The author is speaking to the differences between the open core and open source business models. I've been writing increasingly about the differences between these models on my Medium blog about WSO2's growth story, our thoughts on the MULE acquisition by CRM (another open core vendor), and our open source business model.
WSO2 is a pure open source business model and we believe that it's more honest, efficient, and scalable. Also, if executed in the right manner, there is no risk from IP exploitation. We have been able to demonstrate that as we are growing on an ARR basis faster than MULE with an equal customer net dollar retention with negative churn, while getting to cash flow positive operations.
Our biggest rationale on why this is the case is that our internal teams do not compromise productivity by perpetually wrestling with where the “for free/for pay” line must be drawn. It is expensive for an enterprise vendor to determine the best model of where for-fee options reside. Not only does the vendor have to develop a strategy, but they must communicate this to all their employees and then justify it to the open market. This is evidenced in this thread and in the many HN threads for Gitlab - their management team has to invest time and energy into explaining the philosophy that was used to establish the line. It's rarely intuitive, so some non-zero effort goes into that education internally and externally.
These costs are passed along to customers and require significantly higher forms of capital from investors. This line does not stay static, either. The nature of open source is that is erodes and impedes upon the areas where a vendor is selling their proprietary extensions. This means the “for free/for pay” line must be periodically rethought. This is a continual process, and this is time where inefficiencies are introduced.
In the pure open source model, we just tell our developers to design and build. And we can focus on a single pricing solution of value in and around that overall platform. It saves us a lot of emotional capital, too, because people get very committed on where they think the free / for pay line must be drawn.
Finally, it lets us be more up front with customers. They know that our sales reps have nothing to gain by suggesting one tech stack over another. Customers can use the entire stack before they talk to us and so if they are really engaged, then we are engaged for a value added subscription for all of the right reasons, and we don't have to lengthen the sales cycle while they try to decide which route they want to take - open source or proprietary.
[1] https://blog.usejournal.com/wso2s-growth-story-and-why-open-...
[2] https://blog.usejournal.com/salesforces-acquisition-of-mules...
[3] https://blog.usejournal.com/wso2s-open-source-business-model...