Software as a service (SaaS) entered the IT landscape in 2000 and has revolutionized the deployment models of many software companies and even entire industries, such as Internet search. It has also becoming an increasingly popular form of consuming applications within enterprises of all shapes, sizes and geographies.
SaaS also brought about a heated debate over the distribution and licensing of open source software. This is of particular importance for open source companies whose software is used to power Internet-based services and applications. If someone uses their open source software over a network and alters the code in any way, do they need to make their code changes available and does it fall under the guidance of popular open source licenses such as GPL? This was the dilemma that SaaS created for the open source community and what is now often referred to as the "ASP loophole" of the GPL license.
GPL2 only forced “copyleft” when software was distributed on a floppy disk or CD, but distribution of SaaS was not addressed -- understandably since GPL2 was created in 1991 before SaaS made its debut. With the world quickly moving towards SaaS as the distribution model of choice, this became an issue for open source companies trying to ensure the viability of their projects. If the ASP loophole remained in the GPL license, that meant the end to “copyleft” and the end of a primary reason for open source's success – ensuring that people contributed code and their ideas back to the community.
Funambol was one of the first open source companies to recognize the ASP loophole and to propose a remedy, which was a variation of GPL2 called the Honest Public License (HPL). The sole purpose of HPL was to close the ASP loophole and to ensure open source's vibrancy in the age of SaaS. Funambol said at the time that as soon as there was a mainstream open source license that addressed the ASP loophole, it would upgrade from the HPL to that new license.
That new license is AGPLv3. It is the same as GPLv3 but with one added clause, which essentially says that if software is deployed over a network, such as the Internet, this constitutes distribution of the software such that the same rules that apply to physical distribution of open source apply to network-distributed software. The primary implication is that anyone who deploys open source software in a SaaS or hosted model must share their code changes with the community.
Funambol was the first major commercial open source software company to adopt the AGPLv3 and we submitted it for formal OSI approval, which it recently received. Many other open source companies and projects whose software will be used in a SaaS environment are now actively considering adopting the license.
What is the implication of AGPLv3 for enterprises? If you are a user in an enterprise who is just using some open source software that is hosted outside your organization, the AGPLv3 ensures that you can get access to the application's source code. While you may not want to access the source code, the fact that the source code is available will help ensure that the software can realize all of the benefits that open source entails, such as community involvement that leads to innovative software.
If you are using AGPLv3-based open source software that is hosted inside your organization and the application is only being made available to internal users, note that the source code only needs to be made available to internal users, not external users. The litmus test is who are the users of hosted application or service. If they are only internal users, the source code only needs to be made available to them. If users are external, the source code needs to be made available to external users as well.
For all practical purposes, the AGPLv3 is a key advance for everyone involved in open source, regardless of if you are a software developer, Internet end user or enterprise end user. The AGPLv3 closes the ASP loophole and keeps the freedom of open source software alive, in the age of SaaS and hosted applications.