Open Source Software and Business Implications

February 1, 2011

Open source software (OSS) is defined by Wikipedia as:

Computer software that is available in source code form for which the source code and certain other rights normally reserved for copyright holders are provided under a software license that permits users to study, change and improve the software

Business Applications

Most of the application software used in the everyday running of businesses is typically offered as ‘closed source’ software, this means that users can operate the software, but are not licensed to inspect, modify or improve it.  However, the use of open source software in business is continuing to gain steam.  OSS itself is generally free, the main cost being its configuration, and support.  As such it can be an extremely cost effective means of getting a project underway.

WordPress, an open source Content Management System which facilitates the setting up and managing of blogs and websites, is increasingly prevalent, and for simple sites can reduce the cost of establishing an online presence considerably.  One of the staple business applications in use worldwide, Microsoft Exchange,  is now facing competition from an open source alternative, the German-based Open-Xchange, and we are likely to see further deployment of open-source alternatives to other business applications as similar projects become more robust over time.

Licensing Implications

While open source offers a number of benefits over closed source software, including considerable community support, and increased lead time due to the reduced development costs of new projects, businesses often fail to appreciate the associated licensing implications.  If existing OSS is incorporated into a  new project, licensing restrictions often require that project to be released under a similar licence, and some OSS attracts a licensing fee if it is used for commercial purposes.  It is therefore prudent to take precautions early on.

Prior to incorporating OSS into products it is important to consider future plans for the business.  If control is paramount, and central to monetizing the product, then it may not be an appropriate option, although some licences do allow for incorporation into closed source applications.  Awareness is most likely the key to long term success, if further down the line you want to keep options open, clarify your requirements early on, and take care to understand the licensing terms applicable to any work you might incorporate.