Open Source vs Proprietary Contract Management Software

There's no doubt there are clear benefits to replacing manual contract management processes with dedicated software. But deciding to switch to contract lifecycle management software is only the first step to realizing these benefits. You must determine whether you should use open-source software or purchase a proprietary solution.

How can you determine which will best serve your needs? Keep reading to understand the differences between these two software options and the considerations that can help you decide.

Open source contract management software vs. proprietary: What’s the difference?

Before you can evaluate these two different types of software, it’s important to have a clear understanding on what each is and how they differ on considerations such as cost, ease of use and other factors.

Open source software is a platform you configure yourself using publicly-available source code. A propriety solution, meanwhile, is software that has been developed by a commercial vendor who retains ownership and control of the source code and licenses it out to customers.

Here’s how the two compare on a number of important business considerations:

1. Cost

Though open source software is often thought of as free, that’s not entirely the case. Though the source code upon which this software is built is usually available for no charge, open source software typically requires more internal configuration and IT knowledge to set up. Because you aren’t paying for support, open source software also typically requires you to draw on your own IT resources as issues, such as security patching, arise. This means that you must dedicate some internal IT resources or hire a consultant to deploy and maintain your software, and should consider the cost of this in your evaluation.

For proprietary software solutions, customers typically pay a set licensing fee. For installed software, this fee may be charged on a one-time basis per license (i.e., per device) or it may involve ongoing subscription fees for cloud or SaaS (software as a service) solutions. Licensing fees vary from product to product, and may be a flat rate —with all data and unlimited user access included — or a la carte. While cloud solutions typically include updates and product improvements within their fees, you may need to pay to upgrade installed software as new versions become available over time.

2. Software Features

One of the best things about open source software is that it is entirely customizable. Though it is based upon specific source code, that’s just a starting point; skilled developers can modify the software as they wish. This means so long as you have the resources, your solution can be tailored to your unique needs.

With proprietary CLM software, you are limited to the functionalities and features of the platform you select – and offerings can vary from software solution to software solution. As such, it’s helpful to develop a list of must-have and nice-to-have functionalities before you start looking in order to find the solution that best fits your needs.

3. Software Installation and Maintenance

While proprietary software is typically ready to use out of the box, open source software usually requires more work to install and maintain. Think of the source code as a foundation that must be configured for your system and company needs before you can use it. And while open source software typically draws on a large community of users to identify and fix bugs and share improvements and support tips, this must all be administered by your IT department or consultants.

There are typically fewer barriers to use for proprietary software. In the case of cloud software, set up can be as simple as logging onto a website, while upgrades, security patches, and other maintenance requirements may be deployed by the software vendor, requiring little or no effort on your end.

4. Security

The customizable nature of open source software means your developers can add features to enhance security as needed. However, because open source software is available to everyone – including hackers – it may be more vulnerable to targeted attacks.

When it comes to proprietary software and security, as with other features, what you see is what you get. This means you are limited to whatever security enhancements are included or available as upgrades with your solution. Some important security features to look for include access controls, such as multi-factor authentication and permissions management, audit trail reporting, which logs all logins and activity, as well as enterprise-grade encryption.

So how do you find the best fit?

The best contract management software solutions eliminate challenges such as contract inconsistencies while also allowing for faster and more profitable contract negotiations. When trying to decide between open source and proprietary contract management software, the final decision comes down to your needs and tech resources. While some businesses place a higher priority on the need for a flexible and fully-customized solution, this requires skilled IT who can deploy and maintain your software and support user needs. With the robust features available in proprietary solutions, many businesses find their contract management needs can be met without taking on the IT burden of an open source solution.