3/17/2004 - Sleepycat Software, Trolltech AS and MySQL AB jointly announced that 2003 software license revenues for the companies increased an average of 65 percent over the previous year, largely due to their use of the dual-license business model. This increase is 10 times the overall growth of U.S. IT industry spending in 2003, measured at only 6.4 percent, according to the U.S. Department of Commerce.
Trolltech AS, MySQL AB and Sleepycat Software are strong examples of second-generation open source companies that have established growing, sustainable businesses based on open source software. Both the business model and the open source software license are gaining increasing support in the IT industry. The companies provide dual-license software to some of the largest customers in the world, including Cisco, Google, IBM, Motorola, Sharp Electronics and Yahoo!, among hundreds more.
"Dual-license companies combine the software quality and distribution benefits of an open source model with the software licensing revenue model of a traditional commercial software vendor," said Dan Kusnetzky, vice president for System Software Research at industry analyst firm IDC. "This appears to be a successful business model. It offers customers seeking a traditional packaged software model what they want in terms of documentation and ongoing support. For those seeking freely available software and the open source model of community development and support, they get what they want."
As second-generation open source vendors, MySQL AB, Sleepycat Software and Trolltech AS make the majority of their revenue from selling software licenses. This license-based business model offers higher margins than services-based businesses. Historically, most open source companies have tried to make money by selling services and support.
The guiding principle behind dual licensing is "quid pro quo," or a fair exchange. Under this model, vendors offer their products under both an open source license and a commercial license. This allows open source projects to use the software at no cost, which contributes to widespread use and testing of the software and the fast growth of a large installed user base. Companies redistributing the software as part of commercial products can also get the benefits of the open source software by purchasing a commercial license, which releases them from requirements to publish their source code. Commercially-licensed customers generate revenue for the open source vendors, which contributes to the rapid development of high-quality software.
"Dual-license products give customers who redistribute a choice in license terms,'' said Eben Moglen, professor of law at the Columbia University Law School and recognized as one of the world's leading experts on copyright law as applied to software. "Proprietary commercial licenses can offer customers fewer restrictions on inclusion in closed source products and enable open source software developers to grow strong businesses. This model is a win for the free software movement too, as it ensures that dual-licensed software products will be developed and supported by viable companies, and also remain available for free copying, modification and redistribution for the long-term."
CEOs Mårten Mickos of MySQL AB, Mike Olson of Sleepycat Software and Haavard Nord of Trolltech AS, along with Bob Bickel of JBoss, speak today at the Open Source Business Conference on a panel that covers the best practices and guiding principles of the dual license business model and investigates the benefits and risks inherent in the model. The panel runs from 3:30pm to 4:15pm at the Westin St. Francis Hotel in San Francisco, California.
The three CEOs will discuss from the benefits of dual-licensed products and how customers gain all the advantages of open source software, such as:
In addition, customers gain all of the benefits traditionally associated with commercial software, including:
About MySQL AB
MySQL AB develops and markets a family of high performance, affordable database servers and tools. The company's flagship product is MySQL, the world's most popular open-source database, with more than 4 million active installations. Many of the world's largest organizations, including Yahoo!, Sabre Holdings, Cox Communications, The Associated Press and NASA are realizing significant cost savings by using MySQL to power Web sites, business-critical enterprise applications and packaged software. MySQL AB is a second-generation open-source company, with dual licensing that supports open-source values and methodology in a profitable, sustainable business. For more information about MySQL, please go to www.mysql.com
About Sleepycat Software
Sleepycat Software makes Berkeley DB, the most widely used application-specific data management software in the world with more than 200 million deployments. Customers such as Amazon, AOL, British Telecom, Cisco Systems, EMC, Ericsson, Google, Hitachi, HP, Motorola, Openwave Systems, RSA Security, Sun Microsystems, TIBCO and Veritas rely on Berkeley DB for fast, scalable, reliable and cost-effective data management for their mission-critical applications. Profitable since it was founded in 1996, Sleepycat is a privately held company with offices in California and Massachusetts. More information Sleepycat Software can be found at www.sleepycat.com
Trolltech® is a software company with two product lines: Qt® and Qtopia®. Qt is a multiplatform C++ application framework developers can use to write single-source applications that run -- natively - on Windows, Linux, Unix, Mac OS X and embedded Linux. Qt has been used to build thousands of successful commercial applications worldwide, and is the basis of the open source KDE desktop environment. Qtopia is the first comprehensive application platform built for embedded Linux, and is used on numerous Linux-based PDAs and Smartphones. Trolltech is headquartered in Oslo, Norway, with offices in Brisbane, Australia, and Palo Alto, California. More about Trolltech can be found at http://www.trolltech.com.
Sleepycat Software and Berkeley DB are trademarks of Sleepycat Software, Inc. Trolltech, the Qt logo, Qt, and Qtopia are registered trademarks in Norway and worldwide. MySQL is a registered trademark of MySQL AB in the USA and other countries. Linux is a trademark of Linus Torvalds.
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