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Decoding Business Source Licensing: A New Software Licensing Model

More companies are pursuing a software licensing model that sits somewhere between open-source and proprietary licensing.

Business source licensing (BSL) has recently emerged as an alternative software licensing model that aims to blend the benefits of both open-source and proprietary licensing. For developers and IT professionals evaluating solutions, understanding what BSL is, and its implications can help inform licensing decisions.

What is Business Source Licensing?

Like open-source licensing, BSL makes source code viewable and modifiable. This allows a community of developers to collectively improve the software. However, BSL applies restrictions on how the software can be used commercially. This provides revenue opportunities for the company publishing the software, similar to proprietary licensing.

BSL is often positioned as offering “the best of both worlds” - open collaboration on source code plus commercial protections. Companies like Percona, Cockroach Labs, and Confluent have adopted BSL models. But is this hybrid approach right for your organization?

The topic came up during a breakout session with customers at TIBCO Next. As TIBCO CTO Rajeev Kozhikkattuthodi notes, BSL represents an “open set of questions around the viability of operating both for vendors and for customers to operate open core businesses.” He cautions that “commingling of licenses is not necessarily a good thing” and predicts companies will avoid these “somewhat in-between sort of open core models.”

Rajeev continues, "We really like to keep it simple and straightforward. There are going to be open-source technologies that we use, and we contribute back. Sure. Those are going to be under clean, compliant open licensing models. We will give our enterprise customers commercial subscription models, and those subscription models are going to be covered under the typical licensing license. We do not see this mixed model licensing as a viable approach going forward."

Potential Benefits of BSL

Transparency & Security

Like open source, BSL provides full access to source code. This allows you to inspect components for security and quality. Rather than relying on opaque proprietary code, you can verify integrity yourself.

Community Contributions

Making source code accessible enables community contributions to improve software, as with open-source projects. This crowdsourced development can potentially accelerate innovation.


BSL offers some source code freedoms not permitted in closed-source proprietary software. This may provide more flexibility to modify and extend the software if desired.

Potential Drawbacks of BSL

Limited Rights

The commercial restrictions in BSL mean core freedoms of open-source software are forfeited. Your rights may be limited depending on the specific BSL terms.

Vendor Lock-in

Proprietary aspects of BSL can still lead to vendor lock-in risks. Transitioning between BSL solutions may be challenging if restrictions hinder compatibility.

Unproven Model

BSL is relatively new and unproven compared to established open-source and proprietary models. The risks versus rewards are still being evaluated in the marketplace.

Assessing BSL for Your Enterprise

When evaluating BSL-licensed technologies, focus on four key considerations:

  1. Compatibility with Existing Systems Will the BSL technology seamlessly integrate with your current landscape? Assess integration costs and risks.

  2. Optimization for Your Environment Is the technology tailored and optimized for enterprise-scale performance? Review benchmarks in context.

  3. Consumability of the Technology Analyze the usability, learnability, and adoption challenges. Can your team be productive quickly?

  4. Vendor Relationships and Support Research the provider’s reputation and customer relationships. Review their support model and SLAs.

Balancing the Trade-Offs

Every licensing model involves trade-offs. There are no hard and fast rules on whether BSL is universally better or worse than open-source or proprietary alternatives. The choice ultimately depends on your specific technical, business, and cultural constraints.

Some organizations may find BSL strikes the right balance of code transparency and commercial protections for their needs. Others may determine that traditional open-source or proprietary models are preferable.

By fully evaluating BSL in your context against other options, you can make the most informed licensing decision for your systems and organization. With a thorough analysis of the pros, cons, and hidden costs, you can determine if this emerging approach is a fit or if tried-and-true models are the safer choice.

Here are some additional key things to know about business source licenses (BSLs):

  • BSL terms can vary - There is no standard BSL license. The specific rights and restrictions can differ significantly between BSL implementations. Carefully review the details.

  • Compliance complexity - Complying with BSL terms may require tight controls on commercial usage. This could increase auditing and compliance overhead.

  • Contribution clarity - The ability to contribute to BSL codebases may be unclear or limited. Some BSLs discourage community contributions.

  • Support uncertainties - With BSL, it may be unclear if community support or paid vendor support is ideal. There are pros/cons to both.

  • Licensing evolution - BSL is still evolving. License terms could change substantially in future iterations, disrupting adoption.

  • Hybrid licensing risks - Some BSL companies dual-license with open source and BSL. Misusing code between licenses can cause compliance issues.

  • Acquisition impacts - If a BSL company is acquired, license terms could change depending on the new owner's policies.

  • Competitive concerns - BSL could raise antitrust issues if vendors collude on license terms. Regulatory impacts are untested.

  • Open core transitions - Some open source projects transition to BSL post-monetization. This can trigger community forks to stay open.

Overall, treat BSL with caution. View it as a work-in-progress model with uncertainties. Thoroughly evaluate potential pitfalls before adopting BSL-licensed technologies for your work or business.


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