From Open Source to Proprietary: A Decade of Licensing Shifts in Tech
Open source software forms the foundation of modern technology stacks, but companies built on these principles often face a critical dilemma: how to balance community values with commercial viability. As businesses scale, many find themselves transitioning from open source licenses to more restrictive models—a trend that’s reshaped the tech landscape over the past decade.
Why Companies Shift Away from Open Source
Several key factors drive these licensing changes:
- Protecting revenue streams from cloud providers offering managed services
- Ensuring sustainable business models for investors
- Preventing free-riding by compe*****s
- Funding continued innovation and development
These transitions typically fall into three categories:
- Complete abandonment of open source
- Adoption of less permissive open source licenses (like AGPL)
- Creation of custom, source-available licenses
Notable Open Source to Proprietary Transitions
2013: Movable Type
- Original License: GPL (adopted in 2007)
- Change: Discontinued open source version (MTOS)
- Reason: Limited community adoption and economic viability
“The community has not grown because of MTOS… it does not make any economic sense to continue” — Movable Type statement
2014: SugarCRM
- Original Model: Offered open source “Community Edition”
- Change: Discontinued open source version
- Reason: Failed to effectively serve target markets
2018: The Watershed Year
Three major companies made significant licensing changes:
Redis
- Transitioned from BSD to dual-license (RSAL/SSPL)
- Cited need to prevent cloud provider exploitation
MongoDB
- Shifted from AGPL to SSPL
- Targeted AWS’s managed service offerings
Confluent
- Moved from Apache 2.0 to proprietary Confluent Community License
- Specifically prohibited “as-a-service” competition
2019-2021: Continued Evolution
Cockroach Labs
- Changed from Apache 2.0 to BUSL
- Later consolidated under single enterprise license
Sentry
- Transitioned from BSD to BUSL, then created FSL
- Now advocates “fair source” licensing
Elastic
- Unique case of returning to open source (AGPL) after proprietary period
- Initially changed due to AWS competition
Recent Developments (2023-2024)
HashiCorp
- Moved Terraform from open source to BUSL
- Led to creation of OpenTofu fork
Snowplow
- Shifted from Apache 2.0 to custom Limited Use License
- Aims to fund development while preventing competition
The Future of Open Source Business Models
This timeline reveals an ongoing tension in tech:
- Community vs. Commercialization: How to reward creators while maintaining openness
- Cloud Provider Impact: Hyperscalers continue driving licensing changes
- License Innovation: New models like FSL and “fair source” emerging
As the ecosystem evolves, companies are increasingly seeking middle-ground solutions that balance openness with sustainable business practices—a challenge that will likely shape tech innovation for years to come.
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