The document provides an overview of open source software licenses and business models, highlighting the growth of commercial open source companies like Red Hat and MongoDB. It emphasizes the need for a clear business model to guide license choices, discussing different avenues for monetization, including services, dual licensing, and SaaS. Additionally, it touches on the importance of community and governance in open source projects, as well as trends in license usage.

1. Open Source Software
Licenses and Business
Models Explained
Peter Zaitsev,
CEO, Percona
June 14th, 2022

2. Great
Momentum for
Commercial
Open Source
• RedHat $34B (acquired IBM)
• MongoDB $16.3B (public)
• GitHub $5.9B (acquired Microsoft)
• Databricks ($38B private)
• Elastic $8.6B (public)
• Hashicorp $5B (public)
• Confluent $5B (public)
• Cloudera $5.3B (private)
2

3. Open Source
and You
3

4. What are your
Goals Being
Involved with
Open Source ?
4
“Just for
Fun”
Make it A
Career
Make a
Difference
Build a
Business

5. Is there Existing Project ?
• Is there existing Project you’re working on or are you looking to start a project
to meet your goals ?
5

6. Open Source
Project vs
Product
6
Almost any code on Github can be called Open Source
Project
Many Projects are focused on their Developer(s)
Developers write the code they feel like writing
May not care about documentation, compatibility, QA
May not care about user and customer support

7. Product –
Commitment to
Users and
Customers
7
Clear Licensing
Lifecycle, Defined
Compatibility,
Upgrade Path
Builds/Packages
Documentation
Free or Commercial
Support, Bug/Issue
Handling
Security Issues
Remediation
Quality Assurance

8. How does it sound ?
Not Every Developer is interested in doing what it takes to do the Open Source
product (or building a team what does it)
8

9. Business Model Not
Required
You may chose to just to focus building the project on your own or
company time, and not try to make it into the Product and Business
9

10. If Project Becomes
Successful…
If you do not build business around it… someone else
will
10

11. Open Source
Business
Models
© 2020 Percona 11

12. Model First, License
Second
Your Business
Model will
drive
appropriate
license
choices
12

13. Open Source is
not a Business
Model
Marten Mickos
13

14. Business and
Open Source
Building Business around Open
Source Development Model and
Open Source Distribution Model
14

15. Does not Have to
be Both
15
“MongoDB was built by MongoDB.
There was no prior art. We didn’t open
source it for help; we open sourced it as
a freemium strategy”
https://www.cbronline.com/interview/mongodb-ceo-interview

16. Open Source
Distribution
Model
16
Github
Distributions
Part of Other Project

17. Open Source
Development
Model
17
Code Contributions
Testing/Bugs
Ideas
Documentation

18. Open Source Community
• Open Source Community can be Uniquely Strong and Loyal
18

19. Open Source for
Marketing
19
“Open Source” is a positive
Project Users are more likely to
promote it for Receprocity
Easier to Market your Product for Free

20. Business Models:
The Outcome
20
BUILD A BUSINESS AND
EXIT FOR $10B
MAKE A GOOD LIVING FOR
MYSELF AND FEW FRIENDS

21. Big Exit
21
Product Focused Business
Creating IP
Building Anti-Competitive Moats
Obsessing with Scaling
Raising Capital often Required
“Open Source” takes a backseat

22. Lifestyle Business
22
Can be Service Business (Product Possible Too)
Proceed at your own pace
Easier to focus on “Open Source”
Easier to Bootstrap

23. Distribution vs
Monetization
23
Distribution Focus – Focus on Growing
Number of Users of your Open Source
Software
Monetization Focus - Focus on
Converting Users to Customers and
Increasing amount of $$ Customers Pay

24. Distribution/Monetization Conflict
Amazon RDS for MySQL is great for growing number of MySQL users but not so
great for Oracle to be able to monetize MySQL
24

25. Open Source
Business Models
Overview
© 2020 Percona 25
Services (Consulting and Engineering)
Support and Managed Services
Dual Licensing
Advanced Commercially Licensed Version
SaaS
AD Supported

26. Consulting and
Custom
Engineering
26
Easy to Get into
Relatively Low Margin
Non Recurring
Hard to Scale

27. Support and
Managed
Services
27
Recurring
Generally Better Margin
Easier to Scale
Medium Investment to start

28. Dual Licensing
28
Product Based
Sell Commercially Licensed version of
product for those who can’t comply
with terms of Open Source License

