Open source is not a business model. 

This is a common refrain heard in the open source community, but what does it really mean? Aren’t there hundreds, if not thousands, of businesses built to market open source software projects? 

The bottom line is that open source is a software development methodology - it is not a business model. It is about communities coming together to work on a solution that they all benefit from, and sharing it to the world, with minimal restrictions on its use. It is fueled by individuals being involved - contributing talent, time, and resources. And it drives almost all software, at some level, today. 

Yes, business are born from open source projects. For instance, they can build the foundation of their business on open source software and build a proprietary solution on top of that, or they can provide a software package as open source software and then sell enterprise versions with full support. These are two common examples. 

But the reality is that success can be elusive. Helping others attain it is the driving force behind the Hacking Open Source Business podcast, launched earlier this fall. 

In the inaugural episode, co-hosts Matt Yonkovit and Avi Press, Scarf Founder and CEO, dug into a recent controversy that highlights the challenges open source projects face trying to create sustainable revenue streams to support a business or a non-profit that funds the project’s growth. 

What did Lightbend do?

On September 7, 2022, Lightbend announced it was changing the license for its very popular Akka software from the Apache 2.0 license, one of the most popular and permissible license options, to the Business Source License v1.1. This is a dramatic change - going from allowing essentially unrestricted use of the software to one that requires a license from Lightbend for the first three years from when the version was released. After that it reverts back to open source, although it is important to note that it is only applicable to that version, not any subsequent updates. Those each start their own three year clock. 

Akka was first released 13 years ago and has grown to be one of the most popular solutions for distributed computing and edge networks. Like most open source projects, it is unseen to consumers but powers the technology they rely on. It is used by household names such as Apple, Disney, GM, HPE, Norwegian Cruise Lines, Starbucks, and Tesla. 

When discussing the need for this change, Akka creator and Lightbend’s founder and CEO, Jonas Bonér, said, “We have decided to change Akka’s license to ensure a healthy balance between all parties, shared responsibility, and, by extension, contribute to Akka’s future development,”

The company lamented that large enterprises rely on the software, but have also matured in the open source space to where they are able to maintain the software themselves rather than paying for support agreements with businesses supporting the software. And sometimes they don’t contribute these improvements/fixes back into the community - a core tenet of open source. 

Lightbend isn’t the first to change its licence after widespread adoption - and certainly not the last. In 2018, MongoDB changed its license to Server Side Public License (SSPL), a license they created and is not recognized by the Open Source Initiative as an open source license. Last year, Elastic followed suit and now provides its Elasticsearch and Kibana software under both its Elastic Search license and SSPL, allowing users to choose which license to use. They acknowledge the switch away from open source, “Neither the Elastic License nor SSPL have been approved by the OSI, so to prevent confusion, we no longer refer to Elasticsearch or Kibana as open source. We updated our website and our messaging to refer to these products as ‘Free & Open,’ and when talking about the licenses directly, we describe them as ‘source-available.’”

Is moving to a non-open source license mid-project the answer? 

Many companies are facing similar challenges, but is changing the license terms mid-project the right answer? 

As Avi said during the episode, “I have a lot of thoughts. . . I do like the notion of licenses that can have some kind of protections for the company that is putting in the vast majority of their efforts into a given piece of software. What's really tough about this particular case is that Akka is already everywhere, so what a change like this does, it puts a lot of people in a really tough position because they could find themselves with a very sudden, multimillion-dollar liability for a dependency that they didn't even know they had.”

The issue these open source companies face is often similar: lack of growth or overall revenue.  The thought that usage and adoption mean commercial success is not a given. As Matt offered during the episode, “There are lots of projects that rely on this, there's lots of proprietary code that rely on this, but just because there is, doesn't necessarily mean that people are willing to pay for it."

We understand the challenges that projects like Akka are facing, and starting with the BSL, or similar license, could be a viable option. But changing the license terms mid-project is troublesome on many levels. Besides the end users of the original project, many open source projects rely on other open source projects - derivative works. A license change like this can throw the derivative work, and its users, out of compliance and affect future development. Apache Flink is a high-profile example of this with Akka’s change. You can see their response and next steps here. 

How can open source projects stay open source?

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During the episode, Matt and Avi discussed the current market for software companies and how that may spur more license changes away from open source. Matt noted, “I think as the market has changed recently, the pressure to show not only growth from a overall user perspective, but able to do cost control and containment has started to move up the list of things you need to worry about.” And Avi added, “Very very true. As we shift into a different kind of venture market where investors are just not as impressed by growth without the revenue being there, you're gonna see a lot of people just try to tighten the grip on the user base and try to squeeze as much money out of it as they can, which is going to put a lot more projects like this in a tough spot.”

As companies face these challenges, they need to look back at why they chose an open source model in the first place. Ask yourself, Did you choose open source because you want the trend or because you believe that's the best way to build software? If you chose open source because you believe its the best way to build, then focus on making the open source funnel stronger, more efficient, and easier.

Some key efforts can go a long way towards a more successful project - and one that is sustainable as open source. For instance: 

1. Collect and use deeper analytics around your user base. Often companies assume their user base is bigger then it is, so when they go to monetize it and the revenue does not materialize they are left scrambling for whats next. Getting this data early in a project’s lifecycle provides information you need to make better decisions early on.
2. Have a full understanding of the ecosystem of other projects who rely on your software. Maybe there are partnership deals or opportunities to collaborate to share resources or revenue. Again, deeper knowledge unlocks opportunities.
3. Optimize the model you have. Lots of companies are feeling around in the dark to understand the open source side of the house. Converting from "Free" to "Paid" needs to be optimized.

Whatever stage your open source project is at, we at Scarf can and want to help build your community and business. We understand these issues at their core - we were founded by individuals who created and maintained both successful and unsuccessful open source projects. We saw the struggles and the opportunities, and we want to make sure open source stays open source, which is why we built the tools Scarf provides. 

Scarf is free to use - with a paid, professional plan available. Learn about our Package SDKS, Scarf Gateway, and Documentation Insights. Then sign-up here. 

Already a user? We would love to hear from you about how you are using it, what is working, what isn’t, and how we can improve Scarf. Send us a note here or email us at hello@scarf.sh.

And, finally, subscribe to the Hacking Open Source Business podcast. We will be having some very interesting and valuable conversations