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Understanding the difference between Open Source Software and Commercial Software

by Snehal Naik
Understanding difference Open source and Commercial software
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Software licensing plays a crucial role in guiding developers and protecting intellectual property. Software license management dictates how developers can use, modify, and distribute software. Based on pricing, software can be categorized into open source and commercial software. Software licenses also establish the terms under which one can use and manage software. In the past few years, the growing popularity of open source software has changed the software industry landscape. The global open-source services market size is expected to reach around USD 138.61 billion by 2032. In this blog, we will look at the major differences between open source software and commercial software.

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What is Open Source Software?

What is Open Source Software

Open Source Software (OSS) is a software that is publicly available for use. An organization, group, or individual may have developed the software, but its source code is available to the public for view, use, modification, and distribution.

Under the open source licensing model, different entities can offer support, training, and updates for the software. While most features and services of open source software are free to use, some might be under commercial arrangement. OSS promotes collaboration and community-driven development.

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Examples of Open Source Software

Mozilla Firefox: An open source web browser. 

VLC Media Player: An open source multimedia player that supports a wide range of audio and video formats. 

Git: An open source distributed version control system widely used to track changes in source code during software development. 

Python Programming Language: Used for web development, data science, artificial intelligence, and more. 

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What is Commercial Software?

what is commercial software

Unlike OSS, commercial software is sold or licensed to end users for commercial purposes. Only the individual, organization or group who created the software can modify it. The source code of commercial software is protected, and users may also have to bear a high licensing cost. 

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Examples of Commercial Software

Adobe Creative Cloud: A suite of creative subscription-based software products, including Photoshop, Illustrator, InDesign, and Premiere Pro. 

Oracle Database: A commercial relational database management system (RDBMS) widely used for enterprise-level applications. 

Microsoft Office Suite: Includes products like Microsoft Word, Excel, PowerPoint, and Outlook for business and personal use. 

AutoCAD: A commercial computer-aided design (CAD) software used for creating 2D and 3D designs and drawings. 

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Open Source Software vs. Commercial Software: Characteristics

  1. Source Code
  • Open Source Software
    The source code of open source software is publicly available to its users. This increases its popularity among tech organizations and programmers, as users can redesign the source code, omit parts of the code, and add new functionalities.  
  • Commercial Software
    The source code of commercial software is accessible only to those who have developed it. This prohibits tampering with the software.

2. Professional Documentation

  • Open Source Software
    The quality of documentation of open source software can vary as anyone can easily view and modify it. OSS mostly relies on community-contributed documentation that can have diverse documentation standards.  
  • Commercial Software
    Most commercial software comes with professional documentation. Vendors invest in clear guides, manuals, and support materials. This documentation helps users understand how to install, configure, and use the software effectively. 

3. Specialized Features

  • Open Source Software
    OSS may often have features favored by a broad user base as it is driven by community development. This makes the software have features that are general-purpose and adaptable to diverse use cases.  
  • Commercial Software
    A lot of software that is commercially developed is often a result of specific industry needs. This makes the software have specialized features and functionalities tailored to the requirements of particular businesses or professions.

4. Security

  • Open Source Software
    The transparency of OSS allows the community to identify and address security vulnerabilities. Moreover, security issues are often met with rapid responses through collaborative efforts. 
  • Commercial Software
    Since users have to pay to use commercial software, it comes with regular security and release updates that address the vulnerabilities of the products. The priority updates protect users from potential threats and ensure a secure computing environment.

5. Legal Compliance

  • Open Source Software
    Open source software is often governed by open source licenses (e.g., GPL, MIT) that define the usage terms. Users can freely modify and distribute the source code. 
  • Commercial Software
    Commercial software comes with proprietary licenses with specific terms and conditions. Users have to adhere to licensing agreements defined by the vendor.

6. Freedom to Innovate and Distribute 

  • Open Source Software
    Since OSS is publicly available, users have the freedom to innovate, modify, and distribute the software. The publicly available source code can be customized to meet specific needs.


  • Commercial Software Innovation is mostly vendor-driven when using commercial software. Users have limited freedom to modify and distribute as per licensing terms.

7. Community Collaboration and Support

  • Open Source Software
    Open source software allows developers from all over the world to contribute to the evolution of software. This community collaboration facilitates easy modification, bug fixes and improvements in the software. In addition, open source communities have forum documentation and support so that developers can seek assistance and share insights. 
  • Commercial Software
    Commerical software has dedicated support from the vendor. This includes services like service-level agreements (SLAs) and professional assistance.

8. Transparency and Trust

  • Open Source Software
    OSS makes its source code openly available, which makes it easier for developers to access it freely. It makes the software usage transparent and widely adoptable. It also allows users to inspect the code for security and trustworthiness. 
  • Commercial Software
    Commercial software comes with a proprietary code that may lack transparency. The reputation of the commercial vendor often determines how trustworthy the software is.

9. Cost

  • Open Source Software
    Open source software is usually available for free with no licensing fees. Users may have to pay for additional features like specific support or customization.  
  • Commercial Software
    Commercial software charges licensing fees and subscription costs. In addition, users may also have to pay for support, training, and maintenance. 

