Commercial open source, a misnomer?

Commercial open source, a misnomer?

Summary: I received an e-mail from Simon Romanski, director of information systems at Fulfillment America, asking about the nature of open source software and its intersection with commercialism. Open source software (the code) is free and open.

TOPICS: Open Source

I received an e-mail from Simon Romanski, director of information systems at Fulfillment America, asking about the nature of open source software and its intersection with commercialism. Open source software (the code) is free and open. You can pay for support, packaging, reliable distributions. If in what's called commercial open source, the code isn't all free, then should it be marketed as open source? It's a bit of a long story, so forgive the length. Here's Simon's original e-mail to me:

I have been doing a great deal of research recently into Web-based applications for businesses that are more specific than your typical portal providers like  In particular, I have been focusing on the Web-based CRM providers. In this arena two companies have gotten a great deal of attention: and SugarCRM

The reason why I wanted to learn more about SugarCRM was because I thought it would be interesting to see if an open source product could actuallly compete with a purely Web-based service like offers. has to be given credit for getting companies to host  company sensitive information offsite at an ASP.

I decided to pull off the open source version of SugarCRM and find out what it really takes to get the system up and running. It took me two days of fiddling around with installing Apache, PHP and MySQL on a weak Windows 2000 machine (was also trying to get it working on Linux without much luck) just to get the SugarCRM install process to work. In the end I pulled off a version that had everything wrapped up into one executable which worked very well. By trade I am a web developer, not a programmer, I really can't complain that I had a hard time getting Sugar up and running.

When I finally got to the SugarCRM login screen my initial reaction was, 'Wow, this is amazing, salesforce had better watch out because these guys are moving, and they're moving fast.'

However, it didn't take me long to realize that there is a HUGE part missing in the open source version. That part is the ability to do grouping and to have various access levels that you can assign to these groups (SugarCRM calls them teams). For most organizations the inability to control users from deleting each other's contacts, schedules, leads, etc. makes it totally unrealistic to use. You can't exactly explain to everyone who you give an account to that they shouldn't delete information that other people have entered into the system.

Subsequently, Simon sent an e-mail to SugarCRM:

Thursday, August 25, 2005 7:58 PM To: Subject: OpenSource

I don't get it. You say that SugarCRM is open source however the latest version (3.5) of the open source version still doesn't have the ability to group people (or as you call it teams). Now your Pro version has had the ability to do teaming since at least version 2.0.  I can't help but think that this being a critical function of a CRM system is intentionally left out in order to steer people to the commercial version of you product.

Am I wrong here?


SugarCRM responded as follows:

Thank you for your interest in SugarCRM. On any given release 50% if our development goes back into the Sugar Open Source project.  Given that you mention our 2.0 release, I am sure you have seen our open source project grow over the past few releases. Additionally with our module loader released in 3.5 the open source community has even more tools to easily develop functionality to be used with Sugar Open Source. In regards to decisions regarding which features go into each version of Sugar Suite are made by our product management team. That said, as a company we encourage feedback from our community and I will make sure your email is forwarded to them.  Please let me know if you have any additional questions, and please continue to enjoy Sugar!

Simon replied:

First of all, thank you for your quick response. Who ultimately controls the Open Source version? I see many requests for the grouping functionality in the forums.
If you update the Pro version of SugarCRM (which is itself based on the open source version) aren't you supposed to disclose those changes to the OS community? Or is it that the Pro version was always commercial and the the OS version was a subset of that version? Is there a certain amount of time that can pass before you disclose the changes back to the community?

While there have been a great deal of changes made to the open source version I can't help but think it will be a long time before the grouping functionality ever hits this version. 

Simon's impression is that SugarCRM is using open source as a marketing tool, and in reality is just another commercial company.

