Open-core model

The open-core model is a business model that uses proprietary software or services to create products or services that leverage the value of open-source software. Coined by Andrew Lampitt in 2008,[1] the open-core model primarily involves offering a "core" or feature-limited version of a software product as free and open-source software, while offering "commercial" versions or add-ons as proprietary software.[2][3]

"Open core" and "COSS" redirect here. For the open-source hardware community, see OpenCores. For railway term, see Controller of site safety.
For broader coverage of this topic, see Business models for open-source software.
GitLab Community Edition

Open-core product offerings always center on an open source core. However, they differ in two important ways. Some open-core models leverage open source software that is a separate and independent community project (such as Confluent, which leverages Kafka), and some leverage open source software that is primarily developed and stewarded by the same company (such as Redis Enterprise, which leverages the Redis core). Where the open source core and commercial offerings are developed by the same company, sales of the commercial offering are used by the company to fund further development of the open source code.

Also, open-core models vary in what kind of additional software or services they add to the open source code in their commercial offerings: additional features, plug-ins, support, custom development, software-as-a-service access, hardware, or commercial advantages such as warranties and indemnities. Some instead provide commercial customers with a time advantage, releasing the latest updates of the open source core first to commercial customers and then to the publicly available open source project. Open-core can refer to all these models, but its most common form is licensing additional features and functionality under proprietary licenses.[4]

The concept of open-core software is controversial in the open source community, because many open source advocates do not consider the business model to be consistent with the true spirit of open-source software development. Despite this, open-core models are used by many open-source software companies.[5] Particularly in the late 2010s, the open-core model has produced many highly successful software companies, such as Redis Labs, Confluent, and Elastic Search, and is considered by venture investors to be a preferred model for businesses developing open source software.[6]

Use of contributor license agreements

Most open-core products require contributors to sign a contributor license agreement, which grants the company an unlimited, non-exclusive license to use the contributions in both the open source core and proprietary products. In contrast, most open source products employ a license in = out model, with contributions being provided to the project under the same open source license that grants rights to all recipients. While open source projects also sometime use CLAs, they often impose limitations requiring the licensee steward of an open-source project to make the code available only under open-source terms, thus protecting it from becoming privatized.[7][8][9]

Examples
  • Kafka, a data streaming service under the Apache 2.0 license, is the open-source core to the company, Confluent, which offers its commercial product under the Confluent Community License, a source-available license that governs additional features in the Confluent Platform.[10]
  • Cassandra, an open-source database under the Apache 2.0 license, is the core to the company, Datastax, which issues enterprise subscription license for additional management and security features inside DataStax Enterprise.[11]
  • Instructure's Canvas learning management software.
  • Oracle's MySQL database software is dual-licensed under a proprietary license, and the GNU GPL; proprietary versions offer additional features and enterprise support plans.[12]
  • Elastic's core, which includes Elasticsearch, Kibana, Logstash and Beats, is under an Apache 2.0 license, while additional plugins are distributed under Elastic's own proprietary license.[13]
  • Eucalyptus, private cloud software, has a proprietary enterprise edition which provides additional features.[14][15][16]
  • GitLab CE (Community Edition) is under a MIT-style open source license,[17] while GitLab EE (Enterprise Edition) is under a commercial license.[18]
  • Neo4j CE (Community Edition) is under GPLv3, while Neo4j EE (Enterprise Edition) is under a commercial license, providing additional features including clustering and hot backups.
  • Redis is under a 3-clause BSD open source license,[19] while Redis Labs offers Redis Modules under a Source-available software license, and Redis Enterprise under a commercial license which provides additional enterprise features such as on-the-fly scaling, replication performance tuning, and clustering support for Redis Modules.[20]

Open Core and Dual Licensing

Open core models and dual licensing (or multi-licensing) are similar. However, dual licensing, in the form made popular by MySQL in the 1990s, is different from open-core. Dual licensing offers a single software product under a choice of two licenses, usually the GNU General Public License or GNU Affero General Public License for the open source option, and a conventional end user or OEM license for the proprietary option. The use of a strong copyleft license as the open source option is key to the dual licensing model, because the desire to avoid the copyleft conditions creates an incentive for customers to negotiate for a proprietary license instead. In contrast, open-core model offer two or three elements of a larger product, each under a different license. The additional features outside the open source core often enable deployment of the software at scale, and are therefore the combined product is often called an enterprise versions, as compared with the open source community version. For open-core, the most common open source license is the Apache License, a permissive license.

