PLM and Open Source Licenses

PLM and Open Source Licenses

I want to talk about licenses. The topic I’d normally prefer to avoid. Deelip Menezes made a good post about Sales and Licensing of software. However, I want to talk about specific part of licenses – Open Source and Free Licenses. I don’t understand the subtle differences about various types of Open Source Licenses. The discussion about licenses usually lead to long conversations with legal eagles and I feel myself very unsafe in these conversations. The following article cough my attention – Google Code accepts all OSI licenses. I recommend you to have a read an interview with Chris DiBona.

Google has announced its Google Code developer site will now host open-source projects using any license approved by the Open Source Initiative (OSI). Previously, as part of its longstanding protest against “license proliferation,” the web giant only allowed projects using a small subset of OSI licenses. Google still doesn’t like license proliferation, but it’s embracing more licenses, nonetheless. “We think we’ve made our point [about license proliferation] and that this new way of doing things is a better fit to our goal of supporting open source software developers,” reads a blog post from Google open-source guru Chris DiBona.

Few years ago, Open Source was absolutely not an option for enterprise organizations. However, life changed these days. Open source is discussed and many people are trying to innovate in this space in order to find the right answers from various standpoints – technical, product, portfolio and legal. So, I decide to spend some time talking with you about what could be an appropriate open source licensing option for PLM world.

Free and Open Source Licenses

This is a good read about the history and background about the comparison between various available Free Software Licenses and Open Source Licenses. There are two organizations related to this matter – Open Source Initiative (OSI) and Free Software Foundation (FSF). There is some overlap between them. You may take a look on the comparison of Free Software licenses by navigating on the  link.

Open Source Initiatives

Navigate your browser on the following link. You can see available open source licenses approved by Open Source Initiative. What was interesting to me is to see categories of licenses such as Popular, Redundant and non-Categorized. The last contains quite many licenses. Also, there is also a category for non-reusable license. Website contains information about OSI license review process. I recommend you to spend some time on this site.

Free and Open in PLM World

Aras is the only one company I know in PLM world promoting the ideas of Open Source and Free licenses. Aras introducing their way for Open Source – Aras Enterprise Open Source. This is the explanation I found on Aras’ website.

…Our [Aras] approach was to combine multiple software formats, OSI-compliant open source, community source and commercial platforms, in a mixed source structure to provide the assurance necessary for business-critical solutions while delivering the flexibility for collaborative innovation. We [Aras] call it enterprise open source.

It is interesting that I didn’t find any reference to Aras on the Enterprise Open Source directory website. According to the information provided here, the website contains about 140’000 references on enterprise open source projects.

What is my conclusion? The Open Sournce licensing story is damn complicated. However, with a growing interest and influence, understanding of available open source and fee software licenses will be crucial. I’d be interested to hear about your experience and to know your opinion about that.

Best, Oleg

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  • Hi Oleg,
    My biggest question about Open Source is: “Does it help the Software industry?” there are pros and cons but overall do you think it is a good thing for the software industry? I’ve read some comment from Microsoft on Open Source, somes are rude but they are not stupid. When you exchange sources without monetizing it is it good ?
    I’m not giving any answer here. I would just like to have an analysis about that.
    As Open Source solution attracts people with its free sharing format. and with the fact that you need to reach a certain size of community to have a working OS solution. Don’t you think we might be reducing the number of small projects people could do on a commercial licence. The Apps store maybe are the solution for these commercial platform.
    I think we need some real analysis (financial and social) from both side.
    Best,
    Yoann

  • beyondplm

    Yoann, Very interesting thoughts… Why people are starting to write open source. I think, fundamental reason is to have an ability to exchange ideas in a free way. When you code is not commercialized, you can exchange your ideas and keep your business with customers separately. However, this is not a bullet proof. Therefore, lots of people are arguing if this is a viable option in the computer world we live now. I think, number of open source experiments is growing, and we’ll see some “fruits” along the way. Thanks for commenting! Best, Oleg

