Welcome back to the deep dive. So today we're
tackling something that is, well, it's pretty
much the foundational layer of all modern technology.
We're talking about open source software, you
know, OSS. And for most of us, especially if
you're not on a development team, you hear open
source and you just, you immediately think free.
Right. Free as in it doesn't cost anything to
download. But that view is so simplistic and
it completely ignores the immense economic power
behind it, the strategic advantages and frankly,
the critical operational risks involved. OK,
let's unpack this. We really need to move the
conversation from thinking of OSS as like a niche
hobby project to what it actually is. It's a
global multi -trillion dollar industry and it
demands an intentional strategy, not just accidental
adoption. Exactly. So our mission here is to
give you that strategic framework you need so
you can really get the benefits of OSS while,
you know, protecting yourself from the risks.
And let me just set the stage with something
I can say with a near certainty. If your company
develops any kind of software, you're already
using open source. Oh, for sure. Whether you
know it or not. Absolutely. It's likely running
your infrastructure. It's embedded deep inside
your commercial products. It's in your supply
chain. The prevalence is just, it's staggering.
And that's why moving from just passively using
it to strategically managing it is probably one
of the most critical decisions a leader can make
right now. So let's nail down the definition
first, because the philosophy here is actually,
I think, pretty profound. It's about capturing
the world's collective intellectual effort, all
this creative freedom, but as code. It's brilliant
people from all over the world collaborating
to build software that is, by design, open for
everyone to see, to contribute to, and to use.
And that transparency is really the key. I mean,
to be officially called open source, the software
has to meet several criteria that guarantee that
freedom. The absolute core principle is that
the source code has to be available. Anyone using
it has to be able to look inside. Transparency
isn't a feature. It's the prerequisite. OK, so
having the code available is step one. But it's
the license, right? That's what actually grants
the rights to do things with it. Precisely. It
must be free to be redistributed. And crucially,
you're allowed to create derived work. Meaning
you can build on top of it. Yes, you can take
that code, you can modify it, and you can build
your own innovation on that open foundation.
But, and this is important, you have to maintain
the integrity of the original author's source
code. And our sources are clear this goes way
beyond just the code itself. It's about a complete
lack of restriction. It is. The license has to
be distributed with the code. But it can't discriminate
against anyone. No discrimination against people,
groups, fields of work, or even technology. So
a license couldn't say, you can only use this
on brand X hardware. Exactly. That would fail
the definition. Open source grants, quite literally,
freedom of software. Now, when companies use
this software, it seems to fall into two main
buckets. The first one is frameworks and libraries.
Yeah, think of these like components, Lego bricks
almost. They're these modular pieces of code
that do one very specific thing. Maybe it's a
cryptography library or a really sophisticated
graphing tool. So it's not the whole application.
Never. They're always meant to be just one piece
of something much bigger. And the second category
is solutions. Solutions are the applications
themselves. They're standalone. A full chat program,
a database system. You can use it on its own
without plugging it into anything else. OK, let's
talk about scale. Because this is where the conversation
really shifts from a philosophy about code to
just massive industrial dependency. I want to
repeat this number because it's wild. It's estimated
that 96 % of all software code bases in the world
use open source components. 96%. And even more
critical for business, commercial applications.
The software that companies actually sell can
be made of up to 99 .9 % open source code. That
99 .9 % number, it often trips people up. They
ask, why would a company sell something that's
almost all free stuff? Right. The answer is all
about efficiency and focus. And this is where
that medical device example really clears things
up. Can you walk us through that again? Of course.
So let's imagine a super complex proprietary
medical device. The company's core innovation,
their secret sauce, their IP, is all centered
on one critical function. Let's say it's ensuring
the extremely precise timing and dosage of a
drug delivery. That's what they spend billions
on R &D for. That's their unique value. That's
why a hospital pays a premium for their device.
Exactly. Now, that same device also needs to
do other things. It has to connect to the hospital
network, handle security, respond when someone
presses a button, draw a graph on a little screen.
All necessary things, but they're basically generic
IT problems. They are generic IT problems. Yeah.
And these problems have been solved and debugged
and optimized thousands of times over by the
open source community. So why reinvent the wheel?
