Lessons for Your Open Source Strategy: Redis Labs Case Study

Redis Labs has created some controversy with a recent change to the licenses of the Redis modules. They announced that the Redis modules will now be licensed using the Apache license plus the controversial Commons Clause. This clause effectively prohibits other organizations from selling a Redis instance that includes these modules. The announcement specifically targets cloud providers, i.e. AWS, with, "...cloud providers have repeatedly violated this ethos by taking advantage of successful open source projects."

For some background, Redis Labs is the company behind the popular open source Redis database. Redis Labs provides an Enterprise edition of Redis and hosted version. They also closed a $44 million series DVC round last year, so I am guessing generating significant revenue growth is an issue.

Redis Labs should be free to change their license to suit their business strategy. However, it does appear the change shows their open source strategy might not be generating the success they had initially envisioned. For this reason, I think this situation provides a perfect case study for companies interested in building a successful open source strategy.

Lesson #1 - Know How You Plan to Generate Revenue

Too often, companies will jump into open source without careful consideration to long-term revenue generation. If you don't have a clear vision on how you plan to make money, then be careful about doing open source. If you have a successful open source project, remember most of your users are not going to give you money for using the open source project. You will be lucky if a very small percentage of your users actually provide code contributions. Open source is about creating a bigger market for your company. Make sure you have something of value to sell into that market.

AWS, Microsoft, and Google have been using and contributing to open source for a long time. If you have a successful open source project, you need to assume your competition will use it. Blaming cloud providers for their lack of collaboration is not a way to generate revenue.

Lesson #2 - Proprietary Software Is Not a Bad Thing

Proprietary software can coexist with an open source project. The open core model for open source companies is well established and successful. It is very hard for a software company to grow based on service and support revenue. Open source companies need to make sure they have value-add software that can consistently and competitively generate revenue. Companies need to answer the question: "If AWS starts using my project, what will I sell to generate revenue?"

Redis Labs seems to not want to acknowledge they now have proprietary software. Adding the Commons Clause license to the Apache license is conflating the meaning of open source and is misleading. Redis Labs sells proprietary software and they should be proud of it.

Lesson #3 - Corporate-Controlled Open Source Is Risky for The Community

Redis is not the first corporate controlled open source project that has changed their license and they won't be the last. The Neo4J project changed their license to include the Commons Clause. Open source companies are for-profit enterprises that have competing priorities. Sometimes the business strategies might no align with the open source community.

The uncertainty of changing corporate strategies is a key motivation for open source foundations, like the Apache, Eclipse or Linux Foundations. If Redis was hosted at one of these open source foundations, changing the license to something that is not open source would not have occurred.

A lesson for any company making strategic use of an open source project, discover who controls the license and governance decisions for that project. If it is a VC-funded company that is going to be looking for explosive revenue growth, then be prepared for potential future changes. Caveat emptor.

Lesson #4 - Commons Clause Is a Virus to The Open Source Community

The changes made by Redis Labs are likely to support their business goals and desire for growth. I have lots of respect for companies that want to grow and be successful. However, the use of the Commons Clause is a real issue for the open source community. The Commons Clause is misleading and conflates the meaning of open source. To be clear, Commons Clause is not open source.

Companies using the Commons Clause are trying to build their community and brand using open source terminology but selectively defining their terms of use. Apache, FSF, Eclipse, and OSI have invested considerable effort in building their own brand around their license and the open source term. We don't need companies redefining the meaning of open source to suit their individual commercial needs. Commercial companies should use proprietary licenses for non-open source code.

I hope the OSI, FSF, Linux Foundation, Apache Foundation, Mozilla Foundation, Eclipse Foundation, and others band together to protect the integrity of their licenses and the definition of open source. As it stands now, the Commons Clause is a virus that could cause serious harm to the open source community.