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What is Open Core Licensing (and what isn’t)

Matthew Aslett, July 8, 2009 @ 11:35 am ET

There has been a significant amount of interest in the Open Core Licensing strategy since Andrew Lampitt articulated it and its benefits for combining open source and commercial licensing.

There remains considerable confusion about exactly what the Open Core Licensing model is, however, which is strange since the term arrived fully packaged with a specific definition, courtesy of Andrew. Recently I have begun to wonder whether many of the people that use the term Open Core regularly have even read Andrew’s post.

I feel somewhat responsible for this given that our Open Source is Not a Business Model report was partly responsible for the increased use of the term Open Core, and since I remembered that it was this post about commercial open source strategies that prompted Andrew to define Open Core in the first place.

Additionally, since business models related to open source are evolving constantly, I thought it was worth revisiting the definition of Open Core and putting it in some context.

What is Open Core?
According to Andrew’s original post it is a licensing strategy whereby a vendor combines proprietary code with open source code, where “the commercial license is a super-set of the open source product, i.e., it offers premium product features that you will not see in the GPL license”.

At first Andrew was very specific about the use of the GPL license and a development model dominated by a single vendor. However, it quickly became clear that a company like EnterpriseDB, which provides proprietary extensions on top of the community-developed, BSD-licensed PostgreSQL database, also fits the general model.

Therefore, Andrew clarified that there were Vendor Controlled (VC) and Community Controlled (CC) variants on Open Core.

Incidentally, Andrew did not create the Open Core model. As he himself admitted, he “invented nothing, just articulated it”. Credit goes to Barry Klawans and Paul Doscher (Jaspersoft co-founders), as Andrew noted.

What isn’t Open Core
Sometimes it is easier to define what something is by explaining what it isn’t. Open Core is a commercial open source strategy, but just as “Alma Cogan is dead, but only some of the class of dead people are Alma Cogan”, not all commercial open source strategies are Open Core. So, to clear up some apparent confusion:

  • Red Hat’s strategy is not Open Core

Red Hat reserves support and features for paying customers, but it does not do so using commercial licensing (a prerequisite of Open Core). Instead Red Hat gives away the source code but withholds the compiled, binary version for paying customers.

(N.B. Beware companies claiming to be following “The Red Hat model” as they invariably aren’t – most often I find they mean that they use a subscription revenue model. Very few companies have copied Red Hat’s model for a variety of reasons – a subject I’ll leave for another post.)

  • Dual licensing is not Open Core

In fact, as Andrew Lampitt explained in his definition, Open Core is a variant of Dual Licensing. The important thing to note is that in the Dual License model a single code base is available under an open source or commercial license, while with Open Core the commercially licensed code is a superset of the open source code. One of the reasons for the confusion is that MySQL originally started out with a Dual License model but changed over time towards Open Core (via the subscription revenue model).

  • The subscription revenue model is not Open Core

Although it is a step in that direction. The subscription model provides vendors with a mechanism to distribute value-added features to paying customers. That needn’t necessarily be commercially licensed software, although if it is, that would fit the description of Open Core.

  • Embedding open source is not Open Core

Vendors such as IBM, Cisco, Oracle and SAP (in fact just about every software vendor) include open source code within larger commercial software packages and hardware products. There is a fine line between the two, but as I previously explained there is a significant difference between building proprietary extensions on an open source project and plugging open source code into a proprietary software package. The simplest way of thinking about it is that while one takes a bottom-up approach to commercialization, the other is top-down.

(N.B. I have previously referred to the licensing strategy that enables an embedded open source model as “Open-and-Closed” but since this, and the term embedded, are potentially confusing, I am on the lookout for alternatives. “Open Inside” is one option. Any others?)

  • Microsoft’s open source strategy is not Open Core

Microsoft is undoubtedly making use of more open source and encouraging open source development on its platforms, but its strategy is by definition not Open Core since it is extremely unlikely the core will ever be open source. In fact, as previously discussed, Microsoft’s strategy turns the Open Core strategy on its head by encouraging open source development around a commercial core, and has been described by Microsoft as Open Edge, Matt Asay as Open Complement, and by Andrew Lampitt (more amusingly) as Open Crust. Personally I prefer Open Edge.

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Comments (14) Categories: Business models, Software

14 Responses to “What is Open Core Licensing (and what isn’t)”

  1. [...] Speaking of which, following our clarification on the Open Core model, Carlo Dafarra reported on the evolution of Open Core, noting that [...]

  2. [...] Aaron Fulkerson for example explained how Open Core helped him to improve his business model. Matthew Aslett clarified the definition of the model. Open Core described the strategy to keep the central [...]

  3. [...] a strategy it describes as ‘Open Edge’ (which we have previously mentioned here and here. Whereas Open Core is used by commercial open source vendors to offer proprietary extensions to [...]

  4. A break from the ordinary…

    „ REDMOND, Wash., July 20, 2009 — Today, in a break from the ordinary, Microsoft released 20,000 lines…

  5. [...] the lessons of what works and what doesn’t. Take, for example, the recent discussions around Open Core (see Andrew Lampitt’s original post), Open Edge and other business models around open source. [...]

  6. [...] the lessons of what works and what doesn’t. Take, for example, the recent discussions around Open Core (see Andrew Lampitt’s original post), Open Edge and other business models around open source. [...]

  7. [...] a good, fresh perspective on open core without running through the baggage of the term’s definition and implications, see John Mark Walker’s latest take on open core. While we at 451 Group have [...]

  8. [...] and best known open source vendors have shifted away from support subscriptions to variations of an open core business model.  However, Matt used data from VC investments in open source companies to suggest: [...]

  9. [...] 451 CAOS Theory » What is Open Core Licensing (and what isn’t) [...]

  10. [...] conjunction with copyright mechanisms as they apply to a single open source codebase. This view is supported by my analyst colleagues over at the 451 [...]

  11. [...] licensing are “essentially the same thing”. As Stephen argues, and we have previously clarified, they are not the same thing at [...]

  12. [...] of open source business models (which this isn't, but whatever…), I nowadays usually refer to the 451 group's Matthew Aslett, but for a complete historical picture I should note (as Matthew does) that open core licensing was [...]

  13. [...] unauffällig geschehen, wie bei den „dual-licensing“-Beispielen, aber weitaus häufiger sind „Open Core“-Ansätze. Ein extremes Beispiel ist SugarCRM, das mit der Version 6.0 als wesentliche Änderung [...]

  14. [...] What is Open Core Licensing (and what isn’t) [...]

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