The Web Economy/26

Licensing and Business Models
This is a lesson part of the module The Web Economy out of the Open Source ERP/Executive Masters course conducted by a private university.

Topics

 * Licensing is a necessary evil for Open Source. The basic principles of free software is to always be free and never owned by a party that might control it.
 * Open Source began to differentiate from Free Software with semi open licensing.
 * Commercial tendencies began to crop into licensing and business models. Some uses dual licensing models but it has been dificult to capitalise.

Assignment Tasks

 * What are the various licensing models used by Free and Open Source Software and what are their differences with each other?
 * What projects have succesfully made money out of Open Source? How?
 * How can community open source survive when its business model is non existent?

Activities

 * Publish your works in an attractive manner in your user page, stating your own views and findings providing links to your sources. Use the talk page here to score marks.
 * Create or edit sub-pages of course materials within wikiversity.
 * Discuss in the forum (link shall be provided) by offering your ideas and answering or comment on others' postings.

Introduction

 * During the cave age or the beginning of humanity’s first memory, any creation of art or industry was free and not opyrighted nor patented nor subjected to any license agreement. Fire, the wheel and spears are not copyrighted where another caveman need to seek permission or acknowledge the creator before using them. Today the concept of patents and copyrights in the proprietary world is a common reality of life. It is all about making excluding others from making the same money from such an exclusive right. In the FOSS world it is all about freedom. But that doesn’t mean it cannot make money. In fact, money has caught up with it.

Lend Me Your Pen

 * When man began to write, it was for the pursuit of knowledge and sharing the joy of it. Today you make money if you can copyright and sell it. For FOSS advocates, they believe in the moral right of been recognised for it but not keeping it under the condition of payments. It is indeed to be shared for all its worth. So licensing for FOSS is more for protecting that freedom.

All Wrongs Reversed

 * In 1976, a programmer mischievously put the first known copyleft notice in his code (see figure top centre). It was not a proper licensing notice and has no legal significance until in the mid 80s Richard Stallman used a proper licensing model that spells out the specific condition of freedom to share and dsitribute ad infinitum without anyone locking up creative works again.

GNU Public License

 * Stallman introduced the GNU GeneralPublic License or GPL which is used in the first GNU projects, and then naturally adopted by Linux that gave it a serious future in the licensed sense. The GPL is a copyleft license that requires derived works to be available under the same copyleft. Under this philosophy, the GPL grants the recipients of a software the rights of the free software definition and uses copyleft to ensure the freedoms are preserved, even when the work is changed or added to.

Go Forth And Publish

 * The most important clause in GPL is that any derivatives of the sourcecode must be made public again. In this way any creative innovation is always available and can be further improved upon perpetually. This is a basic fundamental by which FOSS lives on.

Standing on Giants

 * By such a clause, small coders or ‘dwarfs’ can now stand on the shoulders of giants before them and see higher than before . This principle is what spearhead Linux development in an exponential manner without fear of the sourcecode been taken off the public domain or worse, its new coders sued and obstructed from continuing their creative pursuits.

Viral Law

 * The GPL license is thus by definition a viral license because any modfied or added code to it has to be GPLed too. This is good news for FOSS advocates as more and more sourcecode enter the public domain. However commercial interests that produces proprietary software become restricted to participate, and cannot take any such GPL code or they will get infected!

The Mozilla Pass

 * When Netscape was freefalling due to the onslaught from the free Internet Explorer agressively taking over its territory, it decided to go open source as a desperate attempt to avoid sudden death. However parts of its code are using proprietary software and so using the GPL license would be incompatible. It thus created the Mozilla license which allow the intermixing of both free and proprietary code. It would allow selective blackboxing. Interestingly the FSF recognises this as a free software license.

The Loophole

 * Thus with commercial fundings and success stories such as SugarCRM and Pentaho, Open Source started to become like a new mini dotcom bubble wave. Even Compiere was not spared. Many of these projects are individual owned and played the dual license game. As owner they can issue out one GPL license version of their code and another commercial version of their code usually called EULA to request from commercial users who wants to pay to obtain better warranty and value on paper.

Non-Warranty Clause

 * All licenses such as Apache and GPL has clauses which says that no warranty is given or is there any liability by the creator over any damage or loss of data from the use of the software. This is not only present in FOSS but most likely present in proprietary ones too. However this clause can be an excuse to engage the software developers as consultants or commercial entities to provide standby or on-site warranty in case of need.

15. Disclaimer of Warranty. THERE IS NO WARRANTY FOR THE PROGRAM, TO THE EXTENT PERMITTED BY APPLICABLE LAW. EXCEPT WHEN OTHERWISE STATED IN WRITING THE COPYRIGHT HOLDERS AND/OR OTHER PARTIES PROVIDE THE PROGRAM “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE PROGRAM IS WITH YOU. SHOULD THE PROGRAM PROVE DEFECTIVE, YOU ASSUME THE COST OF ALL NECESSARY SERVICING, REPAIR OR CORRECTION.

Business Purpose

 * Since commercial interest has cropped into Open Source territory and with the above stated tactic, there have been opinion from our community that the commercial ones are often breaking the Open Source stipulations of not putting conditions on the sourcecode. They started imposing restrictions as to what version of (crippled) sourcecode is open to public and what (latest) is only open to paying customers. In that manner we dispute that as not truly open source but as a wolf in sheep clothing! Our argument is that it is ok to conduct paid licensed software business, but not to abuse the term Open Source when it is not.

Lesser GPL

 * Many regard the Richard Stallman been overly strict and for been critcising the restrictiveness of GPL for commercial interests. It is said to be in between the stronger copyleft of GPL and the more permissive ones like BSD and MIT. It is more used for APIs or libraries that link to other software not requiring the viral effect.

The Fallacy of Paid Software

 * With FOSS running around how would one be able to sell any software? The only way possible is when the software is overwhelmingly superior then FOSS which most are not. In fact many of the FOSS ones are highly competitive. They only lack packaging and strong corporate presence. SAP is still leader in the ERP market as the market base is very well established with SAP. But in time to come with ADempiere improving unabatedly the scenario might change.

Links to Student Notes
(Provided by Students - subject to edit ranking by tutor)

Notable Links to Resources
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Sub-Pages
(Done in wikiversity as course material by the students under the guidance of the tutor)

Course Navigation
Next - Community OS vs Commercial OS >> The Web Economy/27