Open source vs licensed software: which suits you?

What is open source software?

Open source means the source code, the instructions the software is made of, is public. Anyone may look at it, use it and often also adapt and share it. Well-known examples are WordPress, Linux, the Firefox browser and many of the frameworks developers use to build websites and apps.

Open source is usually maintained by a community of developers, sometimes with a company behind it offering paid support or hosting. That doesn't make it a hobby project: a large part of the internet runs on open-source components.

What is licensed software?

With licensed software, also called commercial or proprietary software, you don't buy the software but a right to use it. The code stays secret and belongs to the vendor. You pay once, yearly or monthly, often per user. Think of Microsoft 365, many accounting packages and most SaaS services (software you use in the browser on a subscription).

Licensed software isn't necessarily better or worse than open source. What you're mainly buying is convenience: someone else takes care of development, updates and the helpdesk. That's valuable for tasks that are the same at every business. It gets trickier when your way of working differs from what the package expects, or when you come to depend on one vendor for something at the core of your business.

Pros and cons of open source

• Pro: no licence fees per user.
• Pro: no vendor lock-in. You're not tied to one supplier and can bring in any developer who knows the technology.
• Pro: you can adapt the software to your own way of working.
• Pro: the code is public, so bugs are often found quickly by the community.
• Con: no helpdesk you can call, unless you arrange one separately.
• Con: you're responsible for updates yourself, or you have to hire someone who does them.
• Con: popular open-source software is popular with hackers too. Overdue updates are a known risk, for example with WordPress plugins.
• Con: small projects can stop if their makers no longer have time for them.

Pros and cons of licensed software

• Pro: support, manuals and a vendor who is responsible.
• Pro: updates and security are usually handled for you, especially with SaaS.
• Pro: quick to get started, without technical knowledge.
• Con: recurring costs that usually rise with the number of users.
• Con: you depend on the vendor. If they raise the price or drop a feature, you have little say.
• Con: customisation is limited to what the vendor allows.
• Con: moving your data to another package is sometimes difficult.

What do open source and licensed software really cost?

Don't compare the price on the website, but the total costs over three to five years. This is also called total cost of ownership. For both options, include:

• Licence or subscription fees, based on the number of users you expect in a few years.
• Setup and adapting it to your way of working.
• Hosting, if you don't use the software as a service.
• Maintenance, updates and security.
• Training your team.
• The cost of switching if it no longer fits.

You often see licensed software start cheap and get more expensive as you grow, while open source costs more at the start and stays more stable afterwards. But it can also turn out the other way round. Package prices change regularly, so always check the current price with the vendor.

A worked example without real prices: a package with a per-user subscription feels cheap with three employees. Grow to fifteen employees and pay for extra modules too, and the yearly amount is five times as high. Your own solution built on open source costs more at the start, but the number of users then makes little difference to the bill. Do that sum for your own situation.

Open source licences: MIT, GPL and more

Free doesn't mean without rules. Open source has a licence too, which says what you may do. Broadly, there are two kinds:

• Permissive licences, such as MIT and Apache: you may use the code freely, including in commercial software, as long as you include the licence text.
• Copyleft licences, such as the GPL: if you distribute modified versions, you must make them public under the same licence.

For most websites and internal web applications that's not a problem, because you don't distribute the software. If you sell software to others, it's wise to have the licences checked properly. For legal questions, it's best to consult a lawyer.

How to choose between open source and licensed software

Ask yourself these questions:

• Is this a standard task, such as accounting or email? Then a proven licensed package is often the most practical.
• Is this something that sets you apart from competitors? Then you want the freedom to adapt it, and custom work built on open-source components is often stronger.
• Do you have someone who keeps up with updates and security? If not, sort that out first with open source.
• How many users do you expect in three years?
• How important is it that you can switch suppliers?

In practice, most businesses combine both. A licensed accounting package, connected to a custom web application built with open-source frameworks. Want to know more about that trade-off? Read custom software or an off-the-shelf package and no-code or custom software.

How Violexa works with open source

At Violexa we build custom web applications and software with mainstream open-source frameworks. That means you pay no per-user licence fees for the foundation, and another developer can understand the code later on. Where an existing package fits better, we connect to it instead of building everything ourselves. A custom web application starts from €1,799 excl. VAT (€2,177 incl. VAT). Read how to arrange ownership in owning your website, code and domain.

Not sure which software suits your business? Book a free quickscan. In 30 minutes, online or on site, we look at your situation. Afterwards you get short written advice with a price indication, with no obligation.

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