10. Compatibility and Interoperability

  • Open Source Software
    OSS is more flexible and adaptable to diverse environments. It also pays more attention to open standards and integration capabilities. 
  • Commercial Software
    Commercial software can be more rigid in terms of interoperability despite following industry standards. The vendor’s development choices determine the integration capabilities of the software.
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Open Source vs Commercial Software: Comparison Table

Characteristics Open Source Software Commercial Software
Source Code Publicly available to its users Accessible only to its developers
Professional Documentation Depends on community contribution Comes with professional documentation
Specialized Features Features influenced by a broad user base Offers tailored features and functionalities
Security Community-based responses to security issues Comes with regular security and release update
Legal Compliance Governed by open source licenses Proprietary licenses with specific terms and conditions
Freedom to Innovate and Distribute Can be easily modified and distributed Limited freedom to modify and distribute
Community Collaboration and Support Support from open source communities Dedicated support from the vendor
Transparency and Trust Transparent and widely adoptable Dependent on reputation of the commercial vendor
Cost Usually available for free with no licensing fees Charges licensing fees and subscription costs
Compatibility and Interoperability More flexible and adaptable Comparatively rigid in terms of interoperability
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Open Source vs Commercial Software: Policy Concern

Software Piracy 

Consumers in developing countries often look to cheaper, pirated products to meet their computing needs when they cannot afford the high cost of commercial software.  

In contrast, open source solutions are freely available. As a result, some industry experts argue that the adoption of open source could potentially lead to a reduction in piracy levels.  

However, it is not entirely true that promoting open source software will eliminate software piracy, as those using open source software might at some point, need commercial add-ons. The solution is to have more robustness in the software industry so that piracy rates are lower. 

Digital Divide 

There is a lot of digital divide in some developing nations as it is difficult to find low-cost or affordable commercial software. This makes it necessary to build low-cost personal computers with built-in open source software. This reduces the initial cost of owning the computing technology.  

Commercial software vendors are now increasingly making low-cost and localized- functionality versions available to address the digital divide. However, it is important that users have access to appropriate content and applications, irrespective of which type of software they opt for.  

Domestic Software Industry Development

The IT and Software Industry of any nation determines its development. Software products, whether open source or commercial, help build technical infrastructures that help a nation take the lead. Commercial software comes with a closed source code, which might limit its accessibility to all kinds of businesses. As a result, companies welcome and prefer open source software solutions. The open source code helps many new businesses to jumpstart their journey.

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Open Source or Commercial Software: Which One is Right for You?

open source vs commercial software which is better

When choosing between open source and commercial software, several factors play a crucial role in the decision-making process. Here are key considerations:

Operational Cost 

Open source software generally has no licensing fees and, hence, lower operational costs. However, users may have to pay for support, customization, and maintenance. 

Commercial software usage comes with licensing fees that might add to the operational expenses. Also, support contracts and upgrades may come with additional costs.  

Project Goals 

If your project intends to have collaboration, transparency, and community involvement, open source software is a great choice. OSS is best suited for organizations that seek flexibility and customization in their projects. 

Web development projects that seek vendor support and proprietary features should benefit the most from using commercial software. It is also a good option for projects with specific requirements, strict timelines and a fixed budget. 

License Compatibility 

If your projects can be managed with usage licenses with different terms, open source software could work for you. It is important to evaluate how the chosen license aligns with your project goals and desired freedoms. 

If your project seeks specific terms and usage restrictions, you should opt for commercial software with proprietary licenses. However, it is important to review the commercial license to ensure it aligns with organizational needs. 

Target Audience 

A project that appeals to a broad range of audiences, including developers and communities, would benefit from open source software. It would also attract contributors and foster a collaborative ecosystem. 

Businesses and enterprises that seek stable, supported solutions would benefit from commercial software licenses. These would also provide users with specialized features catering to their specific industries. 

Market Trends 

Both open source and commercial software align with current trends and adapt well to emerging technologies and industry shifts. However, commercial software can be influenced by vendor priorities, while OSS might favor transparency, collaboration, and open standards.

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The Bottomline

A thoughtful evaluation of one’s project needs and business goals is essential to choosing the right software licensing. Whether you choose open source software or invest in commercial software depends on the unique needs and objectives of your project or organization. It is important to balance considerations such as cost, project goals, license compatibility, target audience, and market trends while selecting the most suitable licensing model. In addition, the desire for customization, the level of community collaboration preferred, transparency needs, budget considerations, and compatibility requirements also help make an informed decision about the choice of software licensing.

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Frequently Asked Questions

Open source software is used to achieve lower starting costs and easy license management. Not only this, it also offers faster project starts, faster iteration, more flexible software development processes, and robust community-driven support.

Yes. Open source software is safe and sometimes more secure than proprietary software. It allows anyone to examine the software and attempt to provide fixes if they discover a vulnerability.

Commercial software cannot be freely modified like OSS, so it is safer. Also, its source code is encrypted, which means users cannot copy or modify it without legal consequences.

Commercial software is used to build products that serve commercial purposes. In other words, it is created to make a profit and can be either proprietary or free.

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