AKA: Open SaaS
The open-source software (e.g., a database or blogging system) is hosted by the maintainers and the maintained system has to be paid by users. Often leads to recurring payments for the hosted system, auto-update, prioritized support, or disk usage.
Requires:
- Setup of a payment mechanism (self-build)
- Setup of a hosting platform (the SaaS)
- Setup of a legal entity to sell the premium version (incl. contracts, license(s), etc.)
Variants & Options:
- Monthly payments: Pay for usage per month or year
- Resource payments: Pay for the usage of resources (disk space, memore, cores, ...)
- Single-tenant: Each client has a dedicated system for himself
- Multi-tenant: One system is used by multiple clients
- API: Hosted versions of libraries as APIs (e.g., data processing, data aggregation, web scraping, etc.)
- N/A: Will require an individual hosting platform / website with possibility to pay and configure the system
- RapidAPI (Payment of self-hosted APIs)
| Characteristics | Value | Note |
|---|---|---|
| Effort to set-up | Months | Creation of a legal entity and platform/website |
| Effort to maintain | Medium | Finding new customers will become necessary |
| Cost to set-up | Medium | Will require a lawyer to setup the license and contracts |
| Cost to maintain | Medium | Will cause costs for resources, legal, and tax related stuff (but should be covered by income) |
| One-time Income | N/A | Probably only monthly payments meaningful |
| Recurring Income | Medium | Recurring payments per month or resource |
| Income Predictability | High | Clients want hosted version probably for several years |
| Full income Threshold | 100+ | |
| Recipient | C | |
| Additional Work | Medium | Extra work to develop the SaaS around the OSS |
| Visibility | Low | Easy to overlook by users (esp. if they self-host) |
| Necessity to pay | Low | Might be attractive for companies (e.g., pay for support) |
| Entry Threshold | Low | Credit card is sufficient |
| Countervalue | Hosting | |
| Scalability | Medium | Scales with the number of commercial or non-technical users (who do not want to self-host) |
| Effort for marketing | Medium | The convienience factor will help |
| Competitors | O | Other companies might host the OSS as well |
| Software types | Special | Best for larger software, databases, etc. |
NOTE: External companies might offer similar hosting solutions and become competition.