29. Enhanced
Commercial
Version
29
PRODUCT BASED ENHANCED COMMERCIAL
VERSION OF THE PRODUCT
IS SOLD
TYPICALLY PACKAGED WITH
ADDITIONAL BENEFITS AS
SUBSCRIPTION

30. SaaS
30
SaaS version of software is commercially
available
Can be paired with “Freemium Model”
In most cases SaaS version is not 100%
Open Source

31. AD Supported
31
May Also Include Functionality
to Remove Ads for a Fee
Open Source version Includes
Ads

32. Multi-Choice Answer
I is typical for Companies to have more than one Business model at play at the
same time, with focus on 1-2 primary models
32

33. Go To Market
33
Selling to End Users
Large volume
Small/Medium Average Deal Size
Inexpensive/Quick Sales Process
Selling to Enterprise
Low Volume
Large Deal Size
Expensive/Long Sales Process

34. Ownership/Governance
• Community/Foundation Governed Product
• Linux, PostgreSQL, Kubernetes, Drupal
• Single Company Governed Product
• MySQL, MongoDB, Nginx
34

35. Licenses for
Open Source
Software
© 2020 Percona 35

36. Warning
I am not a lawyer. This is my
understanding, which should
not be seen as legal advice
© 2020 Percona 36

37. Open Source
37
OPEN SOURCE IN
SUBSTANCE
OPEN SOURCE FOR
MARKETING
https://www.theregister.com/2022/03/17/court_open_source/

38. Truly Open Source
• OSI: https://opensource.org/osd-annotated
• GNU: https://www.gnu.org/philosophy/free-sw.en.html
• DEBIAN: https://www.debian.org/social_contract#guidelines
38

39. Free Software –
Four essential
Freedoms
39
https://www.gnu.org/philosophy/free-sw.html

40. Open Source Business
Monetizing Truly Open Source Software is Hard
40

41. Openness Choice
Permissive
Open Source
License
• Maximize
Distribution
Copyleft
Open Source
License
Source
Available
License
Proprietary
Software
• Maximize
Monetization
41

42. Types of Open
Source
• Can modify software (create
derived work) and do whatever
you want with result, including
licensing it commercially
Permissive
• If you modify software you
need to distribute all the
changes under the same license
Copyleft
42

43. What is typical in
the Ecosystem ?
43
Linux – GPL
Kubernetes - Apache 2.0
PostgreSQL - PostgrSQL License

44. License/Model
Fit
44

45. Consulting and
Custom
Engineering
45
Permissive Licenses work Great
More Adoption – More Business
Public cloud SaaS is not major
Competition

46. Support and
Managed
Services
46
Can work well with variety of License
Types
More concern on competition from
Hyper Scale Cloud Vendors

47. Dual Licensing
47
RELIES ON OPEN SOURCE
LICENSE LIMITATIONS
TYPICALLY COPY-LEFT (AND
SOURCE AVAILABLE) LICENSES

48. Enhanced
Commercial
Version
48
Different Strategies can be employed
The more “full featured” your “Open
Source” version is the more need for
Copy-Left or Source Available Licenses
If “Open Source” is severely limited it can
be Permissive

49. SaaS
• To prevent competition from Hyper-Scalers Source Available Licenses are often
used
49

50. AD Supported
• Can work with Any License
50

51. Trend:
Permissive vs
Copyleft
51
https://resources.whitesourcesoftware.com/blog-whitesource/open-source-licenses-trends-and-predictions

52. Current Trend:
Raise of Source
Available
Licenses
52

53. “Combination”
• How do you expect your software to be “combined” with other Open Source
and Proprietary Software by Users ?
53

54. Marketplaces
54
Many Marketplaces do not allow AGPL
license
Apple Appstore does not allow GPL

55. License and
Copyright
55
As Copyright Holder you can change
license at any time (for new versions of
software)
If you want to have those rights ensure
to have contributors agreement which
grants you those

56. Open Source and Trademark
• Licenses are different in their relationship to Trademark. Think through your
Trademark Policies separately from the license
56

57. Open Source and Patents
Open Source Licenses differ in their Patent grants. Newer licenses tent to be more
specific about their Patent grant.
57

58. Need More
Protection ?
Consider Polyform Project instead of writing your own license
58
https://polyformproject.org

59. Summary
59
Decide on what
your Goals are
1
Pick Business
Model to Reach
them
2
Pick Open
Source
License(es) to
support it
3
Contribute to
Open Source as
much as you
can 
4

60. Thank you, Let’s Connect!
https://www.linkedin.com/in/peterzaitsev/
https://twitter.com/PeterZaitsev
https://peterzaitsev.com