From HashiCorp‘s Terraform to RedHat and Meta’s LLAMA, the debate about open-source licensing and the meaning of the community behind it has rocked the software world over the past years. Many companies utilizing and writing open-source look at these changes with interest and worry. What does it mean for the future of open-source? How does it impact the products they are using? Does it increase the revenue sufficiently to weather the backlash? Thus, let us look at the history, the current controversy, and the impact it should have on your business strategy.
Open-source and Free Software
When Richard Stallman founded the Free Software Foundation, the goal was clear. Free software was a social movement where anyone should have four essential freedoms:
- The freedom to run the program as you wish for any purpose (freedom 0).
- The freedom to study how the program works and change it so it does your computing as you wish (freedom 1). Access to the source code is a precondition for this.
- The freedom to redistribute copies so you can help others (freedom 2).
- The freedom to distribute copies of your modified versions to others (freedom 3). By doing this you can give the whole community a chance to benefit from your changes. Access to the source code is a precondition for this.
Like any social movement, the Free Software idea generated pushback from businesses trying to protect their intellectual property. Even companies utilizing GPL licenses felt at times uneasy about the zeal of the Free Software movement.
Out of this conflict, the open-source idea was born. In contrast to the Free Software movement, open-source focuses more on the development mode and the source code delivery. The open-source definition is consequently longer, less fundamental, but more focused on the benefits. The length and focus make it more straightforward for people outside the movement to grasp the different ideas.
Thus, most businesses focus on the open-source aspects and the advantages they bring to organizations. Control of your IT, Data, and processes are part of both definitions, yet the open-source one spells them out and makes it easy to connect to “Open.”
Current Sales Strategy Shifts
The scenario worked well for on-premises software. Companies who wanted support and services bought them, financing the development for all users.
Even during the advent of the cloud, the model worked well. Hybrid offerings with cloud services and open-source on-premises versions could compete against more extensive, less specialized offerings.
However, two things changed. For one, venture capital became more focused on immediate sales growth. Thus, companies that started with MIT or GPL-Licenses relicensed their software. Licenses such as the Business Source License (BSL) preserve many of the sales pitch advantages of open-source without being genuinely open-source. Most importantly, they allow smaller companies to deny free usage of their software from leading cloud services. Thus, the companies hope that the change in licensing might bring them additional revenue from the leading cloud service providers.
This role of the cloud service providers is the second significant change. Companies like AWS have started offering software themselves. The offerings, in turn, reduced the revenue of the developers. The situation got made worse by many of the service providers not contributing back in any form to the upstream projects. Thus, they increased the pressure to fix bugs and provide quality software without any benefits to the developers.
The increased pressure to provide quality software and the discrepancy between the revenue development got companies to change their license. Whether the change of licenses works remains to be seen.
Open-Source Strategy
Today, many companies embracing open-source software usage and contributions. Thus, the question remains: What impact should the changing licenses have on open-source strategy?
Until now, the license changes have affected very few companies. Thus, most customers are so far unaffected. However, it might be worth changing the strategy to look beyond the simple licensing terms and consider community involvement and integration into the ecosystem. Seeing a company committed to the principles of open-source software could prevent having to deal with licensing changes in the future.
Likewise, consider whether cloud service providers play nicely with the organizations and projects that create the software when choosing a cloud service offering.
Likewise, for anyone creating software, it should be part of the strategic planning of handling it if one of your dependencies changes its licenses. Nothing is more frustrating than suddenly scrambling because updates are no longer available or legally usable. Software Bills of Materials can go a long way to ensure everything is known.
Lastly, your sales strategy should reflect the possibility of a large cloud service provider undercutting your offerings. Clarifying what differentiates you beyond price and convenience can help win the key customers.
Strategy Change: Time for Freedom
With the changing licenses and ecosystems around open-source, we have to ask whether open-source as a coding and business strategy has run out of steam. We can see the attitude of former adversaries and proponents change. Thus, the point might have come that in a time of cloud services, open-source isn’t entirely applicable anymore.
However, while the strategy might change, the ideas are still relevant. Consequently, it might be time to reembrace the social movement of software development. Free Software with Free as in Freedom.