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Open-Source vs. Closed-Source Password Managers: Which is Right for You?

Tony Caccavo, Esq. is a former educator, attorney, and the CEO of TeamPassword, a password management company. He believes cybersecurity tools and information should be made accessible, to better protect individuals, companies, and society at large.

2024-07-04T05:45:00.000Z14 min read

Password Management

In a world where the average person juggles over 100 passwords, the need for robust password management has never been more critical. 

But which type of password manager is right for you? Open-source or closed-source? As cyber threats evolve, so does this dilemma.

This digital debate pits transparency and community-driven development against polished interfaces and professional support. Whether you're an individual looking to secure your online presence or a business safeguarding sensitive data, understanding the nuances of this debate is crucial.

Ultimately, the choice between open-source and closed-source password management depends on the specific needs, technical abilities, resources, and preferences of each user or organization. 

Let’s dive into the world of password managers and explore the strengths and weaknesses of both open-source and closed-source solutions to help you make an informed decision. 

[Table of Contents]

A man and woman are sitting down together. The man is holding a computer and looking at the woman, while the woman holds her head in confusion looking whilst looking at the computer.

Understanding Open-Source and Closed-Source Software

Open-Source Software

Open-source software refers to computer programs with publicly available code. Some, allow anyone to view, change, and share the code freely. Others (like most open-source password managers), only allow people to view the source code, and if they wish, copy and modify the code for their own needs.

This approach encourages teamwork, innovation, and transparency in software development. Users can adapt the software to their needs, following the open-source license terms. Examples include Linux, Firefox, and Apache. 

Open-source projects often improve quickly due to community contributions. This approach has become common in both personal and business computing. 

Closed-Source Software

Closed-source software refers to computer programs whose source code is kept secret. Only the creators or owners can see and change the code. 

Users can run the program, but they can't modify it or see how it works internally. Examples include Microsoft Windows, Adobe Photoshop, and many mobile apps.

Companies use this model to protect their work, maintain control over their product, and generate revenue through sales. Closed-source software often comes with professional support and polished features. However, users often have less freedom to customize or inspect the inner workings of the program.

Key Differences Between Open-Source and Closed-Source Software

Source Code Accessibility

Open-source software makes their source code publicly available. Closed-source software keeps its source code private and protected.

Cost

Generally speaking, open-source software is cheaper than closed-source software, which typically requires paid licenses or subscriptions.

Support

Closed-source software usually provides dedicated customer support, while open-source relies more on community forums and resources. 

Security

Traditionally, closed-source software is considered more secure due to limited code access, but open-source benefits from community scrutiny to find and fix vulnerabilities quickly.

Customization

Open-source allows users to modify the code to suit their needs, while closed-source offers limited customization options.

Development and Innovation

Open-source relies on community collaboration and contributions, which can lead to rapid innovation, while closed-source development and innovation are limited to the developing company and its users. 

Popular Open-Source Password Managers

Bitwarden

Known for its robust features and ease of use, Bitwarden offers both cloud-based and self-hosted options. It uses strong encryption standards like AES-CBC 256-bit and PBKDF2 SHA-256 or Argon2. Bitwarden is a favorite amongst those with a high degree of technical skill.

Compared to other password managers, Bitwarden’s user interface (UI) is less intuitive. Syncing and new credential detection can also be slow or require manual intervention.

KeePass

One of the oldest and most widely used open-source password managers, KeePass, is highly customizable and supports various encryption algorithms, such as AES-256, ChaCha20, and Twofish. It is primarily self-hosted and offers extensive plugin support. 

While customizable, KeePass’s UI has been described as dated and less user-friendly compared to more modern password managers. Users without technical expertise have found it challenging to navigate and use. KeePass also lacks some features common in other password managers such as automatic password capture and password auditing. 

Padloc

Praised for its user-friendly interface and flexibility, Padloc offers both cloud-hosted and self-hosted options. It uses AES cipher in GCM mode for encryption.

Compared to other password managers in its category, Padloc lacks some common features, such as automatic password capture and autofill capability. Padloc also restricts its free plan to fifty passwords, far below the average number of logins used by the average person. 

Popular Closed-Source Password Managers

TeamPassword

The easiest password manager on the market and the best one for teams, TeamPassword gives users the access they need when they need it. TeamPassword uses AES 256-bit encryption to safely protect user data, including its unlimited notes field and attachments, features available on every plan at no additional cost. TeamPassword also has live customer support by email, phone, or live chat. 

While easy to use, the user interface is a bit outdated. Some users have also voiced frustration at the lack of advanced features available in other password managers, such as a travel security mode or password health check. 

LastPass

The global leader in password management, LastPass provides robust password generation and management tools. LastPass also offers useful features like password health checks and dark web monitoring.

