The Great Open Source Reversal: Why Licenses Are Getting Tightened

The Great Open Source Reversal: Why Licenses Are Getting Tightened

For nearly two decades, open source software was the unquestioned champion of the tech world. Companies built entire business models around "free" code, contributors flocked to projects, and the mantra was simple: share everything. But a curious shift is happening. In 2023 and 2024, several major companies have started pulling their software back from standard open source licenses, swapping them for far more restrictive terms. This isn't a bug—it's a feature of a maturing ecosystem.

The primary driver is simple: the cloud ate their business model.

When companies like MongoDB, Elastic, and Redis released their software under the Apache or MIT licenses, they expected a fair exchange. You get the code for free, and in return, you either contribute improvements or pay for enterprise features. What they didn't anticipate was the rise of hyperscale cloud providers—Amazon, Google, Microsoft—taking that free code, wrapping it as a managed service, and selling it back to the original developers' own customers. The software creator saw zero revenue from a multi-million-dollar product built on their own work.

That stung.

The "Commons Clause" Cascade

The first major pushback came in 2018 when Redis Labs and MongoDB introduced new license restrictions. They created licenses like the Server Side Public License (SSPL) and the Business Source License (BSL). These aren't traditional open source licenses as defined by the Open Source Initiative (OSI), but they look close enough to confuse many developers.

Here's the practical difference:

• Traditional open source (MIT, Apache, GPL): Anyone can use, modify, and redistribute the code, even commercially. The GPL has some viral restrictions, but it doesn't prevent use.
• New restrictive licenses (SSPL, BSL): You can use the software for free—unless you want to offer it as a commercial service. Then, you must open up your entire service stack or pay for a commercial license.

Companies using these licenses have a clear message: If you're going to monetize our work at scale, we want a cut.

The Financial Reality Check

The numbers tell the story. In 2019, MongoDB was losing significant market share to Amazon's DocumentDB, which was essentially MongoDB's code repackaged for AWS customers. Within a year of switching to the SSPL, MongoDB saw its enterprise subscriptions grow by over 60%. Elastic, after moving from Apache 2.0 to a dual license (Elastic License + SSPL), saw similar growth in their cloud services.

It worked. The companies that once thrived in open source communities found that locking down their licenses made them more profitable.

Not Everyone Is Happy

This move has created a rift in the developer community. The OSI has explicitly stated that the SSPL is not an open source license. Critics argue these new licenses are "source-available" at best—you can read the code, but you can't freely use it. Projects like Hashicorp (Terraform) recently abandoned the Mozilla Public License for the BSL, sparking massive forks like OpenTofu. The community feels betrayed: contributors who donated code under one license now find their work locked under another.

The cost of this shift is reputation. Developer trust is a fragile asset, and pulling license changes without community buy-in often leads to fragmentation.

The Four Strategies Companies Are Using

If you're watching this shift, it falls into a few tactical buckets:

1. Dual licensing — Keep a free, limited version (often under an old license) and sell a proprietary one with more features.
2. License revocation — Change the project's license from pure open source to something restrictive, forcing commercial users to pay.
3. Cloud-only restrictions — Target only the largest cloud vendors, leaving small businesses and developers untouched.
4. Source-available with "free use" clauses — Allow non-commercial and internal use, but prohibit resale or hosting as a service.

What This Means for the Future

The open source movement isn't dying, but it's becoming more sophisticated. The naive ideal that "all code should be free" has collided with the cold reality of venture capital and quarterly earnings. Expect more companies to follow a hybrid model: contribute to small, non-core projects under true open source licenses, while core revenue generators move to source-available or paid licenses.

For developers, this means paying closer attention to license details. That "open source" label on a project's GitHub page might actually be a new-style license that quietly says, "Free for you—unless you get paid."