Slowing Economy Will Spur Software Transition from Open Core to Open Source

Economic uncertainty is putting an increased focus on cost-conscious software decision-making without sacrificing the capabilities required for growth.


Selecting tools that can accelerate software and application development boils down to a relatively simple checklist:

  Does the technology offer competitive advantages that will help us scale?
  Will it withstand the pressures of scalability, reliability, and performance requirements during our growth?
  Is it a sound investment from a budget perspective?

That last question is top of mind for many, many more organizations right now. The current economic uncertainty is likely to continue well into 2023, putting an increased focus on cost-conscious software decision-making…but ideally doing so without sacrificing the capabilities required for growth. Enter open source — true open source.

There’s been a recent sea change toward accelerating open-source adoption that’s been happening in nascent businesses all the way through the enterprise (including more open-source software coming into production environments across the world’s biggest, most data-hungry organizations). This shift, coinciding with the rise of particularly powerful open-source technologies like Apache Cassandra, Apache Kafka, Redis, and others, has firmly cast free-to-use, community-supported technologies as software development’s future. As organizations batten down their budgets to weather the uncertain economic tides ahead, those who have not yet capitalized on this trend will be giving open-source tools a fresh look up and down their stack.

The focus right now on make-it-last budgeting and avoiding the expenditures of proprietary solutions should also help businesses avoid some pitfalls adjacent to the open-source technology landscape. Open core vendors practice a clever deception, taking popular existing open source projects, repackaging them with their own proprietary additions and support, and advertising them as “open source” even though they are, in fact, proprietary and carry the hefty licensing fees that come with that.

These software vendors have two things going for them. The first is a psychological factor: like most people, software decision-makers are prone to believe that the more they pay for something, the more value it has. Because the reality that free, 100% open source technologies are plenty ready for even the most demanding enterprise workloads is counterintuitive, open core vendors’ claims that their costly alternatives are superior seem to make sense. These vendors’ second advantage is positioning their solutions as being as equally portable as true open-source alternatives, which is almost never the case.

Open core vendors will keep customers believing these falsehoods until the day they try to leave and take their code with them. Suddenly, businesses come to realize that they’re confined by severe vendor and technical lock-in. Their code isn’t portable at all, meaning they’ll need to start from scratch if they choose to end the vendor relationship. In many cases, enterprises don’t even own their own code. All this is by design, with open-core vendors hiding the true nature of their proprietary offerings as a key component of their business model.

Thankfully, that business model is dying out, as it should. Businesses were already becoming increasingly savvy to open core ploys before current economic strains set in. Looking ahead to 2023, expect cost-conscious teams to ramp up their adoption of 100% open-source software development tools in order to achieve continued business growth on tighter budgets while successfully sidestepping the high costs and lock-in of open core traps.


Anil is the VP & Head of Data Solutions at Instaclustr, which provides a managed platform for open source data-layer and developer workflow technologies. Anil has 20+ years of experience in data and analytics roles. Joining Instaclustr in 2019, he works with organizations to drive successful data-centric digital transformations via the right cultural, operational, architectural, and technological roadmaps. Prior to Instaclustr, he held data & analytics leadership roles at Dell EMC, Accenture, and Visa, among others. Anil lives and works in the Bay Area.