Open Core

An open core business publishes its core software under an open-source licence and sells proprietary additions — security, governance, scale, support, or a hosted version — to organisations that need them.

Adoption comes before revenue: developers use the free version, and the company monetises the subset whose employers require the commercial layer.

Revenue comes from enterprise subscriptions covering advanced features, managed hosting, support contracts with service guarantees, and compliance capabilities.

Conversion rates from open-source users to paying customers are typically low in percentage terms but applied to a very large base.

• Open-source adoption — downloads, stars, active deployments
• Conversion rate from community to commercial
• Net revenue retention within enterprise accounts
• Contribution activity from outside the company
• Share of revenue from hosted versus self-managed

Healthy open core companies show large open-source adoption, a clear and stable line between free and commercial capability, and enterprise features that genuinely only matter at organisational scale.

Repeated licence changes are a warning sign that the boundary was drawn wrong.

• Open source with proprietary enterprise edition
• Open source with commercial managed hosting
• Source-available licences restricting competitive hosting
• Support and certification subscriptions
• Dual licensing for commercial redistribution

• What prevents a cloud provider from hosting the open version?
• What is the conversion rate from community to paid?
• How much development comes from outside the company?
• Has the licence changed, and how did the community react?
• Which features genuinely require enterprise scale?