When is open sourcing a threat to business?

Question

As I understand the answer to the question How can free and open source projects be monetized?, the only time open sourcing is not a threat to business is when you dominate the market. Is that correct? If so, then why don't monopolies like Google, Amazon, Facebook, etc. go fully open source? Those companies don't do that on their main products, but there are various other products that they do. Or is the only explanation that it is a way to build their brands and communities? There is no reason for them to not keep them closed for monetization.

The answer also doesn't explain why companies that open-source their main products afford to do so. For example those with open-core model. Are they confident that they have dominated the markets?

Overall, I think the question "When is open sourcing a threat to business" is better than "How or why to monetize open source". The "when" question not only requires explaining reasons or methods to monetize, but also implies that they may change depending on the situation, and pushes us to explain when those changes in the situation happen.

I think your first paragraph needs a rework. Many non-dominant companies can and do open source some parts of their software so long as that software is not core to their business - for example LG open source FOSSLight without that being a threat to their business. — Philip Kendall, Nov 26 '23 at 21:40
Well, it's to check whether my understanding of the answer is correct. I myself isn't fully convinced to that understanding. That's why I ask this question. So it's no surprise if there are counter-evidences on it — Ooker, Nov 27 '23 at 16:48
As the asker of the original question ( ;) ), this is a great question since it also explores the landscape of competitors who will want to hinder your success in your own monetization endeavors and understanding your competition is necessary to finding your own voice and audience that will be able to help sustain your project. Of course it's difficult to have one single answer that works all the time, but questions like these are excellent starting points to researching how your own business should become. — Unihedron, Nov 29 '23 at 20:51

score 5 · Accepted Answer · edited Nov 28 '23 at 18:04

The short answer to "when is open sourcing a threat to business" is that it is a threat when it allows competitors an easier and cheaper path into the market. Making things that you don't expect/want to make money off open source is not a threat to your business.

I can see several major reasons for a business to provide open-source technology.

Because they can't avoid it. If they used third-party code under a strong copyleft license, like the GPL, the license obligates them to make their code open-source as well. Similarly, the HTML code of a website or portal which is anyhow visible to everyone (can't avoid it), and it usually is not your company's core IP (your secret sauce), you might as well publish it under an open-source license without suffering any downsides as compared to publishing it with 'all rights reserved'.
To create goodwill among the open-source community. I believe this is the case when a company offers some tooling or a fringe library they developed in-house. Those things are typically not critical for what is generating the money for the company, so it doesn't matter if a potential competitor gets them cheap.
To create brand recognition and increase market share. I would put most dual-license and open-core offerings under this one. You see this mostly in the areas of libraries and service offerings. The idea is that projects start small and can use the open-source version. But as the project grows and people want to start making money with it, they would need to switch to the (extended) paid version.
And the market-share side is that if the majority of hobby programmers are familiar with your product, then they might convince the buyers of the companies they join also to buy your product.
Because your business model is designed around offering service on a product. This applies mostly to companies that re-distribute an already open-source product and make their money from services they offer in relation to the product.
It may be required by the market. For example if you want to sell hardware (components, such as ICs) into an ecosystem which is based on Linux (GPLv2) such as Android, then you might be forced to provide your drivers and software stack under a compatible Open Source license, because otherwise the kernel cannot be compiled to communicate with your hardware (and eventually you will not sell your ICs).

Regarding 3, why aren't open-core or dual-license easier and cheaper paths for competitors to enter the market? Assuming they don't use strong copy left licenses — Ooker, Nov 27 '23 at 16:57
@Ooker, with open-core, the real money makers for a business (that what differentiates you from potential competitors) are not in the core but in the non-free add-ons. Dual-license business indeed only works with a copyleft open-source license (Qt makes it work with a weak copyleft license for the most part). — Bart van Ingen Schenau, Nov 28 '23 at 08:34
I open a separate question here: Why aren't open-core model easier and cheaper paths for competitors to enter the market? — Ooker, Nov 29 '23 at 16:01
#3 is the same reason why Microsoft has no incentive going after small-scale piracy of their products. They want kids, students, and hobbyists to be familiar with their products, so that when they come into a decision-making position, they will choose what they already know. — Jörg W Mittag, Dec 09 '23 at 22:14

When is open sourcing a threat to business?

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