UPDATED 18:21 EST / DECEMBER 22 2018

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Stormy weather: To stop cloud giants, some open-source software firms limit licenses

A heated debate has erupted in the open-source software world that’s pitting startups against cloud computing giants.

The furor concerns, of all things, new licensing terms, which software companies are adopting to thwart what they believe is unfair competition from cloud providers in general and Amazon Web Services Inc. in particular.

It’s the latest development in the ongoing struggle by open-source developers to come up with sustainable business models built upon software that is essentially free. Open source has transformed the software industry, but only a few companies such as Red Hat Inc. — itself likely to be acquired by IBM Corp. in a recently announced deal — are consistently profitable.

Confluent Inc. stoked the fire last week by announcing license changes to portions of its product line that explicitly prohibit cloud providers from delivering its software as a service. Confluent is the principal developer of the popular Kafka stream processing platform. The company made the move in response to AWS’ announcement last month that it will sell a managed Kafka service.

Confluent’s shift followed earlier announcements by MongoDB Inc. and Redis Labs Inc. of new licensing terms also aimed at cloud competitors. The moves have collectively sparked an almost religious battle among open-source advocates over whether cloud companies should be able to profit from free software by exploiting what some people say is a loophole in license provisions.

MariaDB's Howard: Amazon’s tactics are “the worst behavior I’ve ever seen in the software industry

MariaDB’s Howard: Amazon is “strip mining” open-source software. (Photo: MariaDB)

Amazon has been in the crosshairs because the cloud giant sells many services based upon open-source code but is perceived as only a marginal contributor to the community projects that develop it.

Amazon’s tactics are “the worst behavior I’ve ever seen in the software industry and it’s all because of a loophole in the licensing,” said Michael Howard, chief executive of MariaDB Corp., which sells software built upon an open-source base. Howard charged that the cloud giant is “strip mining” by exploiting the work of a community of developers who work for free.

Others, including strong open-source advocates, disagree, saying there’s no loophole and cloud companies aren’t violating any license terms.

“There’s always the risk when you give something away that somebody else will make a million dollars off it,” said Ted Dunning, chief application architect at MapR Technologies Inc., which distributes both open-source and proprietary software. “The test is whether you get pissed or think it’s really cool.”

For its part, Amazon said it complies fully with all license terms. “If a company wants the exclusive right to build a business around the source code, they should make the source code closed and proprietary,” a spokesman said. “Open source software should remain open and free of licenses that make it more encumbered.”

Although Amazon hasn’t historically been a strong open-source contributor, its attitude is changing, added Jeffrey Hammond, vice president and principal analyst at Forrester Research Inc. He pointed to Amazon Corretto, a free distribution of the Open Java Development Kit and Firecracker, a lightweight virtualization service for “serverless” computing that the company debuted at its re:Invent conference last month.

“The criticisms I hear directed at Amazon aren’t that different than the ones I heard directed at Microsoft five years ago, and look how Microsoft has evolved,” Hammond said. “I don’t see any reason for Amazon to not slowly do more around open source to serve the company’s own interests, which isn’t all that different from what the companies criticizing them are doing with recent licensing changes.”

But critics say Amazon’s power is so great that it can effectively block open-source rivals from launching competing services. And they say the effect on the broader open-source community could be devastating. “Developers will say, ‘I won’t even build under open source because AWS is going to take it away from me,’” said MariaDB’s Howard.

Derivative debate

At issue is a provision common to most open source licenses that governs “derivative works,” or software that modifies open-source code. Licenses typically require such modifications to be contributed back to the community if the developer sells or shares the derived software.

An exception exists, though, for modifications that aren’t intended for public distribution. Essentially, as long as the software remains on your computer, you don’t have to share any changes you make.

MapR's Dunning: "There’s always the risk that when you give something away that somebody else will make a million dollars off it.”

MapR’s Dunning: “There’s always the risk that when you give something away that somebody else will make a million dollars off it.” (Photo: SiliconANGLE)

Cloud computing companies don’t technically distribute code. Their creations are consumed as a service and code never changes hands. That exempts them from the need to share changes back to the community, effectively giving them the ability to gain a proprietary advantage from the work of others. For example, Amazon’s Aurora MySQL is based upon the open-source MySQL database management system covered by the GNU Public License.

There have been efforts to address the imbalance, most notably the Affero General Public License, a variation of the widely used GNU GPL that requires organizations that deliver software as a service to give users the option of downloading the modified source code.

But the AGPL and other licenses like it aren’t universally popular in the open-source world. AGPL is “a way to force more software to be open source,” said Dunning, who currently serves on the board of the Apache Foundation which administers the popular Apache 2 license.

“But that wasn’t Apache’s agenda,” he said, noting that his opinions are his own and not those of the Apache Foundation. “Their agenda was to make software more sharable.”

The distinction may seem subtle, but it illustrates the tightrope open-source advocates walk in their efforts to balance a commitment to free software with the growing drive by software companies and their investors to make money.

On the one hand, building businesses on top of open-source products generates revenue that can be funneled back into further development. That’s the case Confluent co-founder and CEO Jay Kreps made in a blog post announcing the license change.

“Many of the people who were eking out small contributions late at night on a pure-passion basis could now get paid to contribute full-time,” he wrote. In raising more than $80 million toward the goal of building a profitable company, he added, “Confluent could fund not just code contributions but also the sizable cloud bill to run the kind of large scale distributed torture tests that are needed to keep a code base stable while scaling contribution from a growing community.”

