Linux and Open Source Software

The "open-source" software movement is changing the rules by which we're used to playing. You don't have to be a "techie" to appreciate the significance of this movement.

The norm has been for software developers to severely restrict access to source code. ("Source code" is human readable code. "Object code" is code that computers can read.) With "open source," the software and its source code are free. Users can modify the software, and then redistribute the program to others.

Of course, this seems counter-intuitive. How can anyone make money if they're giving away their software? Who's responsible to provide customer support? Who owns the subsequent versions of the software?

Linux and Other Examples

The open-source movement encourages the sharing of information and the synergy of many people. Innovative ideas and modifications come much faster when hundreds or thousands of people are working on solutions. This contrasts with the usual protectionist approach of the software industry, which has been driven over the past decade mostly by Microsoft's operating systems like WinCrash 95.

Without a doubt, Microsoft dominates the operating systems of PCs and some networks. However, nine years ago, a young undergraduate at the University of Helsinki created an operating system named Linux. The system and the underlying source code were made available free of charge.

Linux is used today more than ever before, and it's an excellent example of open-source. Users can modify Linux, and Linux can incorporate those changes and make the improvements available to other users.

Linux is cheap. Unlike most other systems, there's no licensing fee based on the number of end-users. Companies can modify the software to fit their particular needs. Developers can quickly fix bugs, and improvements can be worked into the program.

Entire industries have developed around Linux to make and sell new products and services. Companies such as Compaq, IBM and Dell are selling computer servers set-up with Linux. Ironically, these are the same companies that are simultaneously the biggest sellers of servers with Microsoft Windows NT. Large software developers, such as Corel, are also creating applications that run on Linux.

Many systems run on open-source software, especially in the Internet age. Even the Internet's system for managing domain name addresses runs on open-source software. Numerous websites run on Apache, an open-source program used on Web servers to deliver Web pages to your Internet browser.

The mix of altruism and open-source software is a continuum. Some do it for the community spirit. Others do it out of self-interest, releasing only portions of source code over time to accumulate the knowledge and work of others. Help functions and customer support are often lacking. However, without a doubt, support for the open-source movement is changing the software industry.

Reshaping the Legal Landscape

Open-source is also changing the legal landscape of software licensing. Each open-source project is governed by licenses that lay out the rules for using, modifying and distributing the software's source code.

One well-known open-source license is the GNU Project's General Public License (www.gnu.org). The "GPL" is also known as the "copyleft." The GPL requires that the source code be distributed with the software and that all derivative works be distributed with the source code. In other words, if your developer modifies the program, you can use and distribute your modified software and code, so long as you pass it along with the original software and source code.

This right to use the software continues on, provided you abide by the license terms. The original program, and any work built-on, remain perpetually "free" to use. For the community spirited, the GPL is a good policy. It reads a bit like a manifesto, and less like a legal document. The downside for the entrepreneurial spirited, however, is that if you develop valuable applications, you'll have little ability to commercially exploit it.

At the other end of the spectrum of open-source licenses is the BSD license. This license allows the user to change the source code just a little, compile it and sell it to someone else with almost no restrictions. This policy was first used as the basis for many commercial UNIX distributions. If you or your Internet Service Provider runs Apache software to serve up Web pages, you should know that Apache is loosely governed by the BSD license terms.

Other software companies have developed their own versions of open-source licenses. For example, if you're using Communicator 5.0, it comes under the Netscape and Mozilla Public Licenses (www.mozilla.org/NPL/). The license is similar to GPL, but grants special rights to Netscape and its development partners.

How Competition Might Help Microsoft

What does all this mean to you? Open-source means more competition in the software industry and marketplace. This is good for consumers. Ironically, it's also good for Microsoft as it tries to show that it's not dominating the market or involved in unfair competition practices.

An interesting question is could Linux become a mainstream operating system. Although Microsoft published a controversial study that showed Windows NT was superior to Linux, Microsoft also has acknowledged that Linux is a legitimate contender, particularly for file and Web servers. Reportedly, Microsoft formed a group of employees to evaluate Linux and assess competitive threats.

Microsoft has even made vague statements about releasing parts of its own software as open-source. However, it's unlikely Microsoft would jump on openness the same way other developers have.

Open Source and Licensing

What about licensing laws? How will licensing change the way lawyers advise their clients on intellectual property issues?

Traditionally, the attorney for the developer tries to protect his client's software from illegal use and distribution. Usually, source code is coveted, and escrow agreements must be carefully drafted to allow the release of source-code only if the developer becomes bankrupt or breaches the licensing agreement. Lawyers tell developers of valuable software that they shouldn't even share source code with any parties except under strict confidentiality and non-disclosure agreements.

Most users of software find that they can't modify the underlying program. They don't have access to the source code, and modifications usually breach the licensing agreement. Attorneys for users and companies acquiring software tell their clients that any modifications and improvements may be subject to the licensing agreement. Each agreement needs to be carefully reviewed and negotiated.

Now, does the open-source movement mean an end to legal review of licensing and distribution agreements? I think that it would be a serious mistake to reach that conclusion. Open-source is just one small dimension of the entire software industry.

Furthermore, even open-source licensing agreements need to be reviewed before software is distributed, used or modified. If you're a software developer, consider how giving up ownership rights fits into your development and distribution plans.

If your business is an end-user, it should carefully consider whether it wants to be perpetually tied to an open-source agreement. Consider the availability of customer support and the effects on critical systems of your business if licensing rights aren't clearly stated and understood.

Open-source has great benefits for both users and developers. It fosters other computer software and products, e-commerce, and after-market technical and customer-support businesses. It also highlights the need for good information technology lawyers to help your business assess all of its technology legal issues, and simultaneously handle deal-making and service contracts.

At a minimum, open-source licensing agreements challenge the legal boundaries of typical software licensing terms. Open-source encourages a creative sharing of information. This leads to innovation and competition for developers, and more choices for users. Whether open-source will overcome the traditional software industry and change licensing laws is yet to be seen.