Ivan Ristić

The death of dual-licensing as a commercial open source strategy

We are witnessing an interesting development: an alliance is being formed to execute a hostile take-over of a successful open source project. Yes, I am talking about MySQL. From the press release:

"Our goal with the Open Database Alliance is to provide a central clearinghouse for MySQL development, to encourage a true open development environment with community participation, and to ensure that MySQL code remains extremely high quality," noted Monty. "Participating members at this stage in the 'Alliance' will have a strong voice in how the organization is structured, and we look forward to collaborating with anyone in the industry that provides or depends on MySQL."

Dual-licensing has been a favourite commercial open source strategy for many, but what we are seeing now may be signalling the end of its popularity. The conventional wisdom, until now, was that people would not fork an open source project for as long its (commercial) owner did a decent job at maintaining it. Now we see that, once a project reaches a certain level of popularity, and the right mix of commercial and personal interests exists, the fork happens anyway. The community takes over, abandoning the project's commercial "host" and moving the code into a new phase of development.

One must not forget, on the other hand, that this is not the first time MySQL had been forked, but that you did not hear about those other forks simply because they were small in scope and generally uninteresting to a wider audience. They did not endanger the project. This time, with one of MySQL's founders participating in the forking effort, there is a real possibility that the fork starts to be perceived as the main development branch.

How did MySQL become so successful?

We often talk about business models, technology, open source and other similar topics that are unavoidable for anyone interested in starting a business today, but we sometimes forget the real reason why products become wildly successful. It's actually rather simple:

1. You have to have something that people really need.
2. You have to essentially be the only choice on the market.

Get those two things right, and everything else will follow. MySQL was there, in the right place and at the right time, to fill a critical gap that existed back in the early days of the Web: everyone needed a lightweight database engine that could be used to power Web sites. The fact that MySQL was not open source¹ did not matter, and neither did the fact that MySQL lacked many of the features needed to be a proper database². The features MySQL did have were right for the job and so people used it.

---

Footnotes:

1. MySQL was initially free for end-users, but you had to pay for redistribution; ISPs were in a grey zone.
2. The message from MySQL was, rather amusingly, that only wimps needed transactions (paraphrasing).

Read ChangeThis and you may not need to buy a business book ever again

ChangeThis is a fantastic place that has tons of high quality content (essentially condensed books, often very well known), with each piece packaged as an attractive and easy to read PDF:

Weʼre betting that a significant portion of the population wants to hear thoughtful, rational, constructive arguments about important issues. Weʼre certain that the best of these manifestos will spread, hand to hand, person to person, until these manifestos have reached a critical mass and actually changed the tone and substance of our debate.

What is a manifesto?

ChangeThis doesnʼt publish e-books or manuscripts or manuals. Instead, we facilitate
the spread of thoughtful arguments…arguments we call manifestos. A manifesto is a five-, ten- or twenty-page PDF file that makes a case. It outlines in careful, thoughtful language why you might want to think about an issue differently.

I came across it several years ago, loved it, and then somehow managed to let it slip. I was lucky to re-discover it a few days ago. This post is to make sure this never happens again.

Dual-licensing for open source businesses

When I started to build a business around ModSecurity, back in 2004, I chose to keep complete ownership of the ModSecurity code base.  This business model is better known as dual-licensing. Keeping ownership of the code has the following advantages:

1. The product becomes (or remains) an asset; it increases the value of your business.
2. You can license the product under a different licence. For example, you can sell a version under a closed-source licence to the companies who are not fond of (or familiar with) open source licences. Similarly, you can sell OEM licences, which may be quite an interesting possibility, depending on the type of product you have.
3. Finally, you can bundle your open source product with another closed-source component and release the whole as a commercial closed-source product. This is quite a common strategy today.

Dual-licensing only makes sense when combined a viral licence such a GPLv2, in which case it helps you make your software freely available to your users, simultaneously creating a shield to guard you from your competitors—with only the open source licence to work with, the only way for them to benefit from your code is to embrace open source (which seldom happens).

As you can see, the advantages are many. But they are not free.

In return for the above benefits, you create a community of users rather than of a community of users and developers. The people interested in joining an open source project will largely do so for the reasons of passion, but the asymmetrical relationship of dual-licensed projects often stands in the way. Not only they have to justify giving you something (code rights) for nothing, but they can never hope to truly become part of the development team.

End result? You may end up with no contributors at all.

On the other hand, if you give everything away for free, you may find it difficult to pay for further development.

I spent months and years thinking about the above conundrum, and ended up believing that dual-licensing is an acceptable compromise and a viable business approach. At the end of the day, the approach probably won't give you that warm and fuzzy feeling only the participation in the open source community can, but, if successful, your project will be made available to everyone for free and it will pay you salary to keep on doing what you love.

Microsoft vs. Yahoo analysis on Marc Andreessen's blog

I don't have a habit of making posts consisting merely of links to interesting content elsewhere, but this one is just too good to pass: Marc Andreessen published an analysis of how the takeover fight between Microsoft and Yahoo may play out. Fascinating!