Dual-licensing

Dual-licensing is the practice of distributing software under two different sets of terms and conditions. This may mean two different licenses, or two different sets of licenses. Software is sometimes offered under more than two licenses, in which cases tri-licensing or multi-licensing may be a more accurate term.

When software is dual-licensed, recipients can choose which terms they want to use or distribute the software under. The distributor may or may not apply a fee to either option. The two usual motivations for dual-licensing are:

• license compatibility - which help solves many legal aspects involved in distributing and interfacing with other systems.
• market segregation based business models - which will will be the topic of this article.

Business models

This is commonly done to support free software business models. In this model, one option is a proprietary software license, which allows the possibility of creating proprietary applications derived from it, while the other license is a copyleft free software/open-source license, thus requiring any derived work to be released under the same license. The copyright holder of the software then typically gives away the free/open source version of the software at no cost, and profits by selling licenses to commercial operations looking to incorporate the software into their own business.

Since in most cases, only the copyright holder can change the licensing terms of a software, dual licensing is mostly used by companies that wholly own the software which they are licensing. Confusion may arise when a person outside the company creates additional source code, using the less restrictive license. Because the company with the official code is not the copyright holder of the additional code, they may not legally include this new work in their more restrictively licensed version. Companies may demand outside developers agree to a contributor license agreement, before accepting their work in the official codebase and source code repositories. [1]

Dual licensing is used by the copyright holders of some free software packages advertising their willingness to distribute using both a copyleft free software license and a non-free software license. The latter license typically offers users the software as proprietary software or offers third parties the source code without copyleft provisions. Copyright holders are exercising the monopoly they're provided under copyright in this scenario, but also use dual licensing to discriminate the rights and freedoms different recipients receive.

Such licensing allows the holder to offer customizations and early releases, generate other derivative works or grant rights to third parties to redistribute proprietary versions all while offering everyone a free version of the software. Sharing the package as copyleft free software can benefit the copyright holder by receiving contributions from users and hackers of the free software community. These contributions can be the support of a dedicated user community, word of mouth marketing or modifications that are made available as stipulated by a copyleft license. However, a copyright holder's commitment to elude copyleft provisions and advertise proprietary redistributions risks losing confidence and support from free software users. [2][3]

Impact on the organizational structure

This type of business model has some important impacts on a project organization structure and its future community. As this business model assumes that you remain to hold full copy rights to the softwares code so you will have to require your contributors abandon or sell their copy rights. This often becomes a demotivating factor in the open source community which decreases its activity making the project more reliant on paid workers. This of often an aware choice done by companies that want to remain to have full control over their open source project by choosing the In-house development organizational structure. This combination has a couple of big success stories like Trolltech with the Qt project and MySQL AB with MySQL which both have now been acquired by large IT corporations. O the other hand many members see the dual-license business model to prevent projects from using the full potential of the open source development model.

Companies and projects

One of the two most notable companies to use this business model are Trolltech and MySQL AB with the projects:

• Trolltech: The Qt developers toolkit which was previously dual-licensed by Trolltech on the GPL and a commercial license. Now after the acquisition by Nokia which added the LGPL [4] license it is tri-licensed.
• MySQL AB: The MySQL database software is available on the GPL and a EULA license.

Although both companies have been acquired by bigger companies (Trolltech by Nokia, MySQL by Sun a.k.a. now Oracle) their stories are on of the biggest commercial success of open source. This made the dual-licensing business model viewed as one of the most effective open source models at the time. [5] See the Trolltech and MySQL AB articles to read about the impressive growth those companies managed to work out by the past years.

References

1. Digium Incorporated. "Asterisk Guidelines, The contributor license agreement". Retrieved on 2009-02-10.
2. On the Netscape Public License by Richard Stallman
3. FSF's Opinion of the Apple Public Source License (APSL) 2.0
4. Nokia to Add LGPL to Qt Licensing Model - official announcement on 2009-01-13
5. Open Life: The Philosophy of Open Source, Henrik Ingo, 2006