How Startups Can Use Open Source to Compete With the Tech Giants

by Sandra Petrova

6 min read · May 17, 2019

Some of the most significant tech inventions that inspired the scientific curiosity of today are the invention of the Wi-Fi, social networking, GPS, and Internet of Things, among other things. Luckily, we live in a digital era where people could have shared their creations and receive recognition for their work. Imagine how many inventions have gone unnoticed and didn’t even get created simply because people couldn’t collaborate and share their ideas with the rest of the world?

Today, scientists and engineers around the world benefit from the advances in technology and from a global network that enables the sharing of ideas. In the last few years, we have been witnessing the growing popularity of open source software across all industries. From retail and FinTech to web development and Big Data, open source software is everywhere. There has been an increasing adoption of open source software in services and products and a large-scale growth in open source contributions.

Startups have been taking advantage of open source as a way to compete with the big guys that have millions of dollars at hand to spend on experimenting and developing. In fact, it’s almost impossible to find a tech startup that doesn’t rely to some extent on open source code to develop its product.

If you’re interested in finding out how startups are using open source software to compete with the big players, you’re in luck! We’ve gathered some data and discovered how startups are surviving in this cut-throat tech scene.

Reduce Your Software Development Costs

Have you ever wondered how small tech startups have managed to survive alongside giants like Microsoft, Apple, and Google? One of the most important benefits of using open source software is lower software development costs. According to Linux, users save up to 55% over commercial solutions.

Instead of investing an ample amount of money into writing code in-house, you can simply use the open source code to develop your service or product. Then, you can modify and extend the open source code with the help of experienced developers to meet your unique requirements. You’ll create a service/product that meets your business requirements at reduced costs and in much shorter time frames.

Redirect your budget to creating a business strategy and getting to market more quickly. Getting to market more quickly is crucial when competing with the tech giants. But now you’ll get a competitive advantage and a chance to launch to market ahead of schedule.

You can take advantage of evolving technologies more rapidly and launch new releases quickly. Meaning, you’ll provide your users with the latest features as soon as they become available.

What’s more, by using open source software instead of proprietary, you’ll be saving thousands of dollars. There’ll be no need to pay additional fees for support costs. Proprietary software can cost you a fortune and drain your resources over a yearly subscription. Even if it comes with a licensing fee and it’s not entirely free of charge, open source code still tends to be far cheaper than closed source software.

To compete with the big players, you’ll need to invest money on user training, custom software development, and support. The money you’ll save with the open source software can easily be invested in these areas.

open source software

Innovate Faster

Someone wise once said that there’s no such thing as a new idea. It’s impossible. But what’s possible is to take a lot of old ideas and arrange them in a mental kaleidoscope. You keep on turning and making new combinations until you come up with something innovative.

There’s no doubt that innovation is one of the most important components of a successful company. You might be a small startup, but if you innovate, you can manage to grow your business. In this highly competitive market, the only way to stay relevant is through constant innovation.

Innovation can be difficult, especially if it’s closed. But the key to competing with the big players is embracing open and collaborative innovation across company walls. People call it open innovation. As luck would have it, open source communities value and practice open innovation. Working in open source can be a practical way of delivering innovation to your users.

You can take advantage of open source projects to speed up the dynamism and creativity your company needs in order to thrive and grow. At the heart of innovation lies value creation, and open source can get you there. Instead of having experts working on a solution in-house, you can have experts from both within and outside your company collaborating easily to create something of value.

Build Collaboratively

The essence of open source is collaborative building. It fosters collaboration, co-creation, and community. Startups get to collaborate openly and partner with other companies on projects.

Let’s say that you’re working on a billing software that handles ACH payments. This is something many companies struggle with as it’s very complicated to get it right. Scare documentation and limited resources online are some of the reasons.

But what if you open the code? What will happen?

Making your solution open source will give you the chance to collaborate with other companies that struggle with the same issue. This time, instead of only having a few brains from your company working on the problem, you’ll have many developers from inside and outside your company working to solve the problem. The solution will be tested and developed much faster. You’ll share the risk and investment of value creation.

In the end, you won’t be open sourcing your entire product, but only pieces of it. This allows you to keep the competitive edge with the unique pieces of your product and save time and resources by collaboratively building the rest of it.


As more and more open source software appears, and more startups build their solutions on top of it, the interconnections between software will expand and improve together. Think of it as a web of connected tools that are continually upgrading and going in unexpected directions.

Open source hasn’t only revolutionized the software industry, but it also changed the way we think about collaboration. Its growing popularity is only proof of the power of the model. And a reminder that software, just like everything else, is better when it’s shared!

To sum up, your startup can successfully compete with the big players thanks to open source and this is how:

  • Take advantage of open source code to reduce your software development costs. Instead of spending thousands of dollars of developing your tech solution in-house, you can simply use one that is already available as open source and customize it to fit your needs.
  • Use and tweak an open source project and come up with an innovative solution for your industry.
  • Don’t hesitate to collaborate openly and partner with other companies on projects. Together, you can create stable, high-quality software that has a vast open source community guarding its back.