The Benefits of Open Source Software for Small Businesses

This article was written by Rebecca DiCioccio from PaperForm

Finding the right software for small businesses is one of the most important tasks that any entrepreneur faces. After all, businesses now (more than ever) rely on modern technology. While advanced features were once reserved for established organizations and firms working within the tech sector, increased accessibility for companies and consumers alike has resulted in an explosion of popularity over the past decade. Whether it’s cloud migration or the integration of automated productivity, tech choices will influence virtually every aspect of the venture. Frankly, if your software solutions aren’t aligned with the needs of a modern business, it will spell disaster. Could open source software be the perfect answer for your SME? What benefits does it have for smaller businesses?

Here’s all you need to know.

What is Open Source Software?

In its most basic definition, Open Source defines open source software as “software with source code that anyone can inspect, modify, and enhance”.

To put it another way, open source software is an application or program that is published with a public license, thus enabling a developer to access, edit, and share the code. This subsequently allows developers to improve existing software or use the frameworks to create new applications.

the benefits of open source software

Open source software is a stark contrast to closed-source software, also known as proprietary software, which can only legally be viewed and edited by the owner or license holder.

The history of this type of software is largely linked to the Open Source Initiative (OSI), which was launched by Bruce Perens and Eric Raymond in 1998. Some of the most common licenses include; MIT License, GNU General Public License (GPL) 2.0, Apache License 2.0, GNU General Public License (GPL) 3.0, BSD License 2.0 (3-clause, New or Revised).

Some of the best-known examples are:

  • Mozilla’s Firefox web browser
  • Thunderbird email client
  • PHP scripting language

Why does the Size of the Business Have an Impact on What Software is Used?

Open source software is popular among developers, businesses, and end-users. When running a startup or an SME, there are several key factors to consider:

  • Costs – Every business wants to get value for money, but it is particularly important to avoid financial waste for a small business. It prevents added pressure on sales revenue.
  • Number of Users – Many closed source software solutions have a set subscription price that is only worthwhile when you have a lot of users. So, it’s not suitable for many SMEs.
  • Support – As a small business with limited in-house tech support, it would be the wisest approach to choose software solutions where it will be possible to gain quick answers to any issues that may surface.

Many business owners may not feel it influences anything and will take an “if it does the job, that’s all that matters” approach to finding software agreements. In reality, though, stats show that one-third of a company’s IT budget is dedicated to software licensing with companies often wasting 50% on unnecessary and excessive items. Meanwhile, despite the fact that cyberloafing is a key contributor to the $85bn of annual waste due to lost time, delays caused by software are a significant feature too.

So in short: if the right choices aren’t made, the business will waste both time and money.

The Benefits of Open Source Software for Small Businesses

Open-source software is often referred to as free software. Many businesses worry because anything free is too good to be true, or deemed to be inferior. However, the term free relates to the fact that developers have the freedom to use and edit the source code.

open source software benefits

There are several potential open-source software benefits to be gained from using this type of licensing for small businesses.

Lower Set up and Ownership Costs

The harsh reality of modern business is that two-thirds of all new SMEs fail to make it past 10 years in business. Every decision must, therefore, be a financial one, especially when it has a huge level of influence.

When looking at closed source software solutions, most packages are either commercial “freemium plans” or monthly subscription services. The former can be very frustrating as the most significant features are locked behind paywalls, which means you’ll pay more in the long run. This makes them an unsuitable choice for SMEs working on a tight budget or with a desire to know exactly what will be spent on software.

Open-source software is often available for free, meaning there are no initial download or installation costs, while all features are there. While some open source packages do charge a subscription fee, it is usually more affordable and delivers better overall value for money.

Reliability and Security

In today’s digital climate, the need for robust security is clear. After all, over 80% of companies have been impacted by at least one successful cyberattack.

While the public nature of open source software may cause many business owners to fear the worst, it is actually one of the most reliable and secure options. This is because the source code is viewed, tested, and modified by thousands of developers. In turn, users will quickly identify any bugs or vulnerabilities. Despite the fact that hackers can access the source code too, any attempts they make are quickly thwarted by the network of workers.

Due to the heightened security measures provided by the developer network, businesses can also enjoy reduced downtime as there will be a decreased need for virus checking or dealing with data loss and related issues.

Security is for sure a priority as data leaks and cyberattacks will harm the company’s reputation with customers while also running the risk of fines. However, the fact that developers are on hand to fix bugs (often before they even become known to business users like you) improves the efficiency and effectiveness of all software and related tasks.

Sustainability and Support

Strategic IT is accepted as an enabler by over four in five businesses. Unfortunately, many closed software solutions do not evolve at a rate that reflects the changing landscape of business needs, tech opportunities, and consumer demands.

open source software support

Open-source software is constantly evolving as the network of developers is constantly analyzing the source code and frameworks to raise the bar of possibility. Therefore, any tools used under this type of software solution and agreement should offer sustainability. So, there is no need to keep changing programs or Apps as the OSS community continually listens to the needs of businesses to ensure that applications deliver everything companies need.

It’s beneficial for all businesses, but SMEs stand to achieve even greater rewards. When companies do not have huge on-site IT and development teams, the care offered by a network of developers makes it the secret weapon to maintaining smooth operations at all times. Furthermore, thanks to the continually evolving situations, businesses can work with confidence at knowing the very best protocols are in place.

On a side note, OSS developers are now increasingly open to running free training courses for users and businesses. This is usually completed via online guides and training, meaning workforces can develop new skills and increased understanding in a convenient, cost-effective, and comprehensive manner.

Flexibility and Freedom

It is shown that B2B digital leaders yield five times the revenue growth of other companies in the same fields. The flexibility of open source software enables companies to stay ahead of the game at all times and enjoy the benefits of tailored solutions.

open source software sustainability

Commercial closed software is essentially an off-the-shelf solution. It will include a predetermined set of features, tools, and capabilities. So, if the program does not provide the capabilities that the company desires, very little can be done to change it. Worse still, a contracted agreement means businesses either have to write off the loss or persist with an inadequate solution.

Conversely, OSS developers can alter the source code to develop additional features that offer bespoke applications, even for small businesses that wouldn’t have the funds to have a personalized tool made from scratch. Moreover, affordability means that businesses can find an alternative solution if their current open source software does not provide the desired attributes.

Furthermore, OSS users avoid the threat of a vendor or proprietor removing a feature or tool. The declaration of freedom of open source software protects users by offering transparency while the public nature of the source code means other developers can replicate anything that is removed with ease.


Any business that wants to unlock its full potential must choose the right software solutions to gain maximized productivity, cost-efficiency, and consistency across the company. While there is no doubt that some applications will fall under the category of proprietary software, a focus on open source software will deliver a wealth of benefits for SMEs.

It is more affordable, reliable, agile, and customizable while the opportunity to get bespoke programs should not be ignored either. When supported by a network of developers and support teams, it’s not just a great way to build better infrastructure. It will enable your SME to maintain a positive setup too.

Recommended Read: 


Subscribe to our newsletter to receive insights & events

    Related Articles