Along with “community” one of the most widely used and misused terms in the world of free and open source software is “commercial”. Depending on who you are talking to, and the context in which they are talking, it could be used to mean proprietary software, or companies that are for-profit, or VC-backed, or make use of open core, dual licensing or subscription business strategies (or any combination of the above).

Earlier this week I had the chance to speak with representatives from OpenGeo, which is one company that is attempting to demonstrate that non-profit and non-commercial are not the same thing.

OpenGeo president, Chris Holmes and senior consultant, Paul Ramsey, explained how the company is a social enterprise that aims to combine commercial support for geospatial software and non-profit motives in a way that benefit both its employees and society at large.

OpenGeo was formally launched in 2008 as the geospatial software division of The Open Planning Project (TOPP) a non-profit urban planning organization founded in 1999 by social entrepreneur Mark Gorton, also known for the LimeWire peer-to-peer file sharing software, the Lime Brokerage stock brokerage, the Tower Research Capital hedge fund, and the LimeMedical medical software company.

In January OpenGeo released version 1.0 of the OpenGeo Suite, which includes the GeoServer geospatial data and map server, the GeoWebCache map accelerator; PostGIS, the spatial database extension to PostgreSQL; the OpenLayers and GeoExt, user interface libraries for building map applications.

OpenGeo is primarily targeting governmental organizations as a means of helping them fulfill the requirements of the Open Government Directive and enable more participation and collaboration with government data.

The company competes for its customers accounts just like any other commercial software support provider. What differentiates the company is the social enterprise philosophy requires revenue to be re-invested in the underlying projects and developers.

To date OpenGeo has been funded by Gorton although the company expects to start covering its costs this year and change its legal status in 2011 when it is expected to be in a position to repay some of the funding provided by Gorton, as well as rewarding employees.

The latter is an essential part of the long-term business model as the company is aware that there is a non-trivial chance that the employees, which include some of the core contributors for the projects supported – could set up their own for-profit, venture capital-backed companies if they are not properly rewarded by OpenGeo.

It is easy to be a non-profit when you are not making any money. Keeping employees happy with profit sharing will be key to proving the validity of the social enterprise model.

That said, the company has been enable to attract a team of developers and other employees that share the cooperative ethos and the philosophy will remain one of profit-sharing and social responsibility. The intention is also to prove that a social enterprise is a valid alternative to venture-backed enterprise and encourage and invest in other social enterprises.

The philosophy and intentions are good in theory, but I wondered how they will work in practice, especially without a benefactor with deep pockets like Gorton. While it would appear to be a challenge, Chris Holmes made the point that investing in the social enterprise model was as much about investing time as money, and that by sharing its experience OpenGeo can encourage other social enterprises to fulfill their goals without the need for significant funding.

More details on OpenGeo and its strategy will be available for 451 Group clients in our formal report, which will be published later today.