Why would you? Why would that manufacturer spend
its precious time and R &D budget rewriting a
networking stack? They just leverage robust,
well -tested open source for all those adjacent
needs. So when you see that 99 .9 % figure, it
just means they were being smart. They focused
their proprietary effort only on that tiny fraction
of a percent that was their real market differentiating
innovation. And the economic impact of this model
is just, it's colossal. There was a Harvard study
that tried to put a number on this. They looked
at the supply side value, so what it would cost
to actually produce all these common open source.
libraries, and they put that around $4 billion
a year. Which is a big number. But the truly
staggering metric, the one that should make everyone
sit up, is the demand side value. OK, so this
is the value that the companies using the software
get. This is the value they capture. So if you
calculate what they would have had to pay for
commercial licenses for their own internal R
&D to replace all that open source, the value
delivered is estimated at $8 trillion. $8 trillion.
That single number just fundamentally changes
how you have to think about OSS. It's not a free
gift. It's a foundational piece of the entire
global economy. And that study had another key
finding. Large companies would have to spend
three and a half times more on their software
development if open source suddenly disappeared.
Yeah. That's the sheer scale of the leverage
and productivity we're talking about. Here's
where it gets really interesting because beyond
just saving money, there are six key strategic
reasons for companies to adopt OSS. This is about
competitive advantage. And the first one is fundamental.
transparency and trust. Because the code is all
out in the open if you're, say, a major bank
or a critical infrastructure operator, you have
the ability to audit and inspect the code running
on your most vital systems. You can actually
check it yourself. You can verify its integrity
yourself, which means you can make a truly informed
decision about whether or not to trust it. And
number two, it massively boosts productivity
and interoperability. It does, because OSS is
almost always built on open standards. It just
naturally promotes interoperability, which is
the exact opposite of getting locked into one
specific vendor. Let's dig into that vendor lock
-in a bit more, which is reason four. With proprietary
software, you often hear about the friction of
an MSA. For our listeners, what's an MSA here,
and how does open source get around that? So
an MSA is a master service agreement. It's this.
This huge legal contract you sign with a proprietary
vendor. It defines everything, support, pricing,
usage terms, and critically, how hard and expensive
it is to leave them. The switching costs are
huge. Immense. The legal and financial hurdles
to pivot away are just massive. OSS completely
bypasses all that legal friction. So if I'm using
an open source graphing library and it's not
working for me anymore, I can just swap it out
for another one tomorrow morning without months
of renegotiating contracts. Exactly. No penalty
fees, no lawyers. That flexibility is a massive
strategic advantage. Then there's number three,
open collaboration. This one is fascinating.
You see developers from companies that are direct
market rivals. Think competing cloud providers,
all working together on core projects that push
innovation forward for the entire world. It's
an incredible engine for progress. And moving
to number five, it's often the fastest way to
get your hands on emerging technologies. That's
right. When a hardware company like Intel or
AMD create some new cutting edge capability,
let's say in confidential computing, the very
first libraries and code showing how to use it
are often released straight into the open source
community. It allows for super rapid experimentation
long before the polished proprietary tools are
even ready. And then finally, number six, the
obvious one, cost reduction. The software is
free to download and use, which is a powerful
alternative to expensive proprietary tools. But.
And this is the crucial pivot point of our whole
conversation. This brings us to responsible consumption.
Just because the code is free and available,
it doesn't mean it's good. It doesn't mean it's
robust or secure. Not all open source is created
equal. And not all of it is enterprise grade.
Not at all. So we should probably define that
term. If I'm making a strategic decision, what
makes a piece of OSS enterprise grade versus,
you know, just something a hobbyist built in
their garage? Enterprise grade means it comes
with the kind of features and institutional support
you'd expect from proprietary software. So you're
looking for things like engineering help and
support, documented and timely security patching,
a mature feature roadmap with clear timelines,
and this is maybe the most important, guaranteed
long -term support or LTS. LTS. So that means
they'll keep it updated for what? Often five,
10, even more years. It's a promise of stability
and access to updates. Okay, so if a company
hasn't formalized a strategy for this yet, they're
basically using a critical $8 trillion piece
of their supply chain without assessing their
risk. Let's give our listeners the key risk assessment
questions they need to be asking. The first question
is purely operational. What are our support requirements?
If you're using this code in a core business
function, something that absolutely cannot go
down, you need enterprise -level support SLAs
and guaranteed patches. But if it's for an internal
R &D project? Then you might favor innovation.
That would be perfectly fine with a community
best effort model. And that kind of dictates
the whole stability versus cutting edge trade
-off. You might use the newest library on a dev
board, but when that product ships, you have
to prioritize stability. Exactly. And that leads
directly into the highest risk area of all, which
is licensing. The third question has to be, what
type of license are you OK with, and are you
100 % certain you are using it correctly? This
is where the legal risk gets really intense.