  • I think i already posted that, but this is totally related and makes people think about open source: http://en.wikipedia.org/wiki/Open_Letter_to_Hobbyists (direct link to bill gate’s letter : http://upload.wikimedia.org/wikipedia/commons/1/14/Bill_Gates_Letter_to_Hobbyists.jpg )

  • You say exchanging ideas or source code in a free way. If the exchange is fair, it means that you give as much as you take. In this perfect case, why not monetizing it. So for both people it is the same they give and take 100$ for example. But from an external person it means: “if i develop this thing it could be worth 100$”.
    My whole idea is that Open Source scientist doesn’t make young people dream about developping software. “Hey kid what makes you dream, Bill gates? Cristiano Ronaldo? or some Open Source guy we don’t know about?”

  • MarcL

    This is a great discussion although really doesn’t get at the licensing points in the post. It makes me think about the underlying motivations and incentives of open source as a development approach and how that fits with associated business models.

    In the not so distant past many, many people were developing lots of products and then try to sell them and only a very few could make money selling licenses. The only difference with open source is that one must take an ‘indirect’ monetization approach.

    The same is true with Web 2.0. Lots of people working on lots of Web sites, only a few Google and Facebook type success stories or even medium successes (cloud accelerates ‘winner takes all’ type outcomes).

    It has always been difficult to build a business in software and probably always will be. However, what open source does is make trying easier and less required up-front investment for the developer.

    Now, developers and entrepreneurs can build software products, Web sites, etc at any level of the stack without paying for the infrastructure. They can sell those applications without the customer having to buy a bunch of other products as well.

    OSS opens the door to leveraging much more than just code/free software, ideas are much more easily exchanged, inspiration comes faster, combining products to make full solutions is easier than ever before and more cost effective.

    This opens a whole new opportunity landscape. The laws of the capitalist jungle will still apply, but we are all reaping the benefits of these collective advancements, sometimes in unanticipated ways.

    The hope of this promise, the lower barriers to trying, the potential for ever greater innovation, the ability to leverage others work to build something better than you could alone, and the key is then to figure out how to build a business or make a living.

    For those not really familiar with how pervasive open source is or the background, here’s a link to a nice overview http://vospe.com/2010/09/22/a-brief-history-35-years-of-open-source-software-a/

    Just what I believe and my 2 cents, for what it’s worth.

    MarcL
    http://www.aras.com

  • beyondplm

    Yoann, I understand what you are saying. In my view, life is changing, and it means that new forms of software distribution were born over the last 10 years. Many people, especially in consumer software space, see selling software as “unfair”. It doesn’t mean software has no cost. It just means that there is a demand for a completely new cost structure. Think about your TV. It contains some software code for sure. However, you are not requested to pay for this… Does it make sense? Best, Oleg

  • beyondplm

    Marc, Interesting thoughts… thank you! I believe we might see some shift in the structure of paid/free software/hardware. Actually, I believe, the change is under going last 10-20 years of Linux-related development. We probably can see a shift towards paying indirectly for software when buying hardware and other computing devices. It will be interesting to see this trend influence in the enterprise software, which is completely different from “consumer” soft. Best, Oleg

  • Well, I disagree on the fact that very few people were able to sell licences. It is still the main way for editors to make money. I wonder how many Red Hat like project we can find?

    There are different Open Source solution regarding the moment in development when they become Open Source. The solution that starts with an OSS dev Team and a public repository. (Red hat i guess) The solution that are developped privately and then released Open Source (Nuxeo is a french ECM made like that) and the solution which were on a classic license and became OSS (usually get forked after a few month).
    For the lower size of SMBs Open Source means free. And usually they want software that makes exactly what they want without having to customize it.
    If you had all the necessary dev ressources, and you could develop a solution that doesn’t need any customizing and for which an upgrade wouldn’t bring much added value, would you do it Open Source?
    Does OpenOffice earn money?

    My guess based on many meetings with SMB. If you come to a company with a solution that needs to be customized, then OSS is a fair deal by eliminating an upfront cost for a product that is not ready.
    But if the product doesn’t need any change (microsoft Office) the company is completely willing to pay a classic licence.

