Open Source or Licensed Software for Your Business?
By CodexierPublished 5 min read
WordPress, WooCommerce, Linux and PostgreSQL are open source. Shopify, Microsoft 365, Fortnox and HubSpot are licensed. Most businesses run a mix without thinking about it. The choice matters when you pick a platform for something central, such as your website, webshop or an internal system, because it decides who is responsible when things break, how much control you have and what the real cost will be over several years. This guide compares the two on licences, support, security and total cost.
What open source means for a business
Open source means the source code is published under a licence that lets anyone use, study, change and share it. For a business the practical consequences are that there is no licence fee, you can move the software to another host or partner, and you can change it to fit. The trade-off is that nobody is contractually obliged to fix it for you unless you pay someone to.
Licence types and obligations
Not all open source licences are the same. For most businesses using software rather than distributing it, obligations are light, but they matter if you build products on top of open source code.
| Licence family | Examples | Main obligation | Business impact |
|---|---|---|---|
| Permissive | MIT, Apache 2.0, BSD | Keep the copyright notice | Few restrictions, even in commercial products |
| Copyleft | GPL | Changes you distribute must be shared under the same licence | Matters if you sell or distribute software built on it |
| Network copyleft | AGPL | Also applies when users access the software over a network | Relevant for SaaS products built on it |
| Open core | Various | Core is open, advanced features are paid | Check which features you actually need |
Simplified. If you build a product for sale on open source components, have the licences reviewed.
Support and responsibility
Open source, self-managed
Community forums and documentation. You are responsible. Works if you have technical staff.
Open source with a partner
An agency or host maintains it under a service agreement. The most common setup for small businesses on WordPress or WooCommerce.
Licensed SaaS
The vendor runs and supports it, within the limits of their terms. You cannot fix problems they will not.
Licensed on-premise
Less common today. You run the software, the vendor supplies updates and support.
Read what the support actually covers. A SaaS vendor's support typically handles the platform, not your configuration, integrations or content. An open source partner's agreement should state response times and what is included.
Security and updates
Open source is not less secure because the code is public; widely used projects are reviewed by many people, and fixes are often published quickly. The risk lies in not applying them. A WordPress site with outdated plugins is vulnerable because nobody updated it, not because it is open source. With SaaS, the vendor applies updates for you, but you depend on their security practices and have little insight into them.
- Open source: plan who updates core, plugins and server software, and how often.
- SaaS: check where data is stored, whether the vendor offers an EU data processing agreement, and how breaches are reported.
- Both: keep your own backups or exports, and use two-factor authentication for admin accounts.
Total cost compared
| Cost item | Open source | Licensed SaaS |
|---|---|---|
| Licence or subscription | Usually none, sometimes paid plugins | Monthly or yearly per user or volume |
| Hosting | You pay a host | Included |
| Updates and security | Your time or a maintenance agreement | Included |
| Customisation | Possible and often cheaper | Limited to what the platform allows |
| Switching later | Easier: code and data are yours | Depends on export options and contract |
Our guide to total cost of ownership for custom software shows how to calculate over several years, and avoiding vendor lock-in covers what to check in either case. If you already run a system that has outgrown its setup, our scaling and system upgrade service helps you decide whether to optimise, migrate or replace it; prices are on our pricing page.
When the choice does not matter much: for standard tools like email, accounting or video calls, pick the licensed service that fits and move on. The open-or-licensed question is worth time only for systems that are central, customised or hard to replace. Book a call if you are facing such a choice.
Frequently asked questions
Is open source software really free?
Free to download and use, but not free to run. Hosting, updates, security and support cost time or money, and that should be part of the comparison.
Is WordPress open source?
Yes. WordPress and WooCommerce are open source under the GPL. Many plugins and themes are sold commercially on top of them.
Can I use open source software in a commercial product?
Usually yes, but the licence decides the conditions. Permissive licences are simple; copyleft licences can require you to share your changes.
Is SaaS safer than self-hosted open source?
Not automatically. SaaS moves the work of updates to the vendor, which helps small teams. Well-maintained open source can be just as secure.
Choosing a platform for something central?
Book 15 minutes. We compare the options for your case on cost, control and who runs it, and tell you which one we would pick.
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