Open Source vs Licensed Software

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When choosing software solutions, you’ll find yourself facing a rather intimidating choice: do you choose the more traditional licensed software? Or is it about time you dip your toes into the uncharted waters of open source?

This question is often framed as a war between open source evangelists and commercial users. However, there’s actually no right or wrong answer to the question of which solution is better. As there are distinct benefits and disadvantages of both open source and licensed software, your choice should be the one that suits your organisation the best.

In order to help you understand the differences, we’ve put together this little e-guide explaining the pros and cons of licensed software vs open source. Let’s lift the fog once and for all, shall we?

What is Open Source?

First things first, you might say, what on earth is open source?

Essentially, an open-source solution is a software distributed under a licensing agreement which permits the code to be shared and edited by other parties. This means that anyone who knows how can use and modify open-source software completely free of charge.

Wait, what?

Yes, you read that correctly: open-source software is available for anyone to use and modify from its original design – for free. As a result, the software can evolve due to the many alterations of developers from around the world. And, often, it gets to the point where the final form is virtually unrecognisable from the original software. The benefit of open source is that this model produces an increasingly more diverse scope of design perspectives than a single company would ever be able to foster and sustain long-term. In other words, this is the perfect choice for anyone valuing innovation.

However, it can also leave users vulnerable to hackers.

Today, we have an organisation called the Open Source Initiative, which works to promote open-source software. Since its start in 1998, they have approved more than 80 open source licenses worldwide. Interestingly, these licenses tend to fall into one of these categories: permissive licenses and copyleft licenses.

The most basic type of open source license is the permissive license. With this one, you can do whatever you want with the software as long as you follow the general requirements, which are often phrased like this:

  • You can do whatever you want with the code
  • You must acknowledge the author
  • However, you use it at your own risk

On the other hand, you have copyleft licenses. In addition to the requirements of a permissive license, they also require that you:

  • Don’t place any additional restrictions on the licensee’s exercise of the license
  • Make the source code for any binaries available
  • The source code must be open and available under the same terms as which you got the code

What is Licensed Software?

Licensed software, on the other hand, is proprietary software distributed under a licensing agreement to authorised users only.

In other words, it’s the complete opposite of open source, as the source code is not to be shared with the public for anyone to look at or modify.

Businesses are often defensive of their product and eager to preserve control of their brand, and the licensing agreements allow them to do this. Naturally, licensed software is the perfect opportunity for those looking for low-security risks, as dedicated developers are the only ones allowed to contribute to the software’s code.

Main differences between Open Source and Licensed Software


Even though open-source software is technically free, there are long term costs associated with it such as implementation, innovation, support, and investing in the appropriate infrastructure as your organisation progresses, technology evolves, and your requirements grow.

Additionally, it’s becoming more common for open software providers to charge extra for add-ons, integration, and additional services. This can, in some instances, undo any cost-saving advantages you might have enjoyed.

The cost of licensed software, on the other hand, can vary considerably depending on the complexity of the solution you want. This can include a base fee for the software, integration, services and annual licensing fees. Though the hard cost can be higher, it’s important to remember that you pay for a more customised product from a reliable name. Additionally, you’ll also benefit from:

  • Improved security
  • Improved functionality
  • Continuous innovation
  • Greater scalability
  • Ongoing training and support
  • Lower requirement for technical skills


In order to evolve, open-source software depends on a loyal and engaged online community providing support through forums and blogs.

Naturally, the response time of these communities is slower than dedicated support teams from well-known brands. This means that questions may go unanswered for some time, as there may not necessarily be any experts on hand. Additionally, there’s no incentive for these communities to help – except for wanting to be cooperative.

The biggest advantage of licensed software is ongoing support, which can be imperative if you’re a user without much technical skill. This support can include user manuals and points of contact for immediate assistance from experts who are closely acquainted with the product or service.


As open-source software isn’t developed in a controlled environment, we find that security is often a concern for many.

As the developers are situated all around the world, there is often a lack of continuity and shared direction that can counteract effective communication and collaboration. Additionally, as the software isn’t always peer-reviewed or validated, a developer could potentially implant a backdoor Trojan into the software without the user being aware of it.

Naturally, this scares many off.

In comparison, licensed software tends to be perceived as the more secure option.

Unlike open-source software, a licensed solution is developed in a controlled environment by a focused team. This team of dedicated developers are the only people who can view or edit the source code, meaning that the product is heavily audited and the risk of backdoor Trojans is considerably diminished.


As open-source software tends to accommodate the needs of developers rather than the majority of layperson users, the convenience and practicality of open source are frequently criticised.

Often, there are no user guides or manuals – as they are not a legal requirement – and when they are written, they tend to be written strictly for other developers. In other words, they’re not written with the less technically experienced users in mind.

Expert usability testing has enabled licensed software to be more practical for a wider audience. User manuals are usually on hand for instant reference and swift training, and support services ensure that issues are solved quickly. Do you want to learn more about open-source software? Find our article on Open Source Advantages right here.

How to choose between open source and licensed software?

The pros and cons of open source and licensed software largely depend on your team’s technical expertise – and the IT resources you have available.

Additionally, your choice will also depend on the needs and requirements of your business. Does the usefulness of a system which is completely free of cost, outweigh the running costs, security risks and lack of support that comes with it? If so, then it would be in your interest to join the growing trend of open-source software.

If you, on the other hand, are part of a large business with security concerns and a need for quick support, then you may be better suited to licensed software.

Your Needs. YourShortlist.

As a key decision-maker, you’ll have to do your research before choosing the best software for your business.

At YourShortlist, our goal is to make technology procurement simple, transparent, and cost-effective by matching businesses with the right software providers.

We’re all about helping our members understand, choose, and implement the solutions that will facilitate successful growth. We manage a diverse database of over 700 software partners providing solutions in ERP, CRM, cyber security, cloud migration, HR, and more.

With the help of Your Shortlist, IT buyers across the globe have made better-informed decisions on new software, infrastructure, and managed services to improve their business.

Our non-chargeable service includes:

  • Independent buying advice on the best software solutions and providers on the market
  • A bespoke shortlist of specially selected partners experienced in implementing software for your industry
  • Partner background information
  • Free call-backs from partners with no obligation to purchase

If you’re on the hunt for new software, discuss your requirements with a member of our team.