 Open Source Sustainability has been the theme of the last few talks and we'll dive into a new facet of Open Source Sustainability in our next talk from Amanda. In this talk, Amanda shares insights from a variety of Open Source community leaders on the commercialization of Open Source software, some of which overlaps with GitLab's open core approach. Enjoy. What is Open Source Software? It's software where the source code is freely available and where it's distributed under an open source initiative or OSI approved license that complies with the open source definition or OSD and that's something that I bet very few people listening today can actually recite to me. It's also a licensing model, a sociopolitical movement and a development methodology and it's definitely absolutely the development methodology that's preferred by young developers today. It allows innovation and it runs our internet, our clouds, our databases and AI and according to Tidelist's 2020 survey over 90% of stacks actually include open source software and over 70% of them is open source. As someone said to me when I was working on Open UK's state of open report, phase one was published back in March, it's like gravity, it's all around us, it's everywhere, there's no escaping it. Mark Andreessen of Andreessen Horowitz famously said that software is eating the world back in 2011 and Jim Zemlin of the Linux Foundation retorted with open sources eating software's lunch. People see open source in the way that they've experienced it, so if you've experienced it as a couple of people setting up a project, building a community, building a company on top of that, maybe hiring the community along the way, maybe like a HashiCore or MongoDB, that's how you'll think of it. If you're an individual developer who's scratched an itch, created something like the Linux kernel, attracted over 15,000 contributors in the last 30 years, created software that's changed society, that's how you'll view it. If you've been part of a company's non-differentiating, non-permanent collaboration through something like Open Stack, the Linux Foundation or Eclipse or one of their projects, that's how you'll view it. Whatever model you've experienced will impact your view on open source and how it works. Open source today is part of technology and everything that it's trying to achieve. Back in 2008, I joined Canonical and that was my experience, my first experience of open source and I joined as the head lawyer, I was general counsel and I spent five years there working on the commercialization and business models around open source. I was a point of escalation in most of the deals. I want to think a little bit about that right now. Of course in that five years things changed and it changed dramatically where we moved from a world where software was generally distributed and worked on-prem to a world where most software was utilized in the cloud or the platform economy. Now I'm going to introduce you to open source underdogs, which is my favorite podcast and let's start by seeing Canonical's founder, Mark Shuddleworth, and hearing what he has to say. There's a real sort of double challenge in starting a tech operation that is open source. Starting a tech operation is always hard because you want to do something new and that's surprisingly difficult, you genuinely have to do something different if you want to be successful from a technology point of view. And most of the people who would have that kind of open source view, there's a technology angle to it, right? There's something new that they want to do and it's hard enough getting that right. With open source, you need to think about the fact that you're enabling your own competition is the blunt truth of it. You're enabling people to compete with you with the benefit of all the things that you've done and that can be both financially and emotionally very daunting. But at the end of the day, I don't see any other model for software which is spreading as fast across all of the kind of categories of software out there today. If you're not going to be open source, you're almost certainly going to be niche. Now, that may be satisfying for you, but I doubt it. What Mark clearly sets out there is the business consequence of open sourcing your code and that's a combination of licensing and enabling your competitors with your own innovation and that's the business pain of using open source. Now, I've seen lawyers who've suggested that you can exclude that, you can stop others from using your code commercially in open source and that's just simply not the case. I often think that that confusion comes from Creative Commons, which is designed for documentation and which does allow that. There is a non-commercial usage license there and the reason open source cannot have that exclusion is the open source definition and definition six, which requires that there is no discrimination across fields of endeavor. You may not restrict the program from being used in business. Now, there's no restriction on making money from open source and of course, you can choose to exclude other people from using your source code but if you do that, your code is proprietary and it's not open source and that fact is really rather binary. When I left Canonical, I worked for a while advising startups and they would come to me understandably to talk about open source and I came up with a little theory, a very simple theory, a very simple three questions and that's the what if theory. What if someone else takes your code and uses it? Well, most people are okay with that. That's kind of what they're expecting with open source. What if they take your code and they make money from it? Less keen. What if they use your code and they make a lot of money from that and you make nothing or very little or significantly less? And at that point, I would often not hear from them again. Commercializing open source requires balance. It requires the balance between the scale that can be created and the adoption that comes from open source and you're developing code that's not niche and that has to be balanced against the price of non-discrimination which must be allowed by all and I repeat that all open source licenses. Now at this point, I could show you a variety of snippets of founders who've clearly not understood that when they've open sourced the code but I don't really see any benefit in calling them out in that