In recent history most software companies have functioned as proprietary software firms. A large percentage of their total revenue is generated by selling licenses to use their software. Many Open Source Software business models reject licensing as a major revenue stream, but offer up alternative revenue streams similar to ones used by IBM and ORACLE.

Development Benefits

1. Software Investment Always Equals Zero: Due to the availability of pirated software the short term cost of developing on a proprietary platform is near zero, but as publicity for your project grows the chances that companies like Microsoft will use Intellectual Property treaties to pursue licensing fees may increase the cost of development. Building on an Open Source platform guarantees that the cost of development will never be greater then the price of the hardware used for development and deployment.

2. Decreased Cost of Hardware Investment: Most Open Source Software is built to run efficiently on older hardware. Windows XP will not run effectively on hardware that is more then a year or so old. For many applications developing them on top of hardware as old as an Intel Celeron 500 is perfectly acceptable.

OpenSourceArmenia.com saves you even more money as they already have dedicated servers on which to develop your product. These services will include such benefits similar to those found at Sourceforge.net.

3. Free Resources: Even without much publicity developers have been showing a surprising amount of interest in participating in an open source project. Developing an Open Source community around your product can save you time and development costs as bug fixes, new features, and ideas are communicated to your organization. If your product takes off and you need to hire new developers you can hire them from the community of developers around your project saving you valuable time and money normally spent on training developers about your project.

4. Many Eyes Make Bugs Shallow: Most developers don't like to perform exhaustive QA work on their code, and most organizations don't want to spend the money and the time to test every facet of their product. As your product progresses from prototype to alpha to release you will have a body of testers using your product, not just as developers, but as it would be used in the field. Their lack of knowledge as to the design of your product will cause them to find bugs, non-intuitive APIs, and UI issues that are often missed by developers testing their own code. This allows you to put out a better product in less time.

Marketing Advantages

Companies of all sizes spend an enormous amount of money marketing themselves. For a small company the costs of marketing can use up valuable resources which may be better spent on product development. With an Open Source product you have several marketing advantages.

1. Word of mouth inside the open source community. As you build a group of developers and users, and as these people have good experiences with your product, you build a base of people with deep ties to your software who work for free to have your product deployed. As an example Apache has not spent a dime on advertising, and yet it is the most deployed webserver in the world (and it's numbers are rising as compared to Microsoft's IIS whose numbers have dropped recently)*.

* http://news.netcraft.com

2. Ride the Tide of Open Source Press: Open Source software has been getting more and more attention in the past few years. With big companies like IBM throwing their marketing muscle behind building awareness of Open Source Software, and with governments and businesses looking for ways to reduce their IT budgets without cutting services, there has been a marked increase in interest in Open Source.

3. Code is Forever: For large organizations and governments the advantages of Open Source are natural. They are not tied to the lifecycle of the managing software company, if the company were to go out of business for some reason, they could continue to maintain and build on the software for as long as they desired. This would ease concerns that these organizations may have when it comes to working with a smaller company whose durability to market stresses has not been proven the way that Microsoft or ORACLE's has.

4. Security: Security has become one of the biggest issues facing software users and developers. As any cryptographer will tell you the only way to prove that something is secure is to have the algorithms (or code) open to review. Crackers will find exploits even if you hide the code from them so it is better to have people reviewing your code for these exploits and submitting patches helping to guarantee your software. This guarantee is a huge selling point that will only get bigger in the future.

5. Diaspora Connections: OpenSourceArmenia.com is closely tied to SiliconArmenia.com and both sites aim to increase the visibility of Armenian technical companies and the Diaspora. By developing your software with OpenSourceArmenia.com you can use this free advertising to build some excellent business connections for your organization.

6. AID community: Many countries in the developing world are facing similar development goals. E-Learning and E-Government are two very common projects sponsored by a variety of aid agencies. With a global financial crunch these agencies are looking for good ways to get more done with less. Open Source, with it's reduced development costs, it's ability to allow multiple projects in different countries to work together, and that the existence of the software extends beyond the life of any individual company is an easier sell to these organizations than proprietary development. Large aid organizations like USAID have sponsored reviews of the costs and benefits of supporting Open Source projects. These reviews have been positive and will likely result in more money flowing towards these types of endeavours.

* http://www.usaid.gov/regions/europe_eurasia/cop/ open_source_briefing_slideshow.pdf