What is open core licensing (and what isn’t) UPDATED

This is an updated version of a post that was originally published in July 2009. It has been updated in response to ongoing confusion about open core licensing.

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 closed source licensing.

There remains considerable confusion about exactly what the open core licensing strategy 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 strategy. As he himself admitted, he “invented nothing, just articulated it”. Credit goes to Barry Klawans and Paul Doscher (Jaspersoft co-founders), as Andrew noted.

In fact our research indicates that the formation of companies using the open core licensing strategy had already peaked by the time the term was coined – but more on that another day.

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 “all of 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 (and more specifically, given recent statements, not all strategies that involve copyright agreements are open core – more on that another day as well).

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 closed source 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 (or proprietary relicesing, as some like to call it, or indeed “selling exceptions”). The important thing to note is that in the dual license strategy a single code base is available under an open source or closed license, while with open core the closed source licensed code is a superset of the open source code. Both result in closed source software, but only in the open core strategy is the closed source version functionally different from the open source version.

  • The MySQL strategy is not open core (yet)

One of the reasons for the confusion is that MySQL originally started out with a dual license model but changed over time to the subscription revenue model, and flirted with open core. At this point the strategy for MySQL remains dual licensing. It remains to be seen whether the MySQL Server code for Enterprise Edition 5.5 will be different from Community Edition with the inclusion of MySQL Enterprise Backup (which would make it open core) or if the new capabilities will be delivered as a subscription service.

  • Subscription strategies are not open core

Although they are a step in that direction. The subscription model provides vendors with a mechanism to distribute value-added features to paying customers. Until now the additional capabilities in MySQL Enterprise (such as Enterprise Monitor) have been delivered as a service via the MySQL Enterprise subscription. Although the code for Enterprise Monitor has not been made available, we would see this strategy as distinct from open core since open core results in a product with a different code base, where as the MySQL Server code in Enterprise and Community is the same. To differentiate from regular support subscriptions I have used the term value-added subscription to refer to this type of subscription. Other examples include Canonical’s Ubuntu Advantage and Nuxeo’s Connect. I would also put Red Hat Network and JBoss Operations Network in this category, although the source code for those value-added services was originally closed, it has now been made available as open source (as previously discussed).

  • Open foundation 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 closed source software packages and hardware products. There is a fine line between the two, but as I previously explained while open core involves offering proprietary extensions targeted at a segment of the open source project user base, open foundation involves using open source software to create entirely new products, targeted at a different user base.

  • 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, and by Andrew Lampitt (more amusingly) as open crust. We have adopted the term open edge to describe this strategy and have seen it adopted by a small number of players beyond Microsoft.

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30 comments ↓

#1 451 CAOS Theory » 451 CAOS Links 2009.07.10 on 07.10.09 at 6:51 am

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#2 EOS Blogs » Blog Archive » Why Enterprises do care about Open Core on 07.14.09 at 6:30 am

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#3 451 CAOS Theory » Microsoft contributes to Linux kernel: a CAOS Theory Q&A on 07.20.09 at 11:58 am

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#4 Deschis celor deschiși on 07.21.09 at 1:21 am

A break from the ordinary…

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

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[…] 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 Open Core or Open Snore? [OStatic] | BYOHosting.com Blogs on 10.02.09 at 8:20 am

[…] 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. […]

#7 451 CAOS Theory » Strength of support models and symbiosis for free and open source software on 10.02.09 at 12:53 pm

[…] 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 Has SpringSource rejected the open core business model? « rand($thoughts); on 01.19.10 at 10:16 am

[…] 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 What Is Hot In Open Source? (weekly) | Open@Krishworld on 02.06.10 at 7:36 pm

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[…] 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 […]

#11 451 CAOS Theory » Dual of denial – on the success and failure of dual licensing on 03.01.10 at 9:10 am

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

#12 Open core is not open source | OpenLife.cc on 06.23.10 at 11:11 am

[…] 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 Debatte: Open Source am Scheideweg » t3n News on 07.21.10 at 8:04 am

[…] 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 you can do to help get rid of open core | OpenLife.cc on 07.26.10 at 4:56 pm

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#16 451 CAOS Theory » Fear and loathing and open core on 10.18.10 at 11:34 am

[…] delivered fully packaged with a specific definition, courtesy of Andrew Lampitt. As I previously noted, you have to wonder whether many of the people that use the term open core regularly have even read […]

#17 Henrik Ingo on 10.20.10 at 8:00 am

Quote: The MySQL strategy is not open core (yet)

I disagree with this. I’m still not quite sure why you insist on this, but at least the following is factually incorrect:

Quote: Until now the additional capabilities in MySQL Enterprise (such as Enterprise Monitor) have been delivered as a service via the MySQL Enterprise subscription.

