Open Core, Open Perimeter, And the Future of Enterprise Software


This is an inversion of the traditional open core model behind many commercial open source strategies for enterprise application layer products. In open core, the product’s core is open source, and in the enterprise edition, vendors provide and support proprietary enhancements. Using the API approach, the product’s core is often not visible in the cloud, and the only way in and out of the product is through the API.

Because of APIs, we are seeing the differentiation, enhancement, and value in enterprise editions migrating to the perimeter via tools, widgets, and components. These can be closed source and/or open source, but we should see more open source in the perimeter, because many vendors can make money by supporting their core and charging for API calls or transactions. The two best examples of this are Twilio and Stripe.