Open source-based startups

Business environment is an ever-changing, dynamic entity – more so when the concerned business is computer-based technology. If a competitor launches a new technology in the market, it is advisable to launch a similar or new technology as early as possible so that the former does not get the benefits of first-mover advantage for long. It is indeed necessary to be flexible and competitive with the changing business environment, even if it means taking other company’s help. Otherwise, the business will disintegrate.

In order to create new product/service and remain competitive with other firms, a firm needs to invest time, money and efforts to develop it. This can be very costly and loss-incurring strategy as there is no guarantee whether the new product will be successful . With globalisation, small companies are coming up which use software technology familiar and available to all the people in the world. These softwares are called open source softwares and the small companies using them for their business are called open source-based startups.

Open source softwares are free softwares. Start-up companies which emerge from the application of these softwares use it for their specific needs and provide services to customers at cheaper costs. The same service would cost a lot if it was provided by companies like Microsoft, Apple, IBM etc. Moreover, with time the software gets developed by inputs from developers around the world and the service quality provided by the startup improves. Open source-based startup is a powerful and competitive business strategy and entrepreneurs have found great success in it. They offer business support, help install a product and provide other features to customers. These startups find it easier to sell their products/services to developers and customers, which is done simultaneously as the interested parties can download it anytime.

A recent trend started is that big corporates in IT and electronic industry are sponsoring these startups because the sponsoror is familiar with the software technology, but want others to do it in order to reduce time and efforts in their own research and development. In 2014, venture capitalists made 37 investments in open source-based startups. Big players like Facebook, Microsoft and Apple too are sponsoring these startups which are mushrooming at a decent pace.

Open source-based startups are here to stay and the trend of sponsoring them doesn’t look to slow down in the near future.

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