The MySQL Enterprise Monitor is not delivered as a service, at least not if you mean the common usage of a web service (SaaS). It is a product customers download and install on their own computers. It is not possible to use it as a service hosted by someone else. At least a few years ago, Mårten would consistently try to de-emphasize this by consistently labeling MEM as a service, to escape the awkward accusation that MySQL was selling closed source (the term open core was not in wide use yet), but it is not SaaS just because Mårten says so. (In a way he was right, they are not selling it, they are renting it. If anything, that’s even worse 🙂

If you already were aware of the above fact, then I simply don’t agree with where you want to set the boundaries for open core. You seem to be saying that if the closed source code is a separate executable, it is not open core, but if they run in the same executable then it is. So if I understood you correctly, if the monitoring agents were installed as plugins to MySQL server rather than alongside it as a separate executable, then you would label the exact same code, with exact same licenses, producing the exact same results as open core?

I don’t see why a choice of software architecture should be the significant divisor. From the end user point of view that makes zero difference. This would also have weird consequences on different technology platforms (for instance, all apps in a J2EE app server run in the same process, but are conceptually separate apps).

Personally I prefer that the most useful variable to focus on is the product name or brand to make this categorization. This makes sense for end users (open core is criticized for misleading them) and from a software freedom point of view (it is easy to answer the question “Is X open source/open core?) In this case, the product family known under the MySQL brand is quite clearly open core.

In any case, even by your own definition MySQL Enterprise Monitor, the main product sold by MySQL/Sun/Oracle is open core. Since the introduction of the Query Analyzer, it is based on the GPL MySQL Proxy, with closed source addons. They run in the same process, just the way you want 🙂

henrik ingo
PS: Using my definition of open core being a function of how the brand is used, makes it difficult to categorize EnterpriseDB. Yes, they add closed source code into PostgreSQL, but under a separate brand. Otoh now they are increasingly riding on the PostgreSQL brand. Intuitively they are also open core, but they seem to escape my definition.

#18 Matthew Aslett on 10.20.10 at 9:21 am

Hi Ingo,

I’m going to try and avoid disappearing down a rabbit hole where we end up trying to define what is a “service” or what exactly constitutes “MySQL”. I will simply state that my position is this: if the version of MySQL Server that users get with MySQL Enterprise is the same as the version of MySQL Server that users get with MySQL Community and everything else is a deliverable of MySQL Enterprise subscription (which I understand to be true – but happy to be corrected) then to my mind it is not open core licensing (this is not the case in examples I would say are open core). However, I agree that to the user the difference is academic. If you want to divide the world between free and not free then open core is not the way to do that.

Matt

#19 Henrik Ingo on 10.20.10 at 12:34 pm

So if we disregard software freedom and end users for a while, what is the difference from a business model point of view between MySQL and SugarCRM/JasperSoft/…?

– You have a FOSS version available for free
– You have a paid for version that is not FOSS
– You sell the latter with the message that it has more features

Also from a business point of view, I just don’t see any difference in the strategy, approach to sales, marketing… that would depend on the chosen software architecture.(For instance with Open Foundation and Open Edge I do see a clear distinction.)

#20 Matthew Aslett on 10.20.10 at 1:25 pm

Personally I see a difference between

1/ a subscription arrangement that delivers an open source server and additional features for which the source code is not available

2/ closed source software (of which an open source subset is separately available) delivered via subscription

I fully admit this is probably largely academic, and from a sales and marketing standpoint there is really not much difference in the strategy.

We also see versions of open core in which you have a paid version where the source code is made available to paying customers, just not under an OSI-approved license, so there are various ways in which you can combine the various strategy elements.

#21 Henrik Ingo on 10.21.10 at 2:56 am

Just a small comment: If the commercial version is made available with source, but not under an OSI approved license, then it is still not open source :-). If the product is such that it commonly requires customization, such a strategy may present advantages to the customer, but from an “open source business strategy” point of view the conclusion is still the same: the commercial product is not open source. So yes, it is a variation, but not by much.