Certainly, SugarCRM is one of many companies mixing open source and semi-open (paying customers can access the code and extend it under specific terms and conditions) or closed (proprietary). It's the mixed, upsell model that typically includes a free open source version for the lowest end of market (individuals, small workgroups) sans support, and for fee versions under various open source licenses. The SugarCRM Public License Version consists of the Mozilla Public License Version 1.1, modified for SugarCRM. Below is what you can do with SugarCRM's license, taken from the Web site:

What am I allowed to do with code that is covered by the SPL?
All kinds of great things! We are dedicated to building the strongest and most involved open source community possible. The SPL allows you to:
a. Run the world's best CRM system for your business.
b. Implement and integrate SugarCRM for companies.
c. Fix bugs.
d. Build new programs leveraging our APIs.
e. Freely distribute the SPL-covered source code.
f. Share contributions.
g. Sell new modules that you create under a license other than the SPL.

What am I not allowed to do with code that is covered by the SPL?
a. Sell any SPL-covered code.
b. Sell derived works of SugarCRM.
c. Restrict access to derived works of SugarCRM. If you make a code modification available to one person, you are required by the SPL to make that derived work freely available to everybody.

Can I sell new SugarCRM modules I create?
That depends. If you write a new module that is not a derived work (see below), then you own that code and can do with it what you please. In other words, you can sell it and distribute it under any license you wish. The key is that you can't sell a derived work of the original SugarCRM code or any other code covered by the SPL.

Given that 50 percent of the development of any version of SugarCRM isn't available to the open source community as free open source, based on the above e-mail from a SugarCRM representative, then SugarCRM is only partly open source, hence 'commercial open source,' but that is somewhat misleading.

I understand commercial grade open source or fees for support, maintenance services or special code or add-ons, but commercial open source as holding back features from the community? There's nothing wrong with the business model (it helps to ensure survivability), but attaching open source to it implies all the code is open to the community, as with Linux and the GPL license, not just to paying users. How about hybrid source as a better, but less marketable, term?

I chatted with SugarCRM's CEO John Roberts to get his side of the story. "Software costs money to build," Roberts said. "We are a commercial software company. Free is for 15 to 20 person implementations. Pro and Enterprise are for larger enterprise where team selling makes sense."

"We don't want to write software that doesn't needs a lot of support. We are only holding back things relevant to larger enterprises," he added.  [Note on the correction: Roberts sent an e-mail on 8/31 requesting the change above. He said that he meant to say that his company wants to write software that doesn't require a lot of support.]  

SugarCRM also employs 18 full-time developers (out of a staff of 36) and works with about 50 other developers who have assigned Sugar CRM rights to their code under an Apache assignment agreement. "We never have anything in the Pro or Enterprise versions from outside developers," Robert's said. Contrary to what the SugarCRM rep told Simon, Roberts said that about 25 percent of the development for the new version(3.5) just released is held back from the free 'pure' open source version (also 3.5).  Red Hat is more of a harvester of open source software, compared to SugarCRM, mySQL or Zend, which offer commercial versions, Roberts said.

As an alternative to SugarCRM's non-open source open code, SugarForge has modules, tools, language packs, skins and other code, as well as associated projects created by the Sugar Open Source community. Roberts said SugarForge has 900 registered developers and 90 extension projects. "Version 3.5 has a module loader, a framework that allows developers to write extensions, package them and post them so that end users can load them without any programming," Roberts said. 

In other words, if you don't want to pay SugarCRM, go out and build your own free distribution and support it yourself or via another firm. "Our business model is based on an open source project, for which we actively develop the product and provide full support," Roberts said. The open source development methodology results in better software than black box, proprietary implementations, but the non-profit, open source model of a collection of developers who only work part-time doesn't cut it, he said. "We can produce vastly more code and functionality than we could part-time." And, you can keep some of the code behind a pay wall to help the sales effort. 

"We don't believe in just providing a binary. We are really a community within a community. We are extremely fair and strict. We would never take something from a developer and put in a commercial product," Roberts continued. "People are comfortable with a hybrid model. They like the code, the application, the way the release cycle is managed, the cost and having input. It's ok to hold back a little bit, and we are consistent release to release for larger organizations. And, other parts of the community are ok with it because the larger organization funds the open source development. Commercial open source is in a gray area--we have to have clean separation between free and commercial versions." 