    What is the biggest evolution in selling Software recently? OSS? I think it’s more Apps Stores from Apple and Google. (and soon a Prodeos MarketPlace for small add-ons !!! lol)

    I’ll try to do an Oleg’s like diagram to clarify my though.

    Once again, I’m not against Open Source, I just think it doesn’t replace anything it just has a specific purpose. What i’d like to investigate is: how does it impact the general revenu of Software market ? Does it create sometime some unfair competitions?

  • MarcL

    Yoann – This is a great topic and I agree with many of your points. Open source enables individuals to do things they wouldn’t have otherwise been able to do (call it “ability to express one’s self”). That has nothing to do with earning a living. When using an open source format in business, there are conscious decisions that need to be made with respect to goals & objectives, licensing, business models and more.

    At Aras we sometimes get criticized for not being “true” open source because we take OSI-style open source and combine other source formats to create an offer that achieves new advantages for companies. These criticisms tend to be from purists / ideologues (or competitors) and have little to do with how the business operates.

    In our view it is OK to have open source on top of proprietary and vice versa. Also, OK to charge for a bundle instead of a piece. To charge for related products and services while others are freely available. In addition, people can charge for something totally unrelated built using open source that provides a service or capability (this is what Google does). This combination can be tricky to figure out and is important to ‘get right’ in order to run and grow a business over the long term.

    I agree open source is not a silver bullet or an answer to everything. One must understand objectives, plan accordingly and adjust as needed to optimize for market conditions.

    From a historical perspective Open Office was never conceived of as a money making product. It was started and subsidized by Sun as a way to adversely impact Microsoft’s cash cow Office. Appears to be much the same type of motivation as DraftSight by Dassault… hit Autodesk where it hurts in 2D and where DS doesn’t have significant revenue at risk (although DraftSight is not oss, it is distributed for free).

    These are different purposes and objectives than entrepreneurs which want to build a business.

    To me, open source presents particularly powerful benefits to global enterprises, especially for large scale enterprise software systems – control over your own destiny, avoidance of lock-in and substantial cost advantages. For small companies that want somethin’ for nothin’ it’s a different story, and presents a different challenge for the entrepreneur to monetize.

    From an impact on the software business perspective the oss approach provides a new vehicle to re-orient the marketplace so that big, mega-vendors don’t dominate forever and ever. Competition is good for the market and good for customers… tends to be bad for the sellers in power who just want the status quo gravy train to continue.

    Again, only my 2 cents… and that’s all.

    MarcL
    http://www.aras.com

  • Sorry to continue a little bit more. Marc, I think the Sun and Dassault examples of delivering free software against commercial solution is a very important fact. Out of the software industry, that would be illegal. It’s a basic rule of capitalism used to regulate the market. If a competitor can prove that you sell a product with loss on purpose he can sue you. And i suppose it is more the case in the US than in Europe (Even if Europe made enormous progress on market regulation). The Aras case is not the same as you can prove that a Real profitable Business Model exist on this particular software.
    I think there should be real investigator making sure that no Open Source project is done by one company without a profitable Business Plan.

  • here’s my quick reflexion on “why you should use an Open Source license” it’s just what i have in mind. could be all wrong ! 🙂
    http://www.prodeos.fr/wp-content/uploads/2010/09/OpenSourceOrCommercial.jpg

  • MarcL

    Yoann – It’s important to clarify, I know for a fact that at least Dassault has profitability as a requirement for long term operation of DraftSight (can read more here http://raykurland.com/2010/08/26/aaron-kelly-explains-the-business-model-for-draftsight/). Don’t know the specific business plan for Open Office, but would figure similar.

    As you know, any capital intensive development process requires that a product run ‘unprofitably’ overall for a period before breakeven. The fact that a large company invests in development and then offers a product for free is not anticompetitive because it offers optional services at cost or at a profit. Dassault is basically trying to re-define the playing field under Autodesk’s feet and has a long term view on the investment time horizon before they see breakeven and overall profitability of the product line. That motivation is fundamentally different than the motivations/objectives of an individual trying to make a living.

