The Rights-Ratchet Model

It’s not new, even if each time it comes up people think it’s a new outrage.

Caged Bird of Paradise

One of the durable long-term strategies for software businesses in the era of open source was perfected by SugarCRM about a decade ago. I’ve described it as the rights ratchet model. The “ratchet clicks” (not necessarily in exactly this sequence) are:

  1. A startup company with a hot software project gathers a vibrant and enthusiastic community of deployers using an open source licensing model and adoption grows exponentially as a result of users and developers having the freedoms they need to test, deploy and improve. It’s harnessing the open source network effect.
  2. The license they use will be one they could not operate their business under if they had to abide by it, but since they control all the copyright they don’t have to. They will often use a contributor agreement to harvest community copyrights so they don’t have to start abiding by the license as they benefit from other people’s innovations.
  3. They continue growth by making a differentiated alternative product or service that’s not wholly open source (“open core“) and that’s monetised via subscriptions or partnership arrangements. Monetisation always involves scarcity but this approach requires the scarcity to be manufactured rather than being inherent (as it would be, say, in a support model). For projects that previously had no obvious business model this is often the point at which non-founding investors become involved.
  4. They put more and more focus on the monetised version and eventually either differentiate so far that the “community” version is non-viable or license it in such a way that it is only really usable as a “free trial” version. If they haven’t before, they will require all community members to have a commercial relationship with them.
  5. During these moves they dial up the “we are open” rhetoric, claiming to be making things somehow more open or more free as they proceed. They sometimes attack organisations like OSI, FSF and others that speak up for software freedoms, calling them things like “self-appointed gatekeepers” or “one opinion” for pointing out the company’s actions are reducing software freedom and violating norms for “open source” and “free software”. They often claim their betrayal of software freedom is justified by a commercial need.
  6. They may change the license as they try different approaches to optimally force users into a commercial relationship. They will imply its open source even when they know it’s not. They will not be bound by the license they pick. Both are permitted by the contributor agreement from ratchet 2 (when it appeared reasonable).
  7. Eventually they focus exclusively on their monetised work and the community gathers dust and fades away or even eventually closes.

So the ratchet clicks to watch for as software freedom is eliminated are in summary:

  1. Focus is on adoption rather than collaboration
  2. Licensing that demands a contributor agreement so they don’t have to submit to it
  3. Differentiated alternative created as main revenue source
  4. Open source code is effectively just a “free trial” version
  5. Assertive rhetoric claiming they are as open as they reasonably can be
  6. The license is changed for reasons not benefiting the community
  7. Community no longer recognised and product now proprietary

At SugarCRM this process took about a decade (from 2008 to 2018).

I have yet to meet a sole-maintainer open source company following this model that demonstrates belief in any open source benefit apart from driving adoption. Once they have enough adoption to pivot, they don’t need any form of contribution apart from revenue. Whether they admit it or not they will abandon any peer community they may have had and instead treat “community” as a synonym for “customer”. Spot them as early as you can if you aren’t just another customer looking for a product.

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