A gray area indeed. Given what Roberts has said, the company should adjust the statement on its Web site about open source to be more in line with its commercial practices: 

At SugarCRM, our source code is available to all. Download it, install it, run it for free or upgrade to a commercial license - your choice. Our bug lists are published, our feature roadmap laid out, our quality assurance testing shared with real customers - in real time. We only want to be paid once we have proven we have generated value for your company, not one minute sooner.

Postscript: Simon received an e-mail from Clint Oram, one of SugarCRM's founders and director for the SugarCRM open source project. Oram said that his company is looking at releasing the group permissions functionality that Simon requested into the Open Source edition in an upcoming release...   

Topic: Open Source

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  • They are just exploiters!

    By the open source charter, any s/w based on open source should be free! It cannot be half free and half commercial. They should charge only for service. The charter clearly says that they should provide free any drivative products.

    Commercialism is a way exploiting devlopers (I say idiots) who have contributed precious time for nothing. In this sense, Linus should tax those commercial companies and distribute rewards to those who contributed to open source projects.
    • Is that true?

      I thought "open source" meant exactly that - open source, not free source. Does the 'Official Open Source Charter' specify that all source code must be free as well as open?

      Carl Rapson
    • Follow-up

      I thought the mantra was "free as in speech, not free as in beer".

      Carl Rapson
    • Who are they exploiting?

      Did you read the article? This company *wrote* SugarCRM and released it under an open-source license. As the author of the source code, they -- and no one else, as you correctly point out -- have the right to do anything else they want to with it, include keeping some of the code "closed."

      Yes, there are outside contributers; and the code written by these people "who have contributed precious time" is kept in the fully open version of the product.

      So ... who are they exploiting? Themselves? Can we please read these articles and fully understand the issues before issuing a knee-jerk response?

      P.S. There is no "open source charter."
      • There is an Open Source Charter

        Quoted from "spamagnet"
        "P.S. There is no "open source charter.""

        Actually, There is an Open Source Charter...

        Found here:

        But I believe the orginal author meant to mention the Open Source Initiative found here:

        • Granted...

          ... but the implication of the original poster seemed to be that everyone involved in open source belonged to some overarching organization. Ain't true.
          • Well the OSI does seem to be the go to group...

            Not that everyone is involved in it, but the OSI seems to be a group that is trying to keep the definition of Open Source true.

            The way I see it, SugarCRM isn't Open Source. It's just that they choose to show you their source code. Everyone that shows you their source code isn't Open Source.

            SugarCRM uses the Open Source title to pull in the masses, but then they can't handle them. Just look in their forums. Look at the unanswered questions.. the BUGS that haven't been worked out..

            IN a TRUE Open Source environment, the application would be more adapted by the community. SUgarCRM isn't so far.. It's running on Marketing on Hope and the "THOUGHT" of it being a good CRM program.. Right now, with the missing features, and BUGS, I wouldn't put it into production with my REAL DATA.

  • OSS / Commercial are not the best of bedfellows..

    Doesn't this highlight the problems of trying to sell software for free????

    OSS is great, should be supported and is driving software development forwards, but you cannot try and directly market essentially free code.

    I see no problem with what Sugar are trying to do, but I can imagine the ranting that will follow when the OSS community believes that it is somehow being "short-changed" by not having free access to ALL of the code, regardless of whether it is free or not.

    Let the asylum-escapees commence.
    • OSS is not FOSS

      I agree that there is nothing wrong with the business model.

      I however think that the article is about using OpenSource for marketing instead of being true to what the intent was.

      Opensource is not a trade mark or patented term so technically anyone call what they are doing opensource.

      I know of a company that says opensource but the only way you can get a copy is to purchase it and then the license will include the source code. Is that not opensource. I also know of software that us free to use but you cannot access the source code. Adobe reader is one.

