After the dotcom doldrums of the past five years, there is a new wind blowing through the world of commercial software. It's open source, but not as we know it. The first-generation start-ups like LinuxCare, TurboLinux and even Red Hat, were essentially service companies. Today, an increasingly-favored approach is to employ dual licensing to create two revenue streams: one based on providing services for free software and the other through traditional commercial licenses to products that are generally based on the free software version.

A whole new generation of open source companies like MySQL, SugarCRM and JasperSoft have shown that such an approach can be highly successful, and this is encouraging others to adopt the same model – Scalix is the latest to join the club. Before this becomes established as the de facto standard for open source business in the dotcom 2.0 world, now might be a good time to examine whether it is really is such a good thing for free software, or whether it might even represent a threat to its fundamental principles.

The impetus behind dual licensing comes from a desire to find ways of making money from free software other than simply by providing services. This is explicitly stated in what was probably the first such dual license, the Aladdin Free Public License, created in 1994 by L. Peter Deutsch's company Aladdin Enterprises for the Ghostscript program:

While Aladdin Enterprises respects and supports the philosophy of the Open Source Definition, and shares the desire of the GNU project to keep licensed software freely redistributable in both source and object form, we feel that Open Source licenses unfairly prevent developers of useful software from being compensated proportionately when others profit financially from their work. This License attempts to ensure that those who receive, redistribute, and contribute to the licensed Program according to the Open Source and Free Software philosophies have the right to do so, while retaining for the developer(s) of the Program the power to make those who use the Program to enhance the value of commercial products pay for the privilege of doing so.

This sounds eminently reasonable, but there was a sting the tail: although Ghostscript was also distributed under the GNU GPL, it was not the most up-to-date version, which was only available under the more restrictive Aladdin Free Public License. So, in this case, there was a definite loss for the free software world when the dual-licensing policy was adopted. (This has now been remedied: the latest Ghostscript is available under the GNU GPL.)

Some consider dual licensing in general to be a problem for free software. For example, in an extensive essay on the subject, Lajos Moczar has raised concerns that dual licensing introduces an asymmetry into the licensing of code that unduly favors the owner of the copyright, and weakens one of the crucial checks within the open source world, the possibility of a fork.

One of the key characteristics of free software is that the threat of forking keeps teams close to their community. If they diverge too far from the desires of the majority, other developers can simply fork the code and move things in a direction more aligned with users. Similarly, the possibility of forking helps keep companies that base their businesses on free software honest: if they cease to serve the community whose work they build on, a fork allows the latter to re-assert control.

It is this fact that makes “buying