Recent security breaches that exposed encrypted user data have raised concerns about LastPass’s reliability. Users have also reported dissatisfaction with LastPass’s customer support, particularly for free users. 

1Password

One of the most feature-rich password managers on the market, 1Password allows users to store various types of information, and encrypted file storage is available for some plans. 1Password’s Watchtower feature monitors password health and security breaches, while Travel Mode protects sensitive data during border crossings.

Because of its many features and options, the 1Password UI and user experience (UX) can have a slight learning curve, especially for those who are less technically inclined. 1Password also has limited customer support options and is pricier compared to alternatives. 

The word "PASSWORD" is in green and all caps over a jumbled background of blue digits and letters representing code

Comparing Open-Source and Closed-Source Password Managers

Security

Both types of password managers typically use strong encryption methods to protect stored data. End-to-end encryption, multifactor authentication, and strong master password requirements are standard. 

Code-Transparency and Auditing

Open-source password managers make their source code publicly available, allowing anyone to view and audit it. This allows security experts and the community to inspect the code for vulnerabilities. This approach is based on the principle that a system should be secure if everything about it, except the key, is public knowledge.

Closed-source password managers practice what’s called “security by obscurity.” Essentially, the theory is that keeping the code private prevents potential attackers from easily identifying and taking advantage of vulnerabilities. Of course, this also means that users and independent security experts cannot inspect the code. Closed-source password managers thus rely on their development teams, contractors, and user reports to identify vulnerabilities.

Vulnerability Management 

In theory, the collaborative approach taken by open-source password managers means that there are more eyes on the code leading to quicker identification and resolution of security issues. Their development teams can spend more time fixing vulnerabilities instead of searching for them, and the community can then verify the implementation of fixes themselves. 

Password managers that keep their code secret, therefore, have a greater responsibility for identifying and fixing vulnerabilities themselves. This can be a limitation if they don’t have sufficient resources or expertise to thoroughly audit and secure the code. Most undergo regularly scheduled mock cyberattacks by ethical third-party hackers (called “penetration tests”) to ensure their system is being reviewed externally. 

Features and Usability

User Interface

Open-source password managers may have simpler and less refined interfaces. These may be customized and tailored to the customer’s needs and preferences. However, doing so typically requires technical expertise to implement and maintain. 

Closed-source password managers typically offer a more polished, user-friendly interface out of the box. These companies invest significant resources in designing their tools to be intuitive and easy to use without requiring modifications.

Cross-Platform Compatibility and Syncing

Open-source password managers can offer syncing and compatibility across multiple devices and platforms, but implementation may require manual setup and technical knowledge. 

Comparatively, closed-source options offer seamless syncing and compatibility across multiple devices and platforms. They often provide automated syncing features without the need for manual intervention. 

Customization and Flexibility

Open-source password managers generally offer more customization options and flexibility. Users with relevant technical expertise can modify the source code to add features or tailor the software to their specific needs. 

Closed-source managers typically have a fixed set of features determined by the company. Some may provide their Application Programming Interface (“API”) to customers, often at a cost, enabling them to customize a range of features, including bulk operations, custom reports, and the implementation of additional security measures.

Customer Support

Support for open-source password managers is generally community-driven. Users rely on forums, community discussions, and documentation created by other users and developers. While some open-source platforms may offer paid support options, the primary support mechanism is through community contributions and peer assistance. This can lead to slower response times and a reliance on user expertise to troubleshoot issues.

Closed-source password managers typically offer professional dedicated support, including features like 24/7 help desks, live chat, email support, as well as comprehensive documentation. Users can expect timely assistance for any issues they encounter, as well as regular updates and maintenance provided by the company. This level of support is often included in the subscription fee or available as part of a premium service package.

Cost

Open-source password managers will often have a free option with no upfront costs or subscription fees. However, this is for core features. Premium features, including support, may be offered for a fee. It’s worth noting that open-source password managers can be self-hosted, potentially reducing long-term costs. Many open-source options generate a significant amount of their revenue from support contracts or donations.

Closed-source password managers usually operate on a subscription-based model with recurring fees. They often have a tiered pricing structure for individuals, families, and business plans. Some may even offer a free version with limited features. Their costs, including development and maintenance, are covered through direct sales.

Pros and Cons of Open-Source and Closed-Source Password Managers

Advantages of Open-Source Password Managers

Transparency

The source code is openly available for review, allowing security experts and the community to audit it for potential vulnerabilities or issues. This increases trust and accountability.

Control

Users are not tied to a single vendor and can self-host or migrate to a different solution if needed, reducing dependency risks.

Community Contributions

Open-source projects can benefit from contributions and improvements from a global community of developers and security researchers.

Customizability

Users can modify the source code to add features or customize the software to their specific needs.