way. Instead, let's focus on the advantages and the business models and I think we should go to Shannon Williams, founder of Rancher, co-founder of Rancher which was sold to Suze for $600 million in 2020. It's at the root of our success. So, by open sourcing the code, we enabled a startup with relatively, with no name recognition obviously to come into, in a lot of ways, what's a very crowded market. We made Rancher fully open sourced and free because we felt that it was the best way to get adoption to plant seeds in organizations that would need this technology. Shannon's not alone in recognizing that rapid adoption of open source and I'd like now to go to James Waters, co-founder of Pivotal which was sold for $2.7 billion to VMware also in 2020. I really do enjoy working on open source projects because they can have a breadth of impact that's pretty unimaginable to something that you have to commit a sales transaction and for software before someone can use it. These are the kind of impacts that open source can have worldwide deep into developer impact that you could never do with a closed source only enterprise sale only product. I think just the unimaginable breadth that open source can get to and the ubiquity that it can get to in the modern world is stunning. So that's humbling to work on. I think the challenge then is like, well, how do you make sure that the largest 5,000 organizations in the world are contributing to that? And that's where I do have a passion for enterprise monetization of open source and finding ways of partnering with those organizations and packaging and pricing things such that they feel that there's good value in partnering with these open source companies and making them their most meaningful platform. So that marketing and growth advantage which is the developer's ability in 2021 to go to GitHub, GitLab or any other public repo and to take open source code, introduce it to their business and avoid a procurement process, that's an ability to scale your code, your open source that proprietary just cannot compete with and it works really well in a developer focused business model. Okay, business models. So back in 2008, Matt Aslet under the auspices of 451 created what's the probably if not definitely the first report on open source business models and one of the key findings then was that vendors must choose complementary development, licensing and revenue strategies in order to maximize revenue generation opportunities and he identified the bottom line and the bottom line was that open source is not a business model. It's a development and distribution model that is enabled by a licensing tactic. Now, Matt wrote that 13 years ago and some things haven't changed much. The list of revenue generation models he gave isn't very different today and he started with support and we see support as one of the least popular models today because it's hard to scale. At the same time, we see successful businesses like Rancher and Percona using that. Another is subscription, a little like support, often including support but with other services bundled around it, maybe indemnity, maybe updates and that's Red Hat's model which we saw lead in 2019 to the biggest tech transaction in history, Red Hat's sale for $34 billion. Now, whether that is something that's replicable really remains to be seen and I think you need to be close to the key technology for it to work and in Red Hat's case, they're very close to the Linux kernel. We will see whether it's repeatable because SUSE, which uses the same model and which describes itself as the biggest independent vendor of open source today, is going to IPO in June to watch this space. Another is open core. You're probably surprised to find that in 2008, Aslet identified that most companies were using both proprietary and open source in their businesses and they were doing that, he said, to balance the higher cost of development and marketing. Now, when Aslet wrote that, that was 2008 way before we had Git, before we had a GitHub economy and this marketing advantage didn't exist at that time so these costs today are much more balanced and there's less need to balance that yet we still see open core particularly for the VC back barrier companies as a popular model. And we have others like systems integrators and managed services providers who will generally provide services across the multitude of products whether those are all open source or a mixture of open and proprietary. And the key issue that we're seeing today seems to be single product companies, single product vendors, companies which work with a single product are obviously putting all their eggs in one basket and this seems to be much more difficult and much more susceptible to the problems in the cloud environment. We see something different with multi product vendors and whether or not that a single product vendor will survive as a model remains to be seen. If you think about how many projects you want to take on, like say MongoDB is a fairly focused company, one core thing, elastic a fairly focused company but you get into the platform world, companies like Hashicorp are very successful at doing multiple projects. I think Pivotal is probably one of the broader breadth open source companies out there. Certainly Red Hat has a pretty broad breadth. You hit a point where you become the platform provider of choice for their next generation of design and actually the pressure comes to do more and more and more. One of the biggest pressure points for us was always like, okay, we love this as an application platform now provide us the whole universe of data services on the platform. And so you have to achieve a certain critical mass to have the scale to invest like that. But I do think that in enterprise segmentation it's powerful when you can start to have people accept the offerings you do have and then the biggest pressure is now add this so I can have one coherent approach. And I think that that's something that's really important for open source companies to think about. Like if you look at how Amazon operates, they are not a federation of hundreds of little hosting providers all coming together. They really have that sort of single point of interface to all of their abstractions. So I think that's the interesting dynamic in the world right now of open source is like, how broad you should go in your portfolio through enterprise buyers favor that? Is