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Open source is more than free: The Untangle experience

Untangle has grown its sales 300 percent by giving software away under an open-source license. Why wouldn't you do the same?

I've been saying for some time that open source is not a price tag, or at least is much more than that. In criticizing Oracle's "lite"/express approach to competing with MySQL years ago, I insisted that "free, as in price, is just one part of the open source puzzle. But it's not necessarily the most important one."

I stand by that claim, and received confirmation from Untangle this week.

Untangle is an open-source network gateway company. It started out as a proprietary software company, but turned to open source for growth. This doesn't always work well for companies, largely because many get the model and/or culture wrong.

Untangle, however, has done it right, and the downloads have followed. From 145 in June of 2007 to 41,419 in April of 2008, interest in Untangle has rocketed with its adoption of open-source licensing.

Is this just because its code is free now, and not because it's open source? A quick look at the data suggests that "free" isn't selling Untangle. Open source is.

First off, consider that Untangle already offered a free download of (proprietary) software for trial purposes and also sold appliances with their network gateway software already installed and configured. Though the company leveraged open source in its code base (some 30 projects) to get to a finished product faster, it didn't release its code under an open-source license.

In other words, it was already using "free" (as in price) software as part of its model, both to entice would-be buyers and to improve its development. But it needed more than a great product: It also needed to more efficiently find new buyers for that product.

Enter open source.

In June of 2007, five years after the company started development and two years after it started to sell its product, Untangle open sourced the vast majority of its software. Here's what happened:

Untangle's active deployments skyrocket with open source Untangle

The graph shows the POPS or activations of live instances of Untangle's gateway servers running each month. These are real deployments: The blue line represents boxed appliance sales that have gone live. Meaning money coming in the door. Lots and lots of money.

How much? 300 percent over the bad old days of proprietary.

Free proprietary is only marginally better than expensive proprietary. Open source makes for a better way to distribute software. Period. You can take that to the bank. Just like Untangle did.