Free, paid or open source? What each really costs

Free of charge, free software, open source, freemium and paid are different properties, and one product can have more than one of them. "Free of charge" is about price, "open source" is about the license, and a paid product is one that asks for money. Every choice also has costs that no price page shows, such as limits, upgrades, time and the risk that the product stops. The video above covers the vocabulary and a decision rule in about 85 seconds; this page adds the detail and the limits.

Five words that get mixed up

"Free of charge" means you pay nothing to get the product. It says nothing about what you may do with it. The Free Software Foundation makes this point directly: free software "is a matter of liberty, not price", and you may have paid for copies of a free program or obtained them at no charge. Its definition lists four freedoms: to run the program, study it, change it, and redistribute copies. The Foundation adds that free software can be commercial.

"Open source" is defined by the Open Source Initiative. The Open Source Definition sets the terms a license must meet: free redistribution, source code included, the right to make and share modified versions, and no discrimination against a person, a group or a field of use, so a business may use the software too. Nearly all open source programs are also free software. The two definitions still start from different values, and the Foundation's own page says that the practical definitions differ.

"Freemium" is a pricing model. A basic version is free, and extra features, capacity or time cost money. Freemium services commonly limit the free version by features, capacity or time.

"Source-available" describes code that can be read, and in some cases modified, without meeting the open source criteria. Source-available software is not necessarily free to use or share, so it sits outside both definitions above.

What "free" costs without a price tag

A free product still costs something, and five costs matter most.

• Limits. Free tiers cut features, storage, devices or records. The password manager ranking notes that Keeper's free plan is limited to one mobile device and 10 records. The note-taking ranking lists Obsidian as a free app with a paid Sync add-on, and Notion as a free plan with paid per-member plans. Find the limit you will hit first, before you start.
• Advertising and data. Freemium services can earn from subscriptions, advertising or purchases, as the freemium definition describes. Read the privacy policy to see what is collected and why, and check whether you can opt out.
• Upgrade pressure. A free version exists partly to lead you to the paid one. Upgrade prompts are part of that model, and they can push a decision made in a hurry.
• Time. Many free tools need setup, hosting or help from a forum. The open-source alternatives roundup makes the same point: for some self-hosted tools the main cost is the work of hosting and maintaining them, not the license fee.
• Discontinuation. Nothing obliges a free service to keep running. Before you depend on one, check how recently the project was updated and whether you can export your data if it closes.

What open source does and does not promise

Open source gives you three real things. You can read the code. You can check it against what the product claims. And if the license allows, other people can carry the project forward, because the definition requires that modified versions can be made and shared. That last point is why open source can lower the risk that a project disappears altogether.

It does not give you safety, upkeep or ease of use. The what is open source software guide makes the same limit: open source is a property of the license, not of the price, and it says nothing by itself about privacy, support or whether a company will keep the project alive. A project may have one volunteer maintainer or a large paid team. Reading code is also a skill most people do not have, so most users benefit through other people's review rather than their own.

What paid products buy, and what they cost

A paid product funds its development, support and hosting through its price. That is the simplest reason to pay: the price keeps the work going.

The trade-off is the renewal. A subscription renews until you cancel, and the price can change at renewal. A one-time license avoids renewals, but the terms decide whether updates continue after the first period. The subscription or one-time purchase lesson compares the two in detail.

How the file archivers ranking shows the difference

The file archivers ranking is a good test case because its products sit in different corners of the table. The product records state the facts directly.

7-Zip is free and open source. Its product record says it is free to use, including in commercial organizations, and that most of its code is under the GNU LGPL license, with some parts under the BSD 3-clause license. It does not create RAR archives, but it unpacks them, so opening a RAR file costs nothing.

WinRAR is a paid commercial product and is not open source. Its record describes a paid commercial license sold by the vendor. Creating RAR archives requires WinRAR, so anyone who needs to create them on Windows should expect to buy a license.

Bandizip sits in between: it is free to download and sells paid editions with advanced features. Free, open source and paid are three separate questions, and each product's listing answers them separately.

Decide by the data and the time you need it

Two questions settle most cases: how important is the data, and how long will you need the tool? Put them on two axes and you get four cases.

• Low importance, short need. A free tier or a trial usually does the job. Test the one feature you need, then stop.
• Low importance, long need. Free or open source is a reasonable choice, provided you can export your data in a format you can open.
• High importance, short need. Read the terms and the export options before you start. A short paid plan can fit, if the export works.
• High importance, long need. Plan for support, renewals and a way out. A paid product with clear support terms, or an open source project with a visible record of updates, can fit, and either one needs a tested export.

Important data needs an exit plan at any price, so check how you would move it out before you rely on the tool. The lock-in and exit costs lesson covers that step, and the fair comparison lesson shows how to set the costs side by side.

Sources

• The Open Source Definition, Open Source Initiative, the ten criteria for open source licenses.
• What is Free Software?, Free Software Foundation, the four freedoms and the difference between free and open source.
• Freemium, Wikipedia, for the definition and the ways free versions are limited.
• Source-available software, Wikipedia, for the definition and its difference from open source.