Implications of open source licensing on business model

Does the GPL or Apache license make a difference in the commercialization of open source?

It's sometimes been said that the GPL is the best license for building an open source business. The reasoning is straightforward: The GPL has a reciprocal property such that those who embed and distribute GPL software with their products need to open source their software. The practical upshot of the reciprocity is that some companies decide to open source their software and some seek a commercial license so they don't need to open source their software.

At MySQL, a good chunk of the early revenues came from software and appliance companies who decided that while they loved MySQL, they would rather buy a commercial OEM license than convert their own applications to open source. This "Dual License" model helped make MySQL a successful business. We always viewed it as an example of the "quid pro quo" philosophy: If you want to adhere to the GPL and produce open source software, great; that helps increase the pool of open source software. But if you didn't want to open source your software, you can help by funding the development of open source software.

[ Related: Does GPL still matter? | InfoWorld's Savio Rodrigues explains why software vendors tend to stick with GPL. | Stay up to speed with the open source community via InfoWorld's Technology: Open Source newsletter. ]

With the permissive licenses like Apache or BSD, you can do whatever you want with the software without any obligation. There are no implications that software that builds on Apache or BSD needs to be open source. I'm not saying that one license model is better than the other; they have their own strengths and weaknesses.

Matt Asay has recently written that SpringSource's $420 million acquisition may bode well for more use of the Apache license over the GPL:

We just had a significant demonstration that you can make money with Apache-licensed software. SpringSource was doubling sales every year with Apache, and had a $420 million outcome as a result of both its sales and its community, which may be easier to come by with an Apache license than GPL, at least for commercial open-source projects.

There's some truth to the fact that a more permissive license may lead to broader adoption by developers. But as significant a payoff as the SpringSource acquisition provided for the company's investors and management, at the end of the day it was still a modest business of around $20 million in sales. It may be that for the products that SpringSource developed and acquired, Apache was the right license. But I don't think it's been proven that permissive licensing can build a robust business.

For companies that want to develop an OEM revenue stream, GPL licensing may be a better choice. You could argue that SpringSource's revenue growth came not from the use of the Apache license, but from acquiring other companies. For example, Hyperic (which the company acquired in May) uses a GPL license and was a significant contributor to SpringSource's overall revenues.

The bottom line is, no single license is perfect for all situations. Stephen O'Grady at RedMonk has a good analysis that compares the GPL and other licenses.

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