorly through donation.

What are the types of Open source business models?

The business model is all about creating and capturing value. But Open-source software only covers the first half of that mysterious equation.

1. Open Core

It’s a business strategy where a company offers a “core” version of a product with limited features as free and an add-on commercial version as proprietary software.

The free version acts as a growth channel and builds a base of users that can add to the source code while The enterprise version developed by the company will drive revenue.

2. System integration or Services model

When a customer pays for technical support, consulting services or additional add-ons.

Example: Red Hat, Video JS founder
No Red Hat makes 3x the revenue from consulting, but their margin is 31% compared to 93% on their subscriptions.

So the Services revenue is unpredictable and requires a significant headcount with thinner margins.

3. Hosting

It enables small companies that don’t have sophisticated in-house DevOps teams to use companies own infrastructure without having to be concerned with the operational overhead of managing the infrastructure.

Example: Mongo Atlas, Sanity CMS

MongoDB’s cloud business operates at ~65% and Elastic’s at ~40%.

4. Marketplaces

The core product is open source, and they make revenue from marketplace/addons/plugins.

Example: WordPress, Android

Android makes money from play store fees.
WordPress makes money from marketplace fees.
Mozilla generated $500m in annual revenue by making google a default search engine.

How you can think about monetizing your open-source business model?

Paid support — Project maintainer, you have a lot of knowledge about the codebase.
Software as a Service (MongoDB) — Offer a complete Solution, Monitoring tool for optimization
Open-core model — Alternative for open source projects to monetize their code request
GitHub sponsors — 100% of sponsorships go to the developers.
Paid feature requests — Get Paid To Build Open Source Extensions for Existing Products
Get paid to build open-source extensions for existing products.

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