Proprietary can learn from open source licensing world, especially for the cloud

Proprietary licenses have evolved greatly since it was initially forged by IBM and Microsoft many years back. Every proprietary vendor has their own unique license and the royalty model can come in many different forms.

By Chamindra De Silva



Revenue for the proprietary vendor can be licensed proportional to the number of users, nodes, processors, bandwidth consumed or an annual subscription model. Furthermore each vendor has their diverse models of discounting that can result the licensee in a complete state of confusion if he does not seek proper legal advice.  Unfortunately software licenses lives in the nexus between a legal document and technical jargon, which often renders either profession incapable of deciphering the actual right of the licensee. There have been times when I have found that even the sales team of the vendor is somewhat unclear. Standardising the licensing models is certainly something the proprietary world can learn from the Open Source and Open Content world. Over 50% of the Open Source projects fall under one license, the GPL and the other common one Open Source ones LGPL, Apache, BSD are used across at least thousands of Open Source projects.

With such pervasive use, this greatly simplifies the problem of understanding licenses. Compound with that is the most Open Source licenses are kept extremely simple. The BSD license is but one paragraph that would hardly take a quarter of a document.

Unfortunately, if the proprietary world does not move into standardising their license models, they are soon going to be left behind as more applications get deployed in the cloud, with providers like Amazon and Rackspace.  This is because the cloud model is on-demand model. You pay as you use and the cloud decides how many resources are needed to serve you need. This might mean it needs more processors, nodes and users per node and this need to happen flexibly and dynamically for it to work.

As there is so much diversity in the proprietary licenses this becomes very complex as applications are often build from multiple components. If each component has a different revenue model, it becomes very hard to meter the total usage to charge the client in turn.

Open Source licenses do not suffer this fate as such limitations are against Open Source principles of freedom and thus you have any number of users, processors, bandwidth usage, nodes all at the same base cost for software, zero.

So my recommendation to the proprietary world is simply to standardise and reduce the complexity of licensing such that more focus can be given to the value of the product or risk being left behind in the cloud world.

(Chamindra de Silva is head of Strategic Initiatives, Global Technology Office at global IT services company Virtusa and the Director of Sahana – Open Source Disaster Management Project, which was founded following the Asian tsunami of December 2004. He has been involved in open source for many years and has made award-winning contributions to free and open source software, particularly in the area of disaster management as the Sahana Project Lead. Connect with Chamindra on www.facebook.com/VirtusaCorp)