it better to be lower end single product? Interestingly, both Pivotal and Rancher like many successful open source companies are in the Kubernetes, the cloud space. But success doesn't just come in that space. We've also seen success in the database space with companies like Prokona. And Prokona is quite famous for not having VC backing or funding. So let's hear from founder Peter Zeistef. So if you look at where we started, we started with essentially consulting and especially consulting focused on the high performance applications for MySQL and MySQL alone. And this gradually extended both in terms of the services we offer. So right now we have support, managing services and professional services such as consulting and training. And in terms of technologies we cover, right? So right now we also cover MySQL, PostgreSQL, MongoDB and MariaDB, right? So really the value proposition changed from essentially, hey, you know what, we can optimize your MySQL performance to what Prokona helps you to run MySQL, PostgreSQL, MongoDB best. Aslet warned us in 2008 that increased use of commercial licensing could create tension between the expectations of potential customers and commercial reality. Now, Aslet could not have understood how or why in 2008 this could come to fruition in the way that it has. And in the last few years we've seen a small number of apparently successful companies based on open source with communities moving away from their open source licenses to proprietary alternatives. And this has sometimes been called a bait and switch tactic. And one of those companies has gone so far to say that it viewed open source as nothing more than a marketing tool. And this included companies like Redis, MongoDB and Elastic. And we've seen a move to licensing like the Commons Clause and SSPL licenses. So back in 2018, Redis commissioned the Commons Clause and it was drafted by lawyer Heather Meeker. And the Commons Clause is an add-on clause which is added to an open source license to exclude others from commercial usage to exclude the competitors. And as soon as you add a clause to an open source license, an additional clause to an approved open source license, that license is invalidated because it's no longer an approved license. And we saw Redis move to it. The open source community greeted it with nothing short of horror. And then in 2019 Redis moved again. And this time they moved to a new proprietary license called the Redis source available license. So let's hear from Redis. Although AGPL provides a little better protection than BSD, because you need to contribute back basically any enhancement that you do to the software, we didn't feel that this is a showstopper for cloud providers to adopt successful open source projects. And I'll explain. So what happened in recent years is as the cloud business grew, cloud providers such as AWS are adopting any successful open source project, making it a fully managed service and selling it for tens of millions in the case of Redis, hundreds of millions of dollars per year. So what is Redis talking about? Well, strip mining. Strip mining is a very US centric term and it's an analogy from a federal law created in the mid 1970s, which was designed to stop abuses of the land with companies strip mining coal from the land. And this alleged strip mining came to public attention in 2019 in a New York Times article where it was reported that a number of open source founders, companies that were running open source and distributing their code open source, had gotten together to complain about some of the hyperscalers, some of the cloud companies, including AWS, who made the headline. Unsurprisingly, Amazon was equally vociferous in its response to this. And while strip mining coal might be illegal under federal law at least, using code, which the originator has freely chosen to license under an open source license, is entirely legal. And that was clearly pointed out by AWS's Andy Goodman. Elastic actually took matters further by instigating litigation on a trademark infringement basis against AWS. That seems to have disappeared. Nobody can quite tell me what's going on with that one. But on January 14th, 2021, Shy Bannon, founder of Elastic made headlines by announcing they were doubling down on open, confusingly doubling down on open by moving from an open source Apache 2.0 license to the SSPL. Open source and business using open source using open source has clearly because of all of this being in the eye of a storm for the last few years. And some in the open source community would describe this as fun, deliberately confusing. And the SSPL is clearly not an open source license. But the confusion caused has meant that the open source initiative the RSI has felt the need to come out and state this publicly. And a new terms emerged. And that's faux pen, where non open source software tries to pass itself up as open when it's licensed under something like the SSPL. And MongoDB commissioned Heather Meeker to draft the SSPL a few years ago. But when they did that, they took it to the RSI, they went through the approval process. But before it could be rejected, I think they might have seen the writing on the wall. They withdrew it from the process. Now, an interesting structural fact about open sources shared nature and its licensing is that a community always has the opportunity to lift the code and move away in a fork. And that's exactly what's happened to Elastic. A little bit confusing because Elastic's moved to a proprietary model. It appears that Elastic is the one that's managing a proprietary fork and the original code under the open source license is now being maintained by others, including Ivan. It's often where it's really struggled and where you've seen it struggle is when organizations haven't had a great business plan or a route to market or they haven't been able to commercialize their own products. And then all of a sudden it gets embedded into something larger. And then the only monetization of it happens in the cloud. To me, that's business, right? That's something that's going to happen in any space, whether it's open source or not. And yes, in our world, people can take and build on it very easily. But that's what you know, you know what you're getting into when you start an open source software business. And if you don't, you really should research it a little bit more. This is the knife that cuts in many