Apache makes its first $420 million

Others and I have made much of VMware's acquisition of SpringSource for $420 million, but one crucial point has been overlooked: this is the first big acquisition of a company that depends on the Apache license.

Yes, we've seen smaller acquisitions of open-source companies that rely on Apache-style licensing. IBM acquired Gluecode (Geronimo project), SpringSource bought Covalent (Tomcat), Oracle acquired Sleepycat (Sleepycat, BSD license), and there have likely been others that I'm simply not remembering.

But the big, head-turning deals? GNU General Public License (GPL). Every one of them.

Nearly every other big open-source acquisition, from JBoss ($350 million) to MySQL ($1 billion) to XenSource ($500 million), has involved the GPL. Even Zimbra ($350 million), while not GPL, fits the mold because it used an attribution clause with an MPL license that was designed to accomplish GPL-esque ambitions.

The GPL has been prominent for good reason. It's accepted wisdom in the commercial open-source crowd that it's difficult to directly monetize Apache-licensed software, and that the GPL, what with its capitalist urge for control, is a better tool for the financially inclined.

The SpringSource acquisition turns this "wisdom" on its head.

Perhaps this is because our notion of "monetizing open source" has expanded, as Eric Barroca astutely argues. The GPL is great for dual-licensing and support-based businesses, but it's not very adept at incorporating proprietary software in the way that IBM does, for example, or Day Software, as Kevin Cochrane notes.

In other words, we're getting beyond open source as a religious coda, the secret handshake that makes one part of The Club, and instead are focused on building businesses that provide greater transparency and value for customers. I suspect we'll therefore see more Apache and less GPL going forward, with companies contributing significant parts of their product/business to open source, while delivering the rest via proprietary licensing.

IBM already does this. So, frankly, does Microsoft (though still to a small degree). I think we'll see a lot more.

The reason is that customers have never been as religious about open source as the vendors/communities that develop it, a lesson I was taught by a crowd of CTOs in New York and which is highlighted in a recent Enterprise Systems Journal article.

But it's also a function of open source's growing importance in the software ecosystem. As more money pours into open source--IDC projects $8.1 billion in open-source revenues by 2013--there will be increasing pressure to make it pay, as InfoWorld recently wrote:

As the open source market continues marching away from its roots--the lone developer who creates a useful product as a labor of love--appreciation for the idealism that lies at the GPL's heart is diminishing. Businesses that view open source development as a path to a profitable future rather than as an altruistic mission are increasingly balking at what they view as the license's excessively restrictive aspects concerning code improvements.

Such thinking, among other considerations, led Appcelerator to drop the GPL for Apache, and I believe we'll see more. We just had a significant demonstration that you can make money with Apache-licensed software. SpringSource was doubling sales every year with Apache, and had a $420 million outcome as a result of both its sales and its community, which may be easier to come by with an Apache license than GPL, at least for commercial open-source projects.

It's telling, for example, that InfoWorld's attempts to interview Richard Stallman, founder of the GPL, were stymied by his "demand(ing) control of what (InfoWorld) published." You don't grow a community with that emphasis on control of the outcome.

IBM proved long ago that it's possible to build billion-dollar businesses with Apache. But SpringSource is the first start-up to suggest that Apache isn't simply a way for big companies to create complements to proprietary cores. Sometimes an Apache core is worth something, too. At least $420 million, by SpringSource's reckoning.

Follow me on Twitter @mjasay.

[shay_banon]

I am still on the fence, to be honest, with Apache vs. GPL (and its variants). SpringSource can also be used as an example of a company that was built on Apache, but changed to GPL for its tc server and dm server lines.

Maybe there is a difference between a framework and a server. With a framework, it makes much more sense to do Apache. Servers, on the other hand, might make more sense with GPL.

I will be the first one to happily see Apache used all over. The question is, until the acquisition comes, can you make money off Apache? Or more precisely, can you make more money from GPL than Apache?

As always, confused when it comes to OS licenses,
Shay

p.s. I develop an open source framework under Apache license

[Thad Boyd]

"It's telling, for example, that InfoWorld's attempts to interview Richard Stallman, founder of the GPL, were stymied by his "demand(ing) control of what (InfoWorld) published." You don't grow a community with that emphasis on control of the outcome."

Um...didn't you spend most of the article pointing out that the GPL has a much bigger community than the Apache license?

Sure, maybe you're right and that may change, but that's just hypothetical. The GPL has done a perfectly good job of developing a community despite -- or perhaps because of -- being viral.

[hutchike]

Don't forget the LGPL which is very easy to incorporate into proprietary software, and hence doesn't meet with resistance from within organizations like the regular GPL might. ExtJS is a good example of a core library that's free and without limitations, and an enhanced framework that is pure GPL (or you can pay to remove those limitations).

[pentest]

Why on earth would a company pay for Apache licensed code? You aren't buying anything that you can't get much cheaper. I can take that code that they spend billions on, and compete directly with them, with the same code base. Granted, me working alone isn't a threat, but another company can grab the source, pick off a developer or two with a lot of experience in the project and you are in business. The GPL is a much friendly business license, because competitors can't take your work, add to it and sell it, WITHOUT giving back the improvements. With Apache, you can do what you please with it, and so can your competitors.

Maybe I am missing something import, but to me, anyone that buys Apache licensed code needs their head examined. Now, getting the program for free and buying support is one thing, that makes sense. But this? Geez.

[billburke]

Unless you're doing a duel-licensing scheme with GPL like MySQL does, the license you pick doesn't matter much whether or not its a runtime (application server) or framework (library). What matters the most in professional open source is the strength of your brand.

[wrecks47]

Matt, Sleepycat's Berkeley DB was not under the BSD license. It was (and still is at Oracle) under the Sleepycat public license which is functionally equivalent to the GPL. This is what enables dual licensing.
Rex Wang
VP Product Marketing Oracle
(former VP Marketing Sleepycat)

[tdyer]

yeah...except Spring isnt only Apache Licensed. for instance if you try and download tc server you get

http://www.springsource.com/license/tcServer

not quite Apache 2.0 is it? I thought that Spring had actually gone with the GPL and remember Rod Johnson (great porn name btw) specifically saying that jBoss screwed up by not going GPL. He was concerned at the time that Oracle would take his code, add a management console and release it as closed source. This was at the same time when they declared they would only be supporting releases for 3 months or some such thing.

I cant remember because I switched to Seam pretty quickly. Haven't felt a need to go back.

[billburke]

Another question to ask is, is this really a big win for Apache? Or just for the ASL license? Really have we seen a successful business being launched on a project hosted by Apache.org? This all leads to my general point that Apache.org is a horrible place to build a business.

[pelegri]

Hyperic and dmServer are GPL; there might be other pieces in S2 that are GPL, I haven't looked.

[billburke]

FYI, commented on this on my blog here: http://bill.burkecentral.com/2009/08/13/your-oss-license-is-mostly-irrelevant/

and

here:

http://bill.burkecentral.com/2009/08/16/success-for-apache-or-for-asl/