New breed of open source start-ups eye rising revenues and IPOs

This article discusses the second generation of open source companies and new profit turning trends. Traditionally, “Open source software companies rely on networks of volunteer developers to help write their code and build an initial user base. They then aim to turn users into customers, giving the software away free while selling support services or add-ons.”

Companies have begun to take advantage of cloud computing and big data analysis as a platform on which to base their services and are becoming more savvy about integrating commercial services with the free products. For example, through the use of add-on technology or running the software through their own servers. However, the problem of “turning reach into revenue” still remains and there is looming fear that the big tech giants will win the game before they’ve had a chance to compete.

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