ways from a business perspective. And I certainly would look at the world and I certainly wouldn't call foul if that happened to an open source project. So how do we transition through this difficult cloud based time? Well, I would suggest that we do it with great care. Because carelessness in this world of open source, a lack of understanding of licensing and the OSD could so easily break this beautiful thing that we've created and leave us back in a world where open source may be regurgitating proprietary code and nasty mess of binary and we lose what we've created. Now some have suggested there's a third way. And you'll have noticed that I've explained very clearly the difference between open source and proprietary code. And they've suggested that there's a third way, an alternative that could be created. And that third way might be public or shared source, where source code is shared, but the code distribution doesn't have an open source license and it doesn't meet the standards of the OSD, potentially allowing it to exclude innovation being used by one's competitors. Personally, that I don't think that's the solution. And I don't think it's the solution because I don't think there's the appetite for it because to create it would require three things and it would require energy, it would require funding and it would require engagement. And having seen Heather Meeker try to defend the Commons Clause to a room full of open source lawyers in 2019, there might be one or two who'll support it, but I think there are very, very few. There was no real appetite for this. Personally, I think there's a fourth way. Now currently emotions run really high. There's a lot of money at stake. As there was, I have to say 10 years ago when I first came across this problem at Canonical. And in time to come, we will see different problems. We will see further issues with different business models, whether it's in the internet or AI. And we'll see more disruption coming from open source and incumbents never loved disruption. In fact, if we think back 10 years ago, we saw similar problems around operating systems and those were solved by antitrust cases and regulation. So how do we get over this strip mining? How do we get over this current problem? We look with the lens of the future and the learning of the past. Already since 2019, we've seen Google doing deals with open source companies to share revenue. In 2020, with companies like Grafana, AWS was also public and starting to do these. Some even allow credits from the hyperscalers to be used to buy open source services. And I expect that this particular bump in the road, I expect that it will be resolved, not by regulation or that might be, but I think by negotiation. Remember at the beginning, I said open source is all around us. It's like gravity, you can't escape it. Well, today, this problem isn't just open sources, it's societies. And it applies across all technology, across all infrastructure. And that means all businesses and government today. I started by thinking about what open sources and one thing it is not is a business model. And as I come to the end of my time with you today, let's look at Mark Shuttleworth again, reflecting on 15 years in Canonical. Some things really haven't changed. It is about enabling people to go faster with open source, to drive down the cost of open source, drive down the friction of open source. I don't see any other way of organizing software that seems poised to beat open source. Bruce didn't come down from the mountain with the OSD carved in stone, you know, it is no 10 commandments. But the whole of society today relies on code that's distributed under software licensing that relies on that definition. And we must take great care of it. Of course, we must keep it under review. And we must also make sure that the OSI its Guardian is well funded and well managed. But we must also remember that open source works to make the best software. When it comes to business, we must look to business models and the ever evolving, ever changing technologies that impact them. Open source will not bend to this, but rather these have to evolve to allow open source to thrive. Open UK is the industry body for the business of open technology in the UK. If you're not familiar with that term open technology, it's open source software, open hardware and open data. And we work to a vision to develop and sustain UK leadership and open technology. That falls under three pillars, community, legal and policy and learning. In community, we showcase the UK's amazing open technology community through awards, honors lists and the like. We use the impact and the power of that cohesive visible community to influence laws and policy. We do that through an extremely knowledgeable legal group of around 18 lawyers who respond to legislation in the UK in Europe and beyond, submitting an amicus brief in the Google v Oracle litigation, the only non US based organization to do so. It didn't take long in 2020. Thanks partly to that group for open UK to be recognized by the commission as the actor in this space. We use our community strength to influence legal and policy. But there's a third pillar, learning, building the community of the future, teaching good practices and governance and knowledge around open source around open technology to the technologists of the future through things like our kids camp and course. This was in fact, in its first year, the runner up in the GNOME community challenge, and this year we'll be teaching kids the 10 aspects, the 10 elements of the OSD, the 10 requirements as part of 10 fun lessons. All of that feeds into the work we're doing and building a community of the future in open technology in the UK. And we've recently brought on board the wonderful Matt Barker of Jetstack as our first entrepreneur in residence and Matt's role is going to be to help shape our founders forum to help support and influence startups and scale ups in the UK working in the open technology space. We're an inclusive organization and we're there for everyone to participate in and we launched our belonging letter on Valentine's Day this year. If you'd like to join us, if you'd like to come on board, feel free to become a supporter. But also you're welcome to participate if you don't. Contact hello at openuk.uk, see more on our website at openuk.uk and follow us on Twitter at openuk underscore UK. Thanks very much.