      Does opensource require open development and contribution or is this simple about access to the code.

      I also think that we sometimes mix the philosophy of the Free and Opensource Software Foundation(FOSS) with those of opensource foundation (and worse mix it sometimes with Linux).

      Having said that I do have a problem with someone selling me something and then when i open it is not what i expected.

      Suse Linux and redhat has a FOSS version. The also have commercial opensource versions. I know that and I know the difference.

      I have always thought that SugarCrm was actually opensource which was why I have considered it.

      It is not dual source like mysql where everything is available. Actually it is closed with a stripped down (lite) version available for free so that the marketing department can say OpenSource.

      For those who wonder how does opensource companies make money. Apache does and it does not have a commercial version. MySql does with a fully operable dual source license. So does compiere and others.

      Maybe the person should check out vtiger it is an opensource derivative of sugarcrm.
  • We All Have To EAT!!!!

    Just proves everything can't be free, because people are out to make money. Companies will use Open Source to use as the base for their applications and add the "modules" and special add-on features that really drive the sales of the software for a price.

    I know the zealots hate MS, but Bill is feeding alot of families!!! I believe soon this will be the model for those companies who are using OSS. They will reel you in, thinking it is free, then those special features that you really want will come at a price.

    A company is in business to make money, PERIOD!
    • Correct ...

      Really, unless there was a HUGE (as in VAST) amount of profit to be made ... OS would still be in the basement basically. Without Red Hat, Suse, IBM and companies like 'Sugar' being able to make huge profits, what would be their point?

      There is nothing wrong with someone making profits. However, there should be a very distinct disclosure as to what you get with their 'open-source' and their paid version. They should NOT claim to be OS with a crippled version of what actually works as in the case of the emailer. The OS part is crippled to the point that it is unusable by his company without paying whatever fees they want for the 'pro' version.

      Also, if you read between the lines, it would be highly unlikely you COULD write a module that could not somehow be Interpreted as being derivative of their proprietary code. I guessing any module writers have found that out already.
      • Do the comparision yourself..

        To quote you Gman:

        "Also, if you read between the lines, it would be highly unlikely you COULD write a module that could not somehow be Interpreted as being derivative of their proprietary code. I guessing any module writers have found that out already."

        I believe you hit the nail squarely on the head! The developers of the majority of the modules, if you will look deeper, are people that are forming business in and around SugarCRM and the SugarTeam.

        People that release the modules are mostly looking to gain favor with the SugarTeam, to become a vendor partner, or a preferred Developer. I am not saying that there haven't been some people that have released modules without intention, but the numbers of these people I believe would be very low..

        Just look at the forums at the people releasing modules, and then go to the Sugar site and look at their "partner" list... You will see what I am talking about.

        Do a comparison at the forums at and the forums at and you will see that vTiger has a greater community standing behind them. They had people offering code left and right to improve/enhance the vTiger crm application. You don't see this to this great of a degree in the Sugar forums.

        This is because vTiger is true Open Source, and SugarCRM isn't. The community would rather help out and write code for vTiger rather than SugarCRM.

        The Major differences I see between vTiger and SugarCRM is:

        SugarCRM has VC money to do better marketing.

        vTiger has a better understanding of Open Source, and a large community standing behind it.

        Of the two, as a business man, I have to go with the application that has my best interests in mind. Marketing can only get you so far in life...

        • released modules without intention

          What does it mean to release a module without intention?

          In open source, people contribute for various reasons, including Recognition, Need to Be Part of Something and Marketing. No one ever gives their work away without a reason. "Just to be nice" is also a reason.

          Looking from the perspective of the systems integrator, there are good reasons to give away or not to give away a module, depending on the situation. We gave away the Teams module for SugarCRM, but sell our Reports module.

          Giving Teams away helped us demonstrate our technical competence and brought in other developers to help maintain it.

