AKA: Dual-Licensing, Multi-Licensing, Hybrid licensing,Resticted License, Proprietary Licences, License Exceptions
Different licenses forcing commercial users to pay a license fee to the open source project. Enables recurring payments often with support guarantees or SLAs.
Requires:
- Setup of a payment mechanism (hosted or self-build)
- Setup of a license for commercial-use
- Probably a legal entity needs to be founded to receive the payments
- Recurring "observation activites" to check if the OSS is in use by companies not paying
Variants & Options:
- Dual License: Single license for entities with a commercial use of the OSS
- Multi License: Different licenses for startups, freelancer, companies, universities, etc.
- Fareness.dev (programmatic payment checking system based on licences)
- None required?: Only one codebase and commercial users directly pay to OSS project's bank account
| Characteristics | Value | Note |
|---|---|---|
| Effort to set-up | Weeks | Creation of a commercial license and legal documents |
| Effort to maintain | Low | Maybe reminders that commercial use is needed |
| Cost to set-up | Medium | Will require a lawyer to setup the license and contracts |
| Cost to maintain | Low | Will cause costs for legal or tax related stuff (but should be covered by income) |
| One-time Income | High | Few companies might pay large amounts if the OSS is essential |
| Recurring Income | High | License can enforce recurring payments per month or year |
| Income Predictability | High | Companies probably need OSS for several years |
| Full income Threshold | 10+ | |
| Recipient | C | |
| Additional Work | Medium | Will cause communication and SLA related work |
| Visibility | Medium | Easy to overlook but should stand out in a tech due dilligence |
| Necessity to pay | High | However, companies might look for other solutions |
| Entry Threshold | Medium | Individual contracts between every OSS and company might be necessary |
| Countervalue | None | Legal commercial use |
| Scalability | Medium | Scales with the number of commercial users (who must pay) |
| Effort for marketing | Low | |
| Competitors | O | Depends on the original OSS licence: other companies could fork and develop it further with a proprietary license. |
| Software types | Special | Best for libraries or programs companies build tools upon |
NOTE: A CLA (Contributor License Agreement) may be required to accept code contributions from third parties to the source code while retaining the ability to dual-license those contributions under the proprietary license.