OCV companies build commercial open source software (COSS) based on open source projects. The open source core will always be free and open to the community.
Buyer-based open core pricing models tend to have three paid tiers with a large price difference between the tiers.
Managers / Directors
Price / Unit / Month
Free (Open Source)
Pricing is the same regardless of how the application is hosted.
See additional pricing considerations here.
COSS companies face the risk of service-wrapping by the hyper clouds. Ways to manage this risk include developing application software and adopting a buyer-based pricing model.
Infrastructure software What the application software is built on top of (MongoDB, Confluent, Redis)
Application Software The top-level application that people interact with (Wordpress, GitLab)
Fork & Commoditize Resistance
Application Programming Interface (API)
Graphical User Interface (GUI)
GUI is more complex to replicate than API
Hyper clouds are better at running single-tenant software
Needs lots of compute power
Needs little compute power
Hyper clouds are in the business of selling compute and storage. Applicaiton software tends to drive less compute.