Restrictions on Use in Services

A new variation of the practice emerged in 2018 among several open core products intended for server-side use, seeking to control use of the product as part of a service offered to a customer. These practices, in particular, target incorporation of the software into proprietary services by cloud application service providers such as Amazon Web Services, but with what vendors perceive to be inadequate compensation or contributions back to the upstream software in return.[21][22]

MongoDB changed its license from the GNU Affero General Public License (a variation of the GPL which requires that the software's source code be offered to those who use it as a service over a network) to a modified version of the GNU General Public License version 3 titled the "Server Side Public License" (SSPL), where the source code of the entire service must be released under the SSPL if it incorporates an SSPL-licensed component.[23] Bruce Perens, co-author of The Open Source Definition, argued that the SSPL violated its requirement for an open license to not place restrictions on software distributed alongside the licensed software.[21] Several major Linux distributions dropped MongoDB after the change, considering the new license to be discriminatory against commercial use.[23][24]

Redis Labs made its Redis plugins subject to the "Commons Clause", a restriction on sale of the software on top of the existing Apache License terms. After criticism, this was changed in 2019 to the "Redis Source Available License", a non-free license which forbids sale of the software as part of "a database, a caching engine, a stream processing engine, a search engine, an indexing engine or an ML/DL/AI serving engine".[25][22][26] The last versions of the modules licensed solely under the Apache License were forked and are maintained by community members under the GoodFORM project.[21]

gollark: Bold of you to assume that.
gollark: SQLite is probably one of the most popular libraries ever, but it's also very well-maintained, so not that.
gollark: Hmm, what things are there which are very widely used, mostly ignored, and require maintenance... I could look at some arch package update logs.
gollark: I thought that had lots of contributors.
gollark: It's probably something incredibly boring and yet important.

See also

References
  1. Phipps, Simon (July 2012). Open Source Strategies for the Enterprise. O'Reilly Media. ISBN 978-1-4493-4117-6.
  2. Riehle, Dirk (2009). "The Commercial Open Source Business Model". Value Creation in e-Business Management. Springer Verlag. pp. 18–30.
  3. Wasserman, Anthony I. (2011). "How the Internet transformed the software industry". Journal of Internet Services and Applications. 2 (1): 11–22. doi:10.1007/s13174-011-0019-x. ISSN 1867-4828. Some companies have only a single version of their software, while others follow an “open core” model, providing a community release of the core version, and offering proprietary premium features using a commercial license.
  4. Meeker, Heather. "PolyForm and Open Core". Copyleft Currents. Retrieved 14 August 2020.
  5. "Open Core Debate: The Battle for a Business Model". Linux Insider. Retrieved 28 March 2013.
  6. Jacks, Joseph. "The $100 Billion+ Commercial OSS Index (COSSI)". COSS Media. Retrieved 14 August 2020.
  7. "MySQL mistake is a wake-up call on open source ownership". InfoWorld. 21 June 2013. Retrieved 11 September 2015.
  8. "FSFE welcomes KDE's adoption of the Fiduciary Licence Agreement (FLA)". 2008-08-22.
  9. "6.1 Copyright Papers". Retrieved 2011-01-03.
  10. "Confluent Community License FAQ". Confluent. Retrieved 2019-09-09.
  11. "Product Specific License Terms | DataStax". DataStax: Active Everywhere, Every Cloud | Hybrid Cloud | Apache Cassandra | NoSQL. 2018-02-21. Retrieved 2019-09-09.
  12. "Open core or dual licensing? The example of MySQL". The H. Retrieved 11 September 2015.
  13. "War Unfolding for Control of Elasticsearch". Datanami. 2019-03-12. Retrieved 2019-09-09.
  14. Bort, Julie (18 April 2012). "This Startup That Angered A Lot Of Open Source Fans Just Got $30 Million In Funding". Business Insider. Retrieved 19 February 2016. It was one of the first commercial companies to champion a concept called "open core."
  15. Bort, Julie (22 June 2010). "Marten Mickos says open source doesn't have to be fully open". Network World. Retrieved 19 February 2016. "We deliver a fully functional cloud with Eucalyptus software. You can download it on a GPL v3 license. But, additionally, we provide enterprise features only if you pay for them ... it's open core," he says.
  16. Jackson, Jacob (25 August 2010). "Eucalyptus Strengthens Its Back End". PCWorld. Retrieved 19 February 2016. To make money, Eucalyptus Systems uses an open-core business model, offering one version of the software free through an open-source license and selling a commercial version with support and additional features ...
  17. "CONTRIBUTING.md · master · GitLab.org / GitLab Community Edition". GitLab. Retrieved 2018-06-05.
  18. "GitLab Enterprise Edition license change". GitLab. 2014-02-11. Retrieved 2018-06-05.
  19. "Redis license and trademark information". redis.io. Retrieved 2018-08-24.
  20. "Licenses". Retrieved 2018-08-24.
  21. "In 2019, multiple open source companies changed course—is it the right move?". Ars Technica. 2019-10-16. Retrieved 2019-10-16.
  22. "When Open Source Software Comes With a Few Catches". Wired. ISSN 1059-1028. Retrieved 2019-08-01.
  23. Vaughan-Nichols, Steven J. "MongoDB "open-source" Server Side Public License rejected". ZDNet. Retrieved January 17, 2019.
  24. "MongoDB's licensing changes led Red Hat to drop the database from the latest version of its server OS". GeekWire. January 16, 2019. Retrieved January 17, 2019.
  25. Vaughan-Nichols, Steven J. "Redis Labs drops Commons Clause for a new license". ZDNet. Retrieved 2019-08-01.
  26. Baer, Tony. "It's MongoDB's turn to change its open source license". ZDNet. Retrieved 2019-08-01.
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