6. 3. 2  Free software production

In general, if the developed application is successful among potential customers, we can obtain advantages in the attraction of improvements and complements, the sympathy of the audience and community, and lower maintenance costs due to the participation of the community.

By contrast, it can be difficult in free software development to recover the initial investment, which can sometimes be quite substantial. While it is a common problem in both free and proprietary software, it is more difficult to sell copies of free software than other models.

Mixed models

The duality of mixed models (usually a public and a commercial version) favours the adoption and diffusion of the application but has some drawbacks too, such as the limited involvement of the community in the business aims or the need to maintain an interesting commercial product over time.

This latter aspect may generate other problems if the company's management of the user community is inadequate. For example, the community may develop the proprietary extensions to the commercial version by itself – and publicly.

Software and services

For the provision of services associated with a free application, it is possible to develop coopetition strategies to expand the target market, subsequently segmenting through differentiation. If coopetition strategies cannot be established, the model offers few barriers to entry for competitors which, given their access to the source code, can equip themselves with the necessary infrastructure to compete as they would on traditional markets.

Moreover, obtaining a substantial income solely from related services can be difficult in markets with a strong presence of innovators and technology enthusiasts.