Understanding Open Source Software and Licensing

When we talk about buying software there are three distinct components:

• Ownership – Who owns the intellectual property behind the software?
• Money transfer – How does money change hands, if at all?
• Licensing – What do you get? What can you do with the software? Can you use it on only one computer? Can you give it to someone else?

In most cases, the ownership of the software remains with the person or company that created it. Users are only being granted a license to use the software. This is a matter of copyright law. The money transfer depends on the business model of the creator. It’s the licensing that really differentiates open source software from closed source software.
Two contrasting examples will get things started.
With Microsoft Windows, the Microsoft Corporation owns the intellectual property. The license itself, the End User License Agreement (EULA), is a custom legal document that you must click through, indicating your acceptance, in order to install the software. Microsoft keeps the source code and distributes only binary copies through authorized channels. For most consumer products you are allowed to install the software on one computer and are not allowed to make copies of the disk other than for a backup. You are not allowed to reverse engineer the software. You pay for one copy of the software, which gets you minor updates but not major upgrades.

The Free Software Foundation was founded in 1985 by Richard Stallman (RMS). The goal of the FSF is to promote Free Software. Free Software does not refer to the price, but to the freedom to share, study, and modify the underlying source code. It is the view of the FSF that proprietary software (software distributed under a closed source license) is bad. FSF also advocates that software licenses should enforce the openness of modifications. It is their view that if you modify Free Software that you should be required to share your changes. This specific philosophy is called copyleft.