KAZEY JOURNAL

There are a number of ways traditional software vendors can participate in the open source software community. They circulate around open source licenses, such as the GNU General Public License (GPL), and how to leverage open source software as a marketing tool.

A sophisticated marketing application of the GPL is the dual license. The dual-license approach is not typically one integrated license. It is a business policy that permits a customer to choose one of two licenses: either a typical commercial license or an open source license such as the GPL.

Free option always good for customers

Providing a free option helps software marketers in a number of ways, including improved customer awareness and faster adoption, enormous advantages
in competitive positioning, and a virtual knock-out punch to competitor pricing power. Both government and industry IT procurement managers are saving hundreds of millions of dollars using open source as negotiating leverage to obtain price concessions from traditional software vendors. Does that help the dual-license vendor? Absolutely.

But there is more good news for savvy open source software marketers: The dual license creates no business complications for customers exercising the software in a trial project. In essence, the dual license equates to a money-back guarantee, delivering a large advantage over highly supervised trial licensing practices. Rather than putting the open source vendor in competition with in-house development projects, the dual license provides a natural segue to a commercial license and cross-selling of support and services. It helps, of course, for the open source vendor to have a consistent and clear commercial software license and service agreement ready for such an event.

Open source vendors need to highlight their marketing advantages and overcome some disadvantages. For instance, many government procurement agencies are not familiar with open source business models or strategies of any kind. It is difficult for them to take seriously any company that provides their product free of charge and makes money primarily on maintenance, updates, consulting, or enhancements (or redistribution in the case of the dual license).

In addition, proprietary vendors employ sales and marketing people who work hard every day to develop relationships with potential government and corporate buyers. Open source software projects, on the other hand, are often mis-characterized as the primary domain of pony-tailed introverts more interested in returning a system call than returning a telephone call.

Open source vendors need to promote their strategic advantages, such as labor- and system-saving from server consolidation on the Linux platform. OSS has major advantages of stability and security versus the traditional software model of proprietary patches and feature bloat. OSS has the advantages of ongoing availability and support of past versions versus the traditional software model of end-of-life and forced upgrades. OSS has advantages of enormous installed bases and world-wide developer talent versus the traditional software model of thinly spread customer support and a revolving door of developers.

Open source creates change, not only from legacy software, but also from legacy marketing. If you are a software vendor with the opportunity to use an open source strategy, it helps to understand how open source licensing can work. Below is an example of how the GPL applies to the Linux operating system software.

An example of open source licensing

The scope and limits of open source licenses become critical questions when formulating open source business strategies. Because of the popularity of GPL software like Linux, MySQL, and other open source programs, developers naturally have concerns about the boundaries of the GPL. They may wish to distribute their work along with other GPL programs but retain the proprietary status of their code and implementations. Users likewise must stay within the license parameters of the software they use, both proprietary and open source. There are many facets to open source licensing.

Many developers, users, and business managers, are unclear about what constitutes a derivative work, and for good reason. The software subject matter is complex, and there are different, somewhat elaborate tests within the U.S. district courts. We know in practice, that in the case of Linux, any program, (a browser, for example), that runs in the User Space of Shared Memory is not ordinarily considered a GPL derivative, (provided it uses standard system calls).

Changes to the Linux kernel and any modules that run in the Kernel Space of Shared Memory may be presumed to be derivatives. Statically linked binaries, for example, are presumed to be Linux derivatives. Static linking makes binary modules part of the executable; they are linked prior to the kernel being loaded. Potential exceptions to the GPL are generic drivers and standalone binary modules (which don’t modify the kernel). Dynamic modules, (including drivers), are loaded and unloaded at runtime, ie: dynamically linked. They extend the Linux kernel without recompiling and rebooting.

There is a strong argument that dynamically linked binary modules are not Linux derivatives. One caveat however: Binary-only distributions running in either the User Space, or running in the Kernel Space that appear to be outside the scope of the GPL, could still be considered GPL-derived works if they are contrived to circumvent the GPL by leveraging minor coincidental changes to the kernel.

Analysis under these types of guidelines is important to determining whether a work, in the above example as related to Linux, constitutes a derivative or not. Case-by-case interpretations correspond to circumstances like the license used, the application of the work, and the scope of the modification. Runtime libraries, client libraries, license types like LGPL, and similar material factors concerning their application, should be reviewed by an experienced software licensing attorney.

While there are a number kinds of open source licenses, the GPL is the most widely used. If you are developing original works to be distributed as open source, the license you select merits careful consideration. Developers who incorporate open source to solve larger problems should understand and record the type of upstream licenses that apply, such as GPL, LGPL, Revised-BSD, Mozilla, Creative Commons, and others. Other factors include what is being changed, if anything, and how the programs interoperate.

Why regular audits are a good practice

Users of open source, even if not distributing modified GPL binaries, should routinely audit their servers and clients to determine what open source programs are being used and whether they are being used within the scope of their respective licenses.

Traditional software vendors need to recognize the shift taking place is driven not only by successful open source projects, but also by the rapid and broad adoption of open source in the customer marketplace. The numbers behind open source adoption are compelling. Linux in both the United States and Asia is the fastest growing operating system ever. As measured by hostnames, Netcraft reports that the Internet has grown 26.1 percent over the past 12 months, over 67% percent of it served up by open source Apache servers.

According to Netcraft, “the number of servers using Secure Sockets Layer encryption has grown 56.7 percent in the most recent 12-month period” (April 2003 to April 2004), demonstrating an explosion of use of the internet for business. Unlike the hype at the peak of the dot-com boom, the current growth is based on sound demand in a frugal purchasing environment. Traditional software marketers should pay quick and fast attention to these changes, get educated about open source licensing, and fully evaluate the addition of open source strategies to their product marketing portfolios.

John Koenig is the founder of Riseforth, Inc., consultants to software, service, and open source vendors and users. Additional information on open source strategies and investment is available at www.riseforth.com, or contact him at (650) 726-7775 or by email.