I know there are dozens of licenses, but maybe
we can talk about the two big families and the
danger one of them poses. Absolutely. So on one
side, you have permissive licenses, things like
MIT or Apache 2 .0. These are generally pretty
safe for commercial users. They let you use the
code in your proprietary product without forcing
you to open source your own work. But then there's
the other category, the one that creates a significant
risk for companies that want to keep their own
code secret. That's the copyleft license family.
The most famous one is the GPL, the general public
license. Copyleft licenses are often called viral.
They have a condition that says if you create
a derivative work from this code and then you
distribute it, you might be legally obligated
to release the source code of your entire derivative
work. Including your own proprietary code that
you mixed with it. Yes. all under that same open
source license. So if you use a copy left library
the wrong way, you could be legally forced to
open source your company's secret sauce. The
very thing you plan to sell. That's a commercial
catastrophe. Yeah. It is the single biggest legal
risk in this whole space. The math flips entirely
when your free library suddenly means you have
to give away your core IP. You absolutely must
have your legal team involved to understand the
precise boundaries of what derived work and distribution
mean under these licenses. And then there's that
other risk we touched on, the operational one,
the abandoned life. Yeah, you build your product,
the one you're promising to support for 12 years
on this great piece of OSS. But three years in,
the main developer gets a new job, moves on,
and crickets. the project just dies. What happens
then? Well now you have a critical dependency
that's not getting any new features and much
worse, no security patches. So you either have
to take on the maintenance burden yourself, basically
funding the project internally, or you have to
scramble to re -engineer your product with a
different supported library. It's a huge, tangible
risk. Okay, so we've laid out the need and the
risks. Let's get to the action. What are the
concrete steps a leader should take to start
moving toward responsible adoption? The single
most important first step is creating an internal,
formalized, open source strategy and policy.
Every single company that develops software needs
one. and it can't be ambiguous. So what are the,
say, three non -negotiable things that policy
has to lay out? First, acceptable license types.
It has to clearly state if copy left licenses
are ever allowed, and if so, only in very specific
cases, like internal only tools, never in a customer
product. Second, acceptable use cases. Can we
use this for R &D prototyping or only for final
products? And third, required support levels.
When is enterprise support mandatory and when
is community best effort okay? And I assume you
absolutely have to bring your legal team in to
create this. That is mandatory due diligence,
yes. Your lawyers need to sign off on the acceptable
license list and what it means for your specific
business model. And for anyone listening who
wants a good template, you suggested maybe a
surprising source. Yeah, look at the public sector.
The U .S. Center for Medicare and Medicaid Services,
CMS, developed this incredibly intentional and
public open source strategy. They detail exactly
which licenses and in what situations their organization
can use OSS. It is an excellent structured template
for how to do this right. OK, so to put this
into practice today, we've got three immediate
action items for our listeners. The first, you
have to identify where you're already using open
source. Because if you don't have a policy, I
guarantee you're using it. So mandate the use
of software composition analysis SCA tools. Get
a detailed inventory of every single open source
component and its license in your infrastructure
and products. You need to know your exposure
right now. Second, start looking for new opportunities
where using OSS gives you the biggest bang for
your buck, whether that's cost savings driving
innovation or just reducing that future vendor
lock -in risk. And third, establish that formal
policy we just talked about. Be intentional.
Use that policy to guide your path to a truly
responsible and sustainable adoption model. So
we started this by calling open source free code
and we've landed on a multi trillion dollar industry
that is the engine of modern technology, an engine
that requires serious, sophisticated strategic
management. The freedom and transparency it offers
are, well, they're invaluable, but that intentional
due diligence around licensing and support is
the only way to protect your own interests while
still benefiting from this incredible global
innovation. So what does this all mean? Well,
we established that the demand side value, the
value captured by commercial companies using
open source is about $8 trillion a year. And
yet, the developers and communities creating
that fundamental software often struggle for
sustainable funding. So here's the thought I'd
leave you with. Given the immense financial value
and leverage these major corporations are getting,
what is the ultimate ethical and maybe even long
-term business responsibility of those consumers
to ensure the sustainable funding, the continuous
security, and the vibrant community activity
of the very open source projects they are completely
dependent on for their own profitability? That's
the strategic challenges worth exploring long
after this deep dive is over.