#22 Matthew Aslett on 10.20.10 at 3:10 pm

I don’t think I explained myself very well above. The key point is this: products are not open core, companies are not open core. Open core is a licensing strategy employed by companies for products.

Open core relies on dual licensing to enable a superset of the codebase that is closed source, or to look at it another way, a subset that is open source.

The description above does not apply to MySQL Enterprise/Community. Oracle dual licenses MySQL to enable customers to use MySQL as an embedded database in closed source software, but the MySQL Server code in MySQL Enterprise and MySQL Community is the same.

Therefore Oracle is not using open core licensing for MySQL Server at this time (although from your description they may well be using it for other components that are delivered within MySQL Enterprise).

Clearly companies use different licensing strategies for different open source components in their products. For the purposes of our analysis we examine the dominant strategy. Others may look at things differently.

#23 Henrik Ingo on 10.21.10 at 3:09 am

Yes, this explanation is better 🙂

As for which is MySQL’s dominant strategy, by the time I left MySQL had 2 different licensing strategies, which were about 50/50 in importance. (The subscription business was set to outgrow the dual licensing business, but the Oracle came so I’m doubtful if it’s still growing anymore.)

For the OEM market, a non-GPL license is sold. These customers however do not receive the monitoring tools at all, it is only sold to end users. This is very classic dual licensing.

For the subscription, the subscription is the product. Like you say, “MySQL Enterprise Server” is identical to “Community Server” and it is GPL. It is just labeled differently. (There used to be small differences, but it was always GPL.) Yet, the subscription as a product contains proprietary software bits, that then are used together with the server. (But none of them at this point are plugins to the server, if you insist.) Like I explained before, in many different ways, the software that comes with the subscription is open core.

Looking at my explanation above, I think you could claim that dual licensing is MySQL’s dominant business, which you are focusing on, and in that offering indeed there is no open core involved. (Although InnoDB HotBackup often is sold alongside the OEM license, let’s ignore that.) But I’m not sure the dual licensing business is dominant anymore, and in any case even if the ratio is 51/49 I don’t see why one would ignore the 49%.

#24 Henrik Ingo on 10.20.10 at 10:41 am

For completeness: I forgot that this Spring Oracle published also closed source plugins for the JDBC and PHP connectors (to send statistics to MEM). So with your definition you could still argue that MySQL server is not open core, but you can’t really connect to it without open core connectors anymore 🙂

#25 Matthew Aslett on 10.21.10 at 3:33 am

Henrik,

WordPress seems to have run out of nests…

Yes I agree the subscription is the dominant revenue generator when it comes to MySQL, but dual licensing is the dominant licensing strategy. This is a prime example of why we evaluate these separately to come up with an overall picture of the business strategy.

I have to admit MySQL is one of the most complicated to evaluate.

And just to clarify, I agree that source code not under OSI-approved is not open source FOSS. We treat this the same as a closed source approach in our evaluations, despite their being benefits such a customization and walled-garden community

#26 Henrik Ingo on 10.22.10 at 7:47 am

Yes. Actually, I’m not trying to argue with you, I’m just making sure none of the details get lost 🙂

If it is of any consolation, MySQL is also one of the more difficult projects to version control or compile 🙂

#27 Matthew Aslett on 10.22.10 at 2:04 pm

Yes, I realise – appreciate it.

#28 Jaspersoft – Page One PR – Public Relations and Social Media in Silicon Valley on 10.21.10 at 3:16 pm

[…] The 451 Group What is open core licensing (and what isn’t) UPDATED […]

#29 Graziano Sorbaioli » Linux-2.6.36-libre: turning Linux’s Free Bait into Free Software on 11.08.10 at 8:17 am

[…] to go with it. http://alampitt.typepad.com/lampitt_or_leave_it/2008/08/open-core-licen.html http://blogs.the451group.com/opensource/2010/10/20/what-is-open-core-licensing-and-what-isnt/ http://www.fsf.org/blogs/rms/selling-exceptions Sad to say, Linux fits the definition of Free Bait […]

#30 451 CAOS Theory » Is MySQL open core? on 11.11.10 at 12:16 pm

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