    Big companies use this strategy all the time and it is not considered anticompetitive by authorities. It’s at the heart of business competition and good for customers.

    The anticompetitive laws typically target situations where a company is offering a product for less than the cost of the materials / cost to ‘produce’. In software and on the Internet, this get’s challenging to figure out because there is zero cost to “produce” the next copy of the software (copy the bits, not even a CD print required anymore).

    MarcL

  • Thanks mark for clarifying. I thinks these competition rules will create a lot of studies in the next decade. limits of freedom on internet, fair competition on software,… Software and web industry has really raised some important question.
    Interesting time…

  • beyondplm

    Yoann, I agree at the point that OSS seems to be desired when customization is required. As pre-req it assumes you have a skilled team. However, nobody can prevent you from OSS software to be just downloaded and used. Tnx, Oleg

  • beyondplm

    Mark, I think you are mixing two things- OSS and free. Despite the fact, it is usually happening the fundamental ideas are different, in my view. Free is just a business model and marketing. You can decide to build your business and market strategies relies on FREE and it is okay. However, OSS came from a different place. OSS is a mix of community development, feeling of unfairness to pay for software and demand to have free and reliable software platforms. Just my opinion… Oleg

  • beyondplm

    Yoann, It is about FREE, not about OSS. I think, this is a big difference as I just mentioned above to Marc. Best, Oleg

  • beyondplm

    Marc, Yoann, I will try to come with my visual diagram… Tnx, for this excellent discussion! Best, Oleg

  • Hi Oleg,

    I just listened to this short segment on public radio. It makes some interesting points on the original intent of copywrite law and how it relates to the GPL. http://www.onthemedia.org/transcripts/2010/09/24/05.

  • beyondplm

    Tom, Thanks for sharing it. I’m taking off back to US… so, will take a look at home already. Best, Oleg

  • MarcL

    Oleg – I agree that OSS and free are different, come from different places, community development, etc. However, to Yoann’s wondering about impact on the software industry from a business/financial perspective, the two formats have a lot in common in that they get rid of the up-front license fee. And that causes a new revenue structure, not license-based ‘pay and you get’ but indirect monetization.

    OSS presents a wide range of additional benefits for companies and individuals alike, and presents a series of opportunities that just ‘free’ software does not. However, in the context of the discussion here I have been mixing them because the two both cause a restructuring of the value equation in the industry and shift the financial picture as Yoann seems to suggest. Hope this helps.

    MarcL

  • beyondplm

    Marc, in my view, FREE is the simplest model to re-structure sales. This is what you’re calling – to remove upfront licenses-fee. However, the biggest question if PLM industry can adopt OSS as a community-based development form. What is important in the last one- to create open and free PLM platform, like Linux. Watching other groups and PLM industry activity, I don’t think it is possible, for the moment. FREE is pretty much achievable. Aras is doing very interesting job, but I see you guys mostly focus on FREE model, rather than on Open Source. Just my thoughts… Oleg

  • MarcL

    Sure thing, my comments have been in response to Yoann’s questions about the software industry overall… which have similar impact from both free and OSS – business / financial implications.

    Regarding ‘community-based development’ in PLM, it sounds like you are focusing on people working on the ‘guts’ of a system whereas we are much more oriented toward people collaborating on the business processes, best practices at the application layer. This goes on a lot with Aras.

    One of the big problems we see in PLM is that companies spend all of their time and money coding the ‘guts’, run out of budget or run into complexity issues and aren’t able to get to the really important business process improvements that justified the system in the first place. This is where there is a high degree of variation from company to company, and they need to be able to quickly and easily modify PLM processes, make improvements and share best practices across the company and even between companies (where it makes sense and is not competitive). This kind of OSS collaborative development is occurring today and continues to increase. It’s really powerful don’t you think?

    We feel like it has the potential to be game changing for companies around the world and is where we are putting our emphasis. Hope this helps.

    MarcL

  • beyondplm

    Marc, you pointed on the right topic. Too much effort focused on “Platform” things and very less on solutions. With the option to have an open source platform (not like Aras :)), a community will re-focus on solution development. Don’t you think so? Best, Oleg