Apache License as a Business Model:

Challenges and Opportunities

Paul Fremantle, CTO, WSO2pzf@apache.org

(with a LOT of help from Sanjiva Weerawarana, CEO, WSO2)

Why am I talking to you about this?

• Apache Member– Been contributing to Apache since 2000– VP, Apache Synapse– Incubator, HTTPComponents, WebServices, QPid,

etc• Co-Founder of a company based around the

Apache License– WSO2 – Founded in 2005– Selling software licensed under ASL2.0

Business Model How do you get people to pay you money

when all your software is available under the Apache license? Consistently

A good chunk of people who use my stuff pay me Frequently

Hopefully every year and not just once Scalably

The more you use my stuff or the more of my stuff you use, the more you pay me

Apache and Apache License

Two options• Company X

– Building software that has no relationship to Apache

– Other than the License

• Company Y– Building software

AROUND Apache Projects and code

– Also under ASL2.0

Of course there are other options!

Bait and Switch

How to bait and switch• Release some software under ASL

– But keep the good bits back:• Clustering• Management• Performance

• Put some code under GPL– And offer a commercial EULA license for that

Opportunities

Challenges

Apache License – challenges

• Challenges– Getting Started

• Persuading investors– Establishment

• Brand management• Converting free to pay

– Ongoing• Protecting against leeches

Investor concerns• Who has “made it” with an Apache

License?• What assets and IP do you own?• If you are based on Apache projects how

do you associate yourself with Apache?

Who has made it?• No-one (YET!)

– Gluecode was not a real business when it sold

• Covalent goes both ways• Every major IPO or sell

has used GPL/LGPL– JBoss, MySQL, Redhat

Libraries vs Servers vs User apps

How do you respond?• Mission Critical apps need real support• Offer more value than just code

– Support, consultancy, expertise• Brand

– Leadership, Expertise, Successful projects• Technology Partner

Assets• If the code is available under the ASL

where is the IP?– People – committers– Brand– Customers

Presence• You can’t abuse Apache

– Or the Apache Ninja’s will get you

• Techniques– Certified distributions

• E.g. FuseSource– Value-added products (still ASL)

• E.g. WSO2– Marketing

• E.g. A booth at ApacheCon

Brand Management• You still can’t abuse Apache

– Apache owns the Apache brands• Contribute a lot

– But you still need to leave enough room for a community

Create another brand

Getting users to pay

If you want that use the GPL!

Volume Game• Be the first OSS provider in

a given space• Huge numbers of

downloads• Get a small proportion of

users to pay– MySQL, JBoss, Redhat

Those days are over

FOSS 1.0 is over• Every technical area has multiple OSS

projects– Just look at Apache projects– 0.1% conversion rates are no longer going to

win– Proprietary vendors often have “bait and

switch” style OSS offerings

FOSS 2.0Show real business value to

customers

Showing value• Go beyond low-end support• End-to-end relationship

– Training, Consultancy, Full Enterprise Support

– Become a mentor not just an implementor

One further value• Very few open source projects offer

backports of fixes– Trunk and latest build or nothing

• Even fewer (if any) offer patches

• In proprietary software customers pay to upgrade

• In OSS, customers pay not to upgrade

Leeches• Companies offer to support “any” project

– No committers– No involvement in the project– No contribution

Leeches are bad for Open Source

• Open Source businesses need to make enough money to improve the projects

• Per incident support and leeching are harmful to the projects

• Particularly harmful in Public Sector– Many customers MUST take the lowest bid

What about the opportunities?!

Benefits of Apache License• Business Friendly

– There are companies that will not touch other licenses

• Great for OEMs• No nasty tricks

– No timebombs

The problem with Bait and Switch

• Customer installs OSS to try it out• Builds their application or proof-of-

concept• Now you want them to pay

–AND re-install!– Maybe even re-code for the enterprise

version

Summary• Contrary to the beliefs on Sand Hill Road,

you can build a business on ASL• Need careful brand management• Customers might even pay you!

Questions?