The Rhyme and Reason of Dual Licensing

Marten Mickos

MySQL AB is a second-wave open source company that employs the popular "dual licensing" business model. This business model is becoming increasingly popular among open source companies, as it paves the way for long-term financial viability and profitable business. Dual licensing lets companies provide warranted commercial software licenses to their customers, while at the same time offering their software under an open source license to all who wish to use, modify and distribute it freely.

What is the secret formula, and how does dual licensing work? Here is the logic behind this business model.

The guiding business principle of MySQL is one of fair exchange, or Quid pro Quo ( "something for something"). We have over 4 thousand paying customers who have chosen the commercially-licensed MySQL server, and we have over 4 million users who use MySQL under the GNU General Public License (GPL). Technically, the two products are identical, but contractually, they are not.

Our paying customers get what they pay for: a commercially supported product with a level of assurance from the vendor and without any typical open source requirement that linked software must be open sourced as well.

Our community of 4 million users under the GPL also get a great deal: a piece of software they can look at, modify, integrate, distribute, and so on, for no cost, as long as they abide by the GPL Understandably, the GPL offers no warranties or indemnifications or other forms of vendor accountability.

Here is the quid pro quo of it. Thanks to our commercial customers, we can afford to develop and improve the product at a fast pace. That means better software and more software for the free software community. And thanks to the huge user community, MySQL undergoes rigorous "battle-testing". We deliver more than 35,000 new product copies to our user community every single day. They are some of the smartest developers around, and they make the MySQL software do tricks others didn't think of. As a result, bugs are fixed and improvements made at a very rapid pace. Consequently, our commercial customers get a highly reliable product where most bugs have already been found and fixed. At the end of the day, all groups involved get back more than they put in, i.e. a fair exchange of value.

Our dual licensing is an open scheme where you, the user or customer, is in the driver's seat. You decide which license is best for you, and you are free to switch from one to the other and to mix the two models. If vendor accountability is important to you, you are likely to become a commercial customer of ours. If free software is important to you, and you are happy to follow the terms of the GPL, then you are likely to become a user of MySQL under the GPL license. Technically, you will get the same software in both cases. It is only the legal implications and the assurance of service that differ.

Irrespective of which license you choose, the overall picture means great savings. Thanks to our innovative licensing scheme, we are capable of producing superior software at a much lower cost than is typical in this industry. Our prices are so low that some people believe we are publicly funded. But that's not the case. MySQL makes good profit on its commercial licenses, even though they come at a fraction of the price of alternative solutions.

Our attractive pricing has to do with our mission. We have stated that we want to make superior database software available and affordable to all. When we offer MySQL at the flat fee of $495 per server, the aim is to make it affordable for everyone (you will have to add a zero or two to the price if you choose some other solution). This price is still good business for us, and it allows us to further expand our organization to produce more good stuff for you.

The dual licensing model was created in the 90's by MySQL and other forward-looking open source companies. Today it is in use by a growing number of open source companies, and it is the only licensing model that made it to the magic upper right quadrant in a study by Forrester Research, where it was deemed both "strong" and "friendly." Dual licensing allows companies to build viable long-term businesses while at the same time accommodating the needs of the open source / free software community. And, as an added benefit, legal concerns about the origin of the software can be dismissed. Charlie Garry, research analyst at the META Group, has said that, "The dual licensing model is becoming a blueprint for a successful open source business."

Without this model, we might not have been able to keep ALL our software under an open source license, and we may not have been able to build a world-wide support organization for our commercial customers, as we have today. We believe this is the right way to go for enabling customers to get the best software at the most affordable prices.