In the first post of this two part series I gave a few examples of how open source helps business. Just to balance things out, lets examine a few ways Open Source software hurts the business model:

  1. Open Source hurt competitive companies who follow a more traditional business model; Create a product, Sell the product. Companies/groups developing Open Source software don’t charge for their product, but charge for support.
  2. If the producer of the software doesn’t support the product, the end may have to use another company for support.
  3. Many software companies who use to offer moderate products are being overtaken by open source, causing them to open source their products or else discontinue the product. I hope your business doesn’t have one of those products!
  4. The bandwagon fans pull more and more users from proprietary products even when the proprietary product may be more stable and secure. Everyone has been a bandwagon fan at some point and tried one of these projects.
  5. Many companies wont allow their proprietary products to play nicely with Open Source products. Maybe this is for security or maybe just that they’ve worked out deals with other proprietary companies. For instance it wasn’t all that long ago when a lot of software would only support Microsoft SQL Server or Oracle. This is becoming less of the case, but the business may get stuck in this sutuation. Granite, this is rarely the case these days, but it still happens.

I realize some of these points are assuming the “business” is the producer, and some consider the business a consumer of a product. Open source can hurt in both directions. It’s all one big circle. All in all it was tougher to come up with real legitimate reasons Open Source hurts the business model other than it offers its product for free. But anyone know of any other set backs?