Elastic changes open-source license to monetize cloud-service use

The business-model war between open-source software vendors and cloud providers heats up with Elastic taking on Amazon Web Services.

Elastic is tackling Amazon Web Services' (AWS) with its new license change. When Elastic, makers of the open-source search and analytic engine Elasticsearch and its companion data visualization dashboard Kibana, announced it was moving both programs' source code from the Apache 2.0-license to the Server Side Public License (SSPL) and the Elastic License, you might have thought, "Who cares?" Oh, but if you use the Elasticsearch, Logstash, and Kibana (ELK) stack on the cloud, like Netflix, LinkedIn, Walmart, and thousands of other major companies do, you may end up caring a lot.

True, as Elastic stated, "This change in source code licensing has no impact on the overwhelming majority of our user community who use our default distribution for free. It also has no impact on our cloud customers or self-managed software customers." But while in sheer user numbers that may be true, when it comes to commercial use numbers, it's an entirely different story.

That's because many large businesses don't have contracts with Elastic. Instead, these companies use Amazon Elasticsearch Service. Elasticsearch is also available on other major public clouds such as Elastic on Azure or Elastic on Google Cloud, but in those cases, Elastic has a business relationship with the cloud providers. That's not the case with AWS, the King Kong of public cloud services.

Elastic explicitly states: 

So why the change? AWS and Amazon Elasticsearch Service. They have been doing things that we think are just NOT OK since 2015 and it has only gotten worse. If we don't stand up to them now, as a successful company and leader in the market, who will?

Our license change is aimed at preventing companies from taking our Elasticsearch and Kibana products and providing them directly as a service without collaborating with us.

For AWS or any other cloud provider to offer Elasticsearch services under the SSPL, they'd need to agree to its poison pill. If you offer such services, you must all open-source in your hosting cloud's infrastructure. The vast majority of AWS software is already open source, and AWS isn't likely to ever agree to open source all the rest of it.

In fact, we know this is true because when AWS was first faced with the SSPL, it responded by forking the code rather than agreeing to this license. MongoDB, an open-source document NoSQL database company came up with the SSPL. Its intention was the same as Elastic, it wanted a share of the vast profits that AWS makes from offering Elasticsearch services in its cloud offerings.

Eliot Horowitz, MongoDB's CTO and co-founder, argued for this in the Open Source Initiative (OSI) discussion on whether the SSPL was truly an open-source license.  

We believe that in today's world, linking has been superseded by the provision of programs as services and the connection of programs over networks as the main form of program combination. It is unclear whether existing copyleft licenses clearly apply to this form of program combination, and we intend the SSPL to be an option for developers to address this uncertainty.

The OSI didn't buy that argument then, and the organization doesn't buy it now. In a statement, the OSI stated flatly: The SSPL is Not an Open Source License

Further:

Open source licenses are the foundation for the open-source software ecosystem, a system that fosters and facilitates the collaborative development of software. Fauxpen source licenses allow a user to view the source code but do not allow other highly important rights protected by the Open Source Definition, such as the right to make use of the program for any field of endeavor. By design, and as explained by the most recent adopter, Elastic, in a post it unironically titled Doubling Down on Open, Elastic says that it now can 'restrict cloud service providers from offering our software as a service' in violation of OSD6. Elastic didn't double down, it threw its cards in.

As for AWS, in response to MongoDB, it launched DocumentDB, a database, which "is designed to be compatible with your existing MongoDB applications and tools," wrote AWS evangelist Jeff Barr at the time. There's no reason to think that AWS won't do the exact same thing this time.

Don't think, however, that AWS is just a taker here. As Adrian Cockcroft VP of cloud architecture strategy at AWS remarked in 2019:      

When AWS launches a service based on an open-source project, we are making a long-term commitment to support our customers. We contribute bug fixes, security, scalability, performance, and feature enhancements back to the community. For example, we have been a significant contributor to Apache Lucene, which powers Amazon Elasticsearch Service.

Cockcroft continued:

Elasticsearch has played a key role in democratizing analytics of machine-generated data. It has become increasingly central to the day-to-day productivity of developers, security analysts, and operations engineers worldwide. Its permissive Apache 2.0 license enabled it to gain adoption quickly and allowed unrestricted use of the software. Unfortunately, since June 2018, we have witnessed significant intermingling of proprietary code into the code base. While an Apache 2.0 licensed download is still available, there is an extreme lack of clarity as to what customers who care about open source are getting and what they can depend on. 

At the time, AWS, Cockcroft said, "Our intention is not to fork Elasticsearch, and we will be making contributions back to the Apache 2.0-licensed Elasticsearch upstream project as we develop add-on enhancements to the base open-source software."

As far as Elastic is concerned, however, what AWS has been doing is:

Not OK.  Our license change comes after years of what we believe to be Amazon/AWS misleading and confusing the community - enough is enough.

We've tried every avenue available including going through the courts, but with AWS's ongoing behavior, we have decided to change our license so that we can focus on building products and innovating rather than litigating.

Moving forward, this new non-open "open-source" license will be another matter. I fully expect to see AWS-sponsored Elasticsearch and Kibana forks. 

Stephen O'Grady, open-source licensing expert and co-founder of RedMonk, the developer-focused analyst company, thinks: "Clearly Elastic is legally within their rights to make the change, but I am not in general a believer that licenses are a solution to business model issues. I also believe that unilateral changes to licenses intended to solve one perceived problem are likely to in turn create unanticipated other problems."

For businesses that currently use the ELK software stack, stay tuned. You may see increased costs or find that your cloud provider is urging you to switch to their homebrew ELK stack based on the software from before the new license took effect.

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