Changing the rules

Few people on either side of the debate dispute the right of open-source businesses to make money. The question is whether changing license terms is the way to do it.

The three companies at the nexus of the current debate have each gone about the process somewhat differently.

Redis Labs moved portions of its code to a “Commons Clause” license that prohibits third parties from charging fees or offering services whose value derives substantially from its software. Confluent adopted a Community License that prohibits delivery of Kafka in a manner “that competes with Confluent products or services that provide the software.” MongoDB opted for the Server Side Public License, which requires that anyone offering its software as a service to make any modifications and supporting code available as open source.

MariaDB took yet another tack two years ago when it created the Business Source License, which gives developers up to three years to profit from their creations before releasing them to open source. “BSL is not closed in the sense that every BSL product goes back to being open source,” Howard said. “It postpones the impact.”

The proliferation of new license options concerns some people, who say the trend is bound to confuse a market that has spent the last 30 years reaching consensus on a few basic licensing models.

“I’m worried about anything that blurs the boundaries around what the community has defined as the scope of open source,” said Richard Fontana, senior commercial counsel at Red Hat Inc. “I have some concerns over what cloud providers are doing, but my bigger concern is how [Redis, Confluent and MongoDB] are reacting.”

Cloud Foundry Foundation's Kearns: ". It’s your prerogative to change the licensing in order to build a viable business."

Cloud Foundry Foundation’s Kearns: ” It’s your prerogative to change the licensing in order to build a viable business.” (Photo: SiliconANGLE)

Fontana said he’s particularly concerned about contract language that uses open-source terminology to define licenses that are really proprietary. For example, “commons” is a term that connotes resources that are available to all, such as air and water.

But he said the Commons Clause adopted by Redis “is really not a commons in the way we understand it. It’s intended to close the software by tacking a restriction onto a standard open-source license. I worry that’s going to confuse developers.”

But other people say licensing terms have to change with the times and that the process is necessarily messy. “Companies are going to take whatever angle they can take to build a business,” said Abby Kearns, executive director at the Cloud Foundry Foundation. “It’s your prerogative to change the licensing in order to build a viable business on top of that.”

Jakob Freund, co-founder and CEO of Camunda Services GmbH, a Berlin-based developer of open-source workflow automation software, agreed. “It’s in the interest of the developer community to make sure that the companies shouldering the lion’s share of an open-source project effort are not put out of business by a few monopolists,” he said. “I am not sure that every measure we’re seeing right now is the best way to achieve this, but the industry probably needs a few iterations of trial and error to figure it all out.”

In pursuit of profits

The crux of the issue is the continuing struggle of entrepreneurs to build viable businesses based upon assets that are free. Of the many business models that have been tried, the most successful has been to give away a functional product and sell business-oriented proprietary extensions that provide such features as team collaboration, workflow and change management, a strategy common to Redis, MongoDB and Confluent.

But that, too, is a fine line to walk. The trick is to make the software functional enough to create word-of-mouth awareness that drives widespread adoption and attracts the attention of CIOs.

At the same time, developers still need to leave enough room to add the value that will entice that executive to write a check. “It’s a delicate balance because if the open source product is crippled, then people don’t want to use it,” said Kelly Stirman, chief marketing officer at Dremio Corp.

Another increasingly popular approach is to sell managed services that relieve customers of the headaches of installing and managing complex software. But that strategy challenges open-source startups because the major cloud providers have little barrier to entry. “Open-sourcing is a great way to build enthusiasm, but if someone starts to run it at scale you have little recourse,” said the Cloud Foundry Foundation’s Kearns.

Confluent's Narkhede: "We're open to considering a standard solution." (Photo: Twitter)

Confluent’s Narkhede: “We’re open to considering a standard solution.” (Photo: Twitter)

Confluent and Mongo were backed into a corner by Amazon because “there’s not enough perceived differentiation in the cloud service they’d provide versus what AWS would provide,” Stirman said. The result is that “they’re in a ‘frenemy’ relationship with AWS where they’re deploying on Amazon’s platform and competing at the same time,” he said. “I genuinely feel for them because it’s very hard to compete with Amazon on a cloud service.”

The companies understand developers may be concerned. Confluent co-founder and Chief Technology Officer Neha Narkhede wrote another company blog post Thursday that sought to reassure them that most uses of Confluent products won’t be affected.

“We defined our excluded purpose as narrowly as possible to accomplish our purpose,” she said. “If a standard solution in the space emerges, we’re open to considering that.”

Kearns’ organization is based upon another model that has had some success. Nonprofit organizations such as CFF and the Linux Foundation curate a branded code base that members of the community may use under open-source licensing terms provided that they don’t introduce variations, a process known as “forking.”

Foundation members can obtain certification that their distributions comply with a standard, creating a level playing field. The foundation also promotes contributions from all members. “Everyone loves open source but not everyone wants to contribute back,” Kearns said. However, most open-source projects aren’t big enough to support a foundation.

Changing licensing terms isn’t a no-risk proposition. Tightening restrictions may frighten away users who fear violating contract terms, Dunning said. He recalled his own experience years ago when he imposed a “free for noncommercial use” license on some software he had written. “I wanted a piece of the action if anyone was going to get rich,” he said. “What happened was people didn’t use my software.”

The jury is out on whether the latest developments will bring any clarity to the commercial open-source landscape or simply complicate things further. One thing’s certain: The struggle to define a business model that can justify the billions of dollars investors have poured into the market is likely to continue for years to come.

Image: jplenio/Pixabay

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