Cost

Most open-source password managers are free to use, though premium features such as single-sign-on (SSO) and multifactor authentication may come at a cost. 

Disadvantages of Open-Source Password Managers

Responsibility for Security

Users or organizations are responsible for ensuring the software is securely implemented and updated, which requires technical expertise.

Potential for Vulnerabilities

While the open-source nature allows for auditing, it also exposes the code to potential attackers who may attempt to find and exploit vulnerabilities.

Lack of Dedicated Support

Open-source platforms may lack dedicated support or maintenance compared to commercial offerings, potentially leading to slower response times, bug fixes, or updates.

Integration Challenges

Integrating open-source password managers with other enterprise systems or applications may require additional effort and customization.

Advantages of Closed-Source Password Managers

Professional Support

Closed-source password managers typically offer dedicated customer support, ensuring users have access to help for troubleshooting, updates, and security issues. 

User-Friendly Features

These password managers often come ready to go. They are often polished, with user-friendly interfaces and features designed for ease of use, making them accessible to non-technical users.

Security Warranties

Closed-source solutions often provide security warranties and certifications, which can be crucial for businesses needing to comply with industry regulations. 

Consistent Updates

They usually receive regular updates and security patches from the company, ensuring the software remains secure and up-to-date.

Disadvantages of Closed-Source Password Managers

Lack of Transparency

Users must trust the company’s claims about security and features, as they cannot inspect the source code for hidden vulnerabilities or unwanted features like tracking.

Cost

Closed-source password managers often require paid subscriptions, which can be a recurring expense for users and organizations.

Limited Customization

Users cannot modify the software to fit specific needs or workflows, as the source code is not accessible.

Cloud Storage Concerns

Many closed-source password managers store data in the cloud, which can raise security and privacy concerns for users wary of cloud storage.

Five office workers sit around a conference room table, the woman in the middle holds hands together in thought while speaking to the group, there is an open computer in front of her

Factors to Consider When Choosing a Password Manager

Personal vs. Business Use

Both personal and business users should consider their specific needs, technical expertise, and risk tolerance. Finding the right password manager for a team requires an honest assessment of your team's needs and technical ability. It’s often suggested to choose software that can be used by everyone, not just the most technically skilled users in the organization.

Open-source options offer code transparency, community-driven development, and customization options, which may appeal to tech-savvy users or organizations with specific security requirements. They’re often free or cheaper than closed-source alternatives but might lack polished interfaces or dedicated support. 

Closed-source alternatives often provide user-friendly interfaces, professional support, and regular updates, which can appeal to those who prioritize ease of use and dedicated assistance. However, they typically come with recurring costs and less transparency. 

Business users should also consider compliance requirements, integration with existing systems, and scalability. 

Ultimately, the choice depends on balancing factors such as security, usability, cost, and control over the software. 

Technical Expertise

Open-source password managers often require more technical expertise to implement and maintain. Many can be self-hosted, which requires technical knowledge in server management, networking, and security. User support relies heavily on the community for knowledge. These resources are often written by more technically inclined users and can, therefore, be difficult to decipher for those less familiar. 

Closed-source password managers are generally built with non-technical users in mind. They have comparatively more intuitive user interfaces, provide professional customer support, and invest heavily in features to improve the user experience. Furthermore, closed-source platforms typically include pre-built integrations. 

Budget Constraints

Both open-source and closed-source password managers offer a range of subscription options. That said, open-source password managers are typically cheaper, and many offer a free version. Closed-source password managers are generally more expensive.

When considering budget, it’s important to look beyond the cost of the password manager. If you have a small IT or development team, do they have the bandwidth and expertise to implement and maintain an open-source password manager? What is that time worth? 

Specific Feature Requirements

For companies with very specific requirements and technical ability, an open-source password manager is a great option, as they can tailor the platform to their needs. While open-source password managers do develop new features, there is more of an expectation that their customers take a DIY approach. 

Closed-source password managers often include more features with their plans and tend to build new features more frequently. Many use internal resources to improve the product and user experience while also encouraging feedback from their user community. However, each closed-source password manager offers different features, so if a customer needs a specific feature, they must shop around to find which platforms have it.

Final Considerations for Choosing Your Password Manager

Choosing between open-source and closed-source password managers involves considering factors such as transparency, support, cost, and customization. 

Open-source password managers offer code transparency, allowing users to inspect and modify the software, often for free, but require a higher level of technical expertise and rely on community support rather than dedicated customer service. 

On the other hand, closed-source password managers provide user-friendly interfaces, professional support, and regular updates, often with security warranties, but come with recurring costs and offer less transparency.

Ultimately, the decision between open-source and closed-source password managers depends on the user’s or organization’s specific needs, technical abilities, and priorities regarding security, cost, and control over the software. 

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