Open Source software is software which is distributed as source code (often as executable software too) with a license that allows the source code to be studied and modified.  The license also allows for the redistribution of the software as long as the software distribution includes the source code and any modifications.

There are many thousands of Open Software based applications and modules – Linux and Mozilla Firefox are perhaps the two best known products followed most recently by the Open SSL software module (see heartbleed bug).

Open Software modules are routinely included and used in many non-Open Source software (also called proprietary) based products. Using popular Open Source software is often less expensive and often less risky from a quality perspective.  In my personal experience, almost every proprietary product I’ve worked on in the last 20 years has included one or more Open Source software modules or applications.

Does including Open Source Software in a proprietary software product require distribution of the proprietary software source code too – does it effectively transform the proprietary software into Open Source Software?  This is a common concern for companies that desire to make use of Open Source Software and do not desire to publish their source code – often considered highly confidential and valuable. Some of the Open Source Software licenses clearly permit including and using the Open Source software in proprietary products without transforming the proprietary product into Open Source Software – other licenses are less clear. Sometimes the method used to incorporate the Open Source Software can be the deciding factor.

More and more companies are implementing clear policies and processes regarding the use of Open Source software – especially since it is all too easy for software engineers to include such software – sometimes it’s nothing more than a simple copy-and-paste operation.  In fact, this topic is common on the popular software development question and answer sites -- not really the best way to get legal advice.

Alternatively, it is becoming more and more common for companies to distribute new and formally proprietary software as Open Source software. These companies are finding that their value isn’t so much tied to their source code being secret, but rather to their overall services and support they offer. IBM has recently adopted such a strategy for some of their software products.

For more information:

• Black Duck makes software that automates the auditing of source code to identify the existence of Open Software. 
• The GNU General Public License – a widely used license for Open Source Software
• A short Goldman Sachs video on recent trends in software, including Open Source and Cloud Computing.

• A white paper on LINUX Licensing