What if commercial source-available vendors stopped licensing their product under their source-available license and only offered a traditional commercial license?
In my current research interviews on commercial open source, two alternative intellectual property (IP) strategies are becoming visible: (1) Stay with open source and rely on trademarks, quality, and speed and (2) forego open source and use a non-compete license from the start.
For context: Software vendors can simply sell a commercial license to their products and services and that’s it. Or, they can provide an additional “open license” that allows for free-of-charge use of their software. Until about ten years ago, the “open license” was primarily an open-source software license. The benefits of a second free-to-use license were manifold, but most notably it provided so-called friction-less distribution: Users didn’t have to negotiate with a vendor, they didn’t have to pay, they could just download and use.
There is an added powerful but often ignored benefit of using an open source license: It kept the vendor from price gouging, because the open source license left the door open for a fork of the software. If users forked and were successful, the vendor could possibly loose substantial business; this threat arguably kept vendors from abusing the software lock-in.
Then vendors invented source-available licenses, more aptly called non-compete licenses. These licenses are effectively open source licenses, with the added clause that you cannot use the software to compete with the vendor. Many commercial open source vendors relicensed from open source to source-available for their free-to-use license.
From practical observations, and from what vendors are reassuring me, source-available licenses are not inferior to open source licenses: They drive adoption just as well. For the vendor then, nothing was lost but more power was gained.
Specifically, if a source-available vendor decided to not provide their product under a free-to-use license any longer, users who don’t want to pay would be stuck with an aging version of the software under a license that makes it hard to build a community around a fork.
So far, users don’t seem to have taken notice. Also, some source-available licenses like the FSL try to alleviate fears with a delayed open source clause. Still, it seems like a matter of time to me that a maturing company will eventually try to tighten the screws and force-convert users to customers.
Then what? Relicensing to source-available created significant distrust into commercial open source, hurting the business model. Dropping the source-available license will probably ruin the business model. At a minimum, users will wake up and recognize that payday will come.
Positively framed, if such behavior becomes common, skipping the open source license will not be an option for new commercial open source startups any longer; rather their second free-to-use license will have to be a permissive open source license from the start. This will keep the startup on their toes, as trademarks, quality, and speed will be their main competitive differentiator, and this is probably a good thing.
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