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open core

Open core is a business model where the foundational software—the "core"—is released under a standard open source license (like Apache 2.0 or MIT) and is free to use, while a layer of value-added features, tools, or hosting services is kept proprietary and monetized.

The Core: The Distribution & Innovation Engine

The "Core" is the open source project. It is not a "loss leader"; it is a massive, decentralized R&D and marketing asset.
  1. Function: It solves a hard technical problem for developers (the "practitioners").
  2. Economic Value: It drives Zero-Marginal Cost Distribution. Instead of paying for expensive outbound sales to get in the door, the software is adopted bottom-up by engineers.
  3. Strategic Asset: It creates a standard. If the Core becomes the de facto way to solve a problem (e.g., Kafka for streaming, Terraform for provisioning), it creates a defensive moat against competitors.

The Crust (or Cloud): The Monetization Engine

Surrounding the Core is the commercial offering—often called the "proprietary crust" or, increasingly, the managed cloud service.
  1. Function: It solves a hard business problem for the enterprise (the "buyers").
  2. Economic Value: It captures value through Enterprise Features (SSO, compliance, audit logs, advanced security) or Operational Convenience (fully managed SaaS, SLAs).
  3. Strategic Asset: It provides the high-margin revenue (ARR) that fuels the continued innovation of the Core.

The "Art" of Open Core: The Boundary Problem

The single greatest challenge in Open Core—and the reason COSSA exists—is defining the boundary between what is free and what is paid.
  1. The Trap: If you put too much value in the paid layer, the open source project becomes "crippleware," and the community revolts or forks the project. If you put too much in the free layer, you destroy your ability to monetize (the "Cloudera problem").
  2. The COSSA Standard: We advocate for a disciplined approach where the Core remains fully functional for a single developer or small team, while the Commercial layer addresses the complexity of scale, collaboration, and governance required by large organizations.


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