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Companies like Confluent, Redis Labs, and Elastic offer open source software that’s free to use.
But after Amazon Web Services started competing with them by selling their software as a cloud service, they changed their licenses to restrict how their software is used. They banned selling their software as a service.
Now a bunch of software companies are going the other direction. This year, Chef, Cloudera, and Gigabyte are making their software more open and modeling their business after Red Hat.
Experts say in general, startups may still be worried about the threat of cloud providers and will continue experimenting with their business models.
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Increasingly, companies that built their business around free software are facing competitive pressure from Amazon.

These companies, like MongoDB, Redis Labs, Confluent, and Elastic, have built their business around open source software — or software that’s free for anyone to use and modify. They give the basic software away for free and make their money by either offering extra enterprise features and/or offering support and services to paying customers.

Giving their software away for free helps them with development. Their community of users create new features and fix bugs.

But cloud providers like Amazon and Alibaba often take those free versions and sell them as a cloud service, competing directly with the software vendors. The big cloud players are also often accused of not contributing much back to the free software versions, not sharing their tweaks and upgrades with the whole community.

While this is completely legal, competing with Amazon is a hard position for smaller, open source software companies. In response, some of them added restrictions to how their software can be used, basically forbidding users of the free versions …read more

Source:: Business Insider


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