Software is a strange product. It exists entirely in the information space,
so the marginal cost of a copy is near zero. As DVD distribution has given
way to Internet downloads software has even escaped the bonds of
corporeal formats - like an advanced intelligence from Star Trek evolving
into pure energy - and can be delivered anywhere virtually instantly, at
virtually no cost.
The impalpable form of software posed challenges to the early creators
of software who wanted to sell it as a valuable new type of product. If
you sell a copy that can be copied and distributed at no cost how can
you spread the cost of creation across a large set of paying users?
Software licenses were the answer. By not “selling” the software
outright creators retain full ownership and use copyright law to limit
anyone else from making copies. Then, usually in exchange for a fee, the
creator loosens up just enough of the restrictions to attract users to the
software. The restrictions usually include:
- Limiting the use of the software to those paying fees
- Limiting the installation of the software to a certain set of (physical or virtual) machines
- Limiting sharing, renting, or reselling of the software
- Limiting certain uses of the software
- Limiting examining the source code (traditionally, source code was
not licensed and simply kept hidden)
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Limiting reverse engineering
- Limiting extending the software or building new software upon it
When you read a software licenses you find it’s mostly about LIMITS.
Limits are reasonable in ensuring that the creator is adequately
compensated for their creative investments. But limits on use of the
software also translate directly into limits on the business value you can
obtain from the software. Some of the unpleasant side effects of these
limits on a business include:
- Dependence on a single vendor. Typically the vendor retains
enough rights that you cannot ultimately obtain the software or
obtain services from anywhere else. If the interests of the vendor
differ from yours, too bad.
- Lack of control over license fees – the vendor sets them and even
after negotiating vigorously the vendor still has final control over
the price and any price increases in the future.
- Misalignment of long term goals. The vendor makes the bulk of
their money simply by selling the license – not by ensuring it gets
deployed effectively (the problem of shelfware) or by providing the
highest quality support. Support is often judged as a cost, instead
of a revenue stream tied directly to customer satisfaction. A license
sale is not inherently aligned with user value, which is realized by
getting the software in production and keeping it going over the
long term.
- Accidental license violations can carry stiff repercussions. For
instance, moving from one machine to another is increasingly an
automatic process – but does the license allow this? Are additional
fees due if for instance the number of cores changes during the
move?
- The customer has limited options for influencing product features
and fixes. All they can do is plead with the vendor and hope for the
best.
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The customer has little to no visibility into how the software actually
works. This is especially damaging in the security space where more
eyes on the source code make for a more secure solution.
And Then Came Open Source
It is no wonder that open source is so attractive – it reverses the premise
that software licenses are about limits on the use. It eliminates many of
the unpleasant side effects of traditional licensing by promising that the
creator will NOT impose such limits.
Open source software is licensed under principles of freedom to use,
study, improve, and share the software. The creator of the software, while
still owning the intellectual property behind the software, has agreed
that others may use the software without the traditional limits of a
proprietary license. An open source license has:
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No fees
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No limits to installation
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No limits to sharing, renting, or even reselling
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No limits to usage
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No limits to changing, altering, or evolving the software - source
code is even provided to encourage this
Many of the negative side effects of commercial licenses are
correspondingly reversed:
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You are NOT dependent on a single vendor. If the vendor isn’t
providing value, there is no monopoly over the source code
preventing competition. You can switch (or threaten to switch) to
another vendor.
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There are NO license fees on the basic product.
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The vendor makes money directly proportional to immediate
and ongoing value – such as support, documentation, consulting,
training, additional warranties, additional features.
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There is little chance of, and correspondingly less harm from,
accidental license violations.
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The customer has a much greater variety of options for influencing
product features and fixes – including sponsoring feature
development or contributing features back themselves.
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The source code is fully available and can be rigorously examined
by multiple parties for efficiency, reliability, and security.
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The source code can be readily archived by anyone – eliminating
the complications of code escrow contractual provisions.
Now, it should be clear – while it’s easier to build a quality product
using open source collaboration methods, it’s much HARDER to build a
viable business creating software if you choose open source licensing.
Disarming of the monopoly power of traditional licenses is not for
the faint of heart. Many users will use your product for free if they are
allowed to do so. You can’t just write great code and wait for the money
to flow in, you also have to also invest in value-added services and keep
them attractive.
The only thing harder, in the long run, than developing a successful open
source business is NOT going open source and trying to compete with
vendors who have committed and succeeded at this model.
Open Source Business Models
In fact many, if not most, open source businesses have cheated a little bit
on their open source commitment in order to make their businesses grow
more reliably. The most common model is an "open core" model, where
the core software is available open source, released under a designation
such as "community edition." But as soon as enterprise features are
needed customers must obtain an "enterprise edition." The enterprise
edition typically abandons pure open source licensing and reverts to a
traditional license – and the customer therefore loses to a large degree
the advantages of open source licensing.
Over time, many customers have found this dual license model
disadvantageous. The most demanded new features typically appear in
the "enterprise" version rather than in the “community” version – it's a
natural move to keep as much monopoly control as possible once you’ve
stepped down that path. But at some point the community version really
just becomes a teaser, providing a façade of open source, collecting
some free improvements contributed by the community, but retaining
the majority of the value of those contributions commercially for the
vendor.
WSO2 is committed to a 100% Apache-compatible model. There is no
community/enterprise version split – every product has all features and is
enterprise ready. We provide support services, maintenance, consulting,
training, and a variety of other valuable services around the free
software, for which we work hard to build a strong value proposition and
earn customer loyalty.
Open Source License Types
We would be remiss in omitting a notice that not all open source licenses
are created equal. In general there are two families of open source
licenses – "permissive" and "copyleft."
Permissive is as it sounds – the user is free to do virtually whatever they
like with the software – including creating derivatives and releasing them
under a traditional commercial license.
Copyleft licenses require that any derivative works, which might be
simple improvements or could be a combination of copyleft code with
other pre-existing code, must also be made available under the copyleft
license. This requirement scares many in the software industry, as it
behooves them to commit upfront to open source license terms in any
derivatives, or any other code they have which might be combined with
the copyleft software.
This stifles their ability to start coding now and assess the ultimate value
of the work, and the appropriate license to apply, later.
In one sense, copyleft protects the authors of the code, from being
exploited by others building on and profiting from their work without
giving back to the original creators. That is an admirable goal. But it
is not one that a lot of businesses are able to commit to in advance. A
permissive license allows a business to adopt code, improve it, share it,
profit from it, or whatever, without having to make a decision up front
about whether to share the derivative back to the community.
WSO2 encourages contributions and derivative works released under an
open source license, but does not demand that users pre-agree to return
improvements to the community. Especially in the middleware space, it
is fairly common that an internal application evolves into a marketable
standalone product. It is wise not to constrain future business models.
For these reasons WSO2 exclusively provide customers with permissive
open source licenses, specifically the most well known, the Apache 2.0
license.
Peter Cochran has said "The world is divided into two kinds of people,
those who spend a great deal of time saving money, and those who
spend a great deal of money saving time."
WSO2 believes that the combination of free open source software –
which can be used and improved by all – together with valuable business
services that help customers save time at a reasonable cost – are the
ultimate future of the industry. We believe permissive open source
licenses provide the greatest alignment between the interests of creators
and users of software.
So we encourage you to download and try out our products under the
open source "no obligation" license. We encourage you to engage with
the WSO2 community – share your experiences, contribute back to
the projects, or if you put a value on saving time, explore a commercial
relationship with WSO2. We are highly motivated to ensure you are
satisfied.
Also see TCO Factor and Why Contribute