{"id":823,"date":"2024-08-26T12:38:26","date_gmt":"2024-08-26T18:38:26","guid":{"rendered":"https:\/\/redmonk.com\/rstephens\/?p=823"},"modified":"2024-09-05T16:01:43","modified_gmt":"2024-09-05T22:01:43","slug":"software-licensing-changes-and-their-impact-on-financial-outcomes","status":"publish","type":"post","link":"https:\/\/redmonk.com\/rstephens\/2024\/08\/26\/software-licensing-changes-and-their-impact-on-financial-outcomes\/","title":{"rendered":"Software Licensing Changes and Their Impact on Financial Outcomes"},"content":{"rendered":"

Another day, another rug pull. At least that\u2019s what the cynical might say, as we as an industry once again are discussing the fallout of another company changing their software from what was previously open source to a proprietary license<\/a>.<\/p>\n

There are once again renewed conversations around license changes, and with that comes the question: have the companies that have changed from open source licenses to proprietary licenses experienced material improvement in their financial positions following the license change?<\/p>\n

\"Tweet<\/a><\/p>\n

It\u2019s a good question, and unfortunately one that is difficult to answer from the perspective of an outside observer. The set of companies pursuing this strategy that also have publicly available financial information is small.<\/p>\n

That said, it\u2019s worth exploring whether there are notable trends even within the small sample size.<\/p>\n

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Goal:<\/strong> Examine if changing an underlying open source project\u2019s license from an OSI-approved license to a proprietary license has a measurable impact on financial outcomes for the commercial entity backing the project.<\/p>\n

Why:<\/strong> There has been a growing trend of entities relicensing their projects to proprietary licenses after initially gaining traction as open source projects, especially in the database space<\/a>. This is largely attributable to pressure from investors<\/a>. Given that companies are pursuing this strategy with the deliberate intention of stifling competition to bolster their financial results, have we seen evidence that the act of changing a license has a meaningful impact on financial outcomes?<\/p>\n

How:<\/strong> There are two primary constraints in trying to look at these changes. We are confined to 1) public companies that have 2) changed their underlying software license, as that is the only way to have visibility into financial metrics. The sample size is accordingly small.<\/p>\n

Who and when:<\/strong> Based on the above criteria, these are the companies we\u2019re looking at:<\/p>\n