Open Source Concepts: Dual Licensing Explained

We were recently faced with a decision: either to let a program that took us one year to code die, simply because we do not have enough time to maintain it, or make it open source.

Open source looked like a good idea for while, but there was one problem. We wanted to keep the software under our control and to be able to make money selling it later. And let us just be honest and admit it: we wanted monopoly over our software and why not? It took us one year to write the software, and its documentation. Yeah we believe in 'Free Software', but who works for free. Free software can never be successful in the long run, if there is no way to make money.

Dual Licensing and GPL:

Then we said to each other: 'Hey, RedHat and MySQL are open source. Still they make lot of money. How?" The answer lies in the strategy known as 'Dual Licensing'. It is very simple. The Open Source company first has to copyright the source code, and then make it available to public. Now, since the company owns the source code copyright, it can distribute it under two different licenses: one open source and the other commercial. The open source license in such case will almost always be GNU GPL (General Public License), which allows anybody to modify the source code, redistribute it and incorporate it into other projects. However, there is one catch (a big, and annoying catch). The restriction is that any project that uses GPL'd code must also be released under the GPL license (GPL, we believe, works like a virus. It keeps on spreading). Which simply means (regarless of what open source ativists tell you), you cannot sell the GPL'd code or any project that incorporates it for profit. For that purpose, you will have to offer a commercial license.

Some well known companies that use Dual Licensing are: RedHat Inc, MySQL, AB., Sleepycat among many others. These companies one hand attracts people and developers who want to move the Open Source movement, and on the other, they want to make some serious money with dual licensing.

Let us look at an example: a guy was creating a commercial database application that was intended to bring him some cash. He used MySQL database at the backend, thinking it was free. He later found out that he violated the GPL license that MySQL uses. Anybody is restricted from distributing an application that uses GPL in modified or unmodified form unless the whole project is licensed under GPL. So that guy was left with no choice, but to buy commercial licenses (based on per copy) from MySQL, AB.

Is Dual Licensing Evil?

Yes. But there is nothing wrong with it. If no product revenues are coming in, the project will eventually die or will always be in a very bad shape (a lot of open source evangelists might try to contradict us and compare open source with religion, which it is not). In other words, if a guy is not making money from a project why in the hell would he keep supporting it. An example of one such software is PuTTY (with apology to Simon Tatham). Even though it is immensely popular, it still leaves a lot to be wished for. The User Interface is meager, the documentation is of low standard and there is no (customer) support. Strange for a very popular software.

Now if PuTTY was released under dual license, it might have been a lot different than it is now. The PuTTY company would have expanded, hiring new people and giving customer support. That did not happen and the result is that PuTTY is not used in large corporations who prefer commercial software with customer support and someone to blame if anything goes wrong. For example, Vandyke SecureCRT, Whitehorn Secure Terminal or Celestial Telnet are some popular commercial SSH clients.

So you mean Open Source is bad? Why people go open source then?

No. It is not. The number one advantage of open source is that it can cut the development time by as much as 50%. The other reason why people go open source is to make sure that project will always stay alive with the help from development community (many commercial software applications die in their first year). Some people participate in open source development just to make a name for them.

The bottom line is that Dual Licensing is not as evil as many people think it is. It is the only way to go if you want to make money from your open source project. We would like to end this article with a line from the infamous 'Open letter to hobbyists' written by Bill Gates: "Nothing would please me more than to be able to hire ten programmers and deluge the hobby market with good software."

DISCLAIMER: All information given in this article is provided on 'AS IS' basis. The author's do not assume any responsibility for any consequences and do not swear that the information given in this article is accurate. This article is not affiliated with any organization. This article can be distributed and redistributed as long as Author's names are not changed and the original text remains intact.

Ali Mansoor (malimansoor@hotmail.com) has written several famous commercial applications. Umer Mansoor (umer.mansoor@gmail.com) spends most of his time programming or thinking about money making schemes. He is inspired by his Dad, God, Microsoft, and more recently, Google. Visit his open source project page at: http://www.pegsol.com/newdesign/development.htm

Note from the authors: No we are not nerds or geeks and we define FREE as in 'free beer', not as in 'free speech'. Cheers..