Apache License as a Business Model: Challenges and Opportunities Paul Fremantle, CTO, WSO2 (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 2.0 Show 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?