          If someone needs it updated or modified, they can either do it themselves, wait until someone does it, or pay someone (maybe us) to do it. The great majority of Open Source users wait until someone does what they need. That includes many companies selling services related to Open Source software. Rather than seeing this as freeloading, we see it as an opportunity.

          For example, we did not release our Reports module for SugarCRM because it allows us to offer a value-add that our competitors don't have.

          After almost 2 years thinking about Open Source and SugarCRM, we believe:

          a. Open Source does not equal free, nor should it.

          b. Commercial Open Source is generally less
          expensive, more convenient and easier to integrate than proprietary-source software.

          Best regards,

          David O'Keefe

          55 11 3668-6776
  • SugarCRM - feature holdback

    I've got no problem with features being reserved for the paid version but I would like to point out that the lack of the group permissions feature Simon asked about is preventing the opensource version of SugarCRM from being considered at some of the smallest of potential customers.

    As was pointed out, without this feature one user could, accidentally or intentionally, change records belonging to another user. Frankly, the bigger concern is simply that one user can even SEE the records belonging to another user.

    Salesmen leave companies. That they are going to take their own customer/prospect lists with them is a given. We can't be making it easy for them to take their co-workers' info with them as well. Even if the sales team consists of only two. Hardly a "larger enterprise".

    Cavan Kelly
  • Free is Free

    I don't know how these companies consider open source software free when some of them cannot even be used and just give one a small sample of what the full version can do. I don't think the dictionary has changed the meaning of free so change the wording and use trial instead of free. I consider this a breach of truthfully stating the sale of software and should be made to either seize the practice or face a fine that goes to the real open source people who really do give freely of theirselves. Buhda
    • Trial version? Hardly

      I have evaluated the free version of SugarCRM, and I'd hardly call it "trial." Maybe it doesn't fit every company, such as those with transient salespeople, but it's a darn hefty piece of software.
  • It's crippleware and deception

    By their own CEO, they are a "commercial software" company.

    SugarCRM is nothing more than crippleware or teaseware. Just a very small step up the software evolutionary scale from spyware, popups, and other annoyances all with one goal in mind - to make you buy something rather than give you something truly usable.
    • Who is being deceived?

      Deception??? Give me a break. The first time I went to the SugarCRM website it was obvious within 2 seconds that they had a free version and "Pro" or "hosted" versions that cost money.

      And I have evaluated the free version of SugarCRM, and it is NOT crippleware or teaseware. Certainly it won't meet everyone's needs, but it is a very comprehensive package.
    • Deception is the correct term!

      Yes, they tell you about the "free" version, and they also tell you about their Pro version or hosted version...

      But they don't tell everyone that the ideas of lot of the features in the Pro version, comes from the ideas of the people in the OS forums...

      The SugarTeam comes in and asks what do you want to see in this module or that module... and then everyone jumps in excited to help this thing grow.. They give all their ideas, and then.. when the feature is released... it's released only to the paying crowd...

      This very thing happened in the forums with the offline client.. They ask what we wanted.. We told them, and they said ok, it would be in the next release.. then they pulled the rug out from underneath us and only released it to the paying crowd.

      When asked about why this happened.. They had one of two responses.. One from Clint was "We got to pay the bills" and the other one from a Pro user was that the SugarTeam had used a commerical application and it was required to keep it as a paid for feature.. The SugarTeam never responded back to this claim.

      They go around asking everyone what they want, and deceive people by getting their hopes that features will expand when in fact we, the OS users, are working for free for SugarCRM as the "idea" machine.

      Over time, you will see several things happening.. One the OS features will become less and less <they will come from the users, but not from the SugarTeam> and you will see the Paid for products become more of a focus.

      You can already see this.. When SugarCRM first started out you could see Open Source all over and around their website... Now, go to their main page and see how many links you have to click just to get to their OS roadmap.. Or information about the OS version.
      • Developers vs. users

        I have no knowledge of their relationships with developers. I was simply responding to the suggesting that their web site was deceiving to *potential users*.