Open Source Licensing: Should SugarCRM adopt the AGPL?

The GNU Affero GPL v3 has recently been published, eventually closing the ‘Software as a Service Loophole‘, preventing code covered by AGPL to be offered as a service without modifications being published. Simon Phipps is surpised SugarCRM didn’t wait for Affero, while Michael Tiemann would like to see the AGPL tested in the marketplace.

Simon and Michael raise an interesting point, in this post my final objective is to understand whether SugarCRM should or not adopt the AGPL. First, some background on the CRM market and SugarCRM.

Gartner claimed that worldwide CRM software revenue is forecast to exceed $7.4 billion in 2007 and SaaS-based CRM adoption is growing at more than double the rate of the CRM market as whole.Despite SugarCRM’s Magic Quadrant position is not brilliant, SugarCRM appears to be pretty in the know compared to others, as results also from SugarCRM’s results.

Back in November 2007 John Roberts Sugar, SugarCRM CEO and co-founder, explaining “why attribution matters” wrote:

These folks were simply lifting our identifying marks and “pretending to the world” that they wrote software that they indeed had not. They also had no intention at all of adding to the SugarCRM project since that showed they weren’t the original authors of the software.

Suprisingly few months later SugarCRM announced that the Sugar Community Edition 5.0 was going to be licensed under the GPLv3. As a matter of fact SugarCRM appears to be the most visible among the open source CRM SaaS vendors, if not the only one. At the end of August on-demand installations accounted for 40% of SugarCRM’s customers: as a matter of fact sales SaaS-based were already important. Hence the questions posed by Simon and others:

Could distributing the software with licence exposed to the GPL loop hole place SugarCRM at risk? How could SugarCRM have possibly changed its mind by embracing GPL considering the importance formerly given to brand protection? Futhermore could competitors easily “steal” customers from SugarCRM using SugarCRM?

Let’s start seeing some SugarCRM’s unique selling points:

  • SugarCRM is well integrated with other productivity applications;
  • SugarExchange, the SugarCRM marketplace, offers hundreds of module extensions, themes and language packs provided by SugarCRM community members and partners;
  • SugarForge is a vibrant open source community, able to bring SugarExchange to guest 400 applications in less than 4 months. SugarForge can allegidely be considered one of the most important community after the Linux group. SugarCRM is amazing because it’s a community built around an enterprise software application rather than an infrastructural platform.

Yes, competitors could attract SugarCRM’s customers but in order to do that they would need to:

  • Spend a large amount of money in marketing;
  • Create or replace proprietary plug-ins and add-ons;
  • Close partnerships with those partners that are currently working with SugarCRM.

As seen with the competition between open source vs proprietary software, it takes time to overtake an existing proposal with a functionally equivalent one. Even using just the same product, as seen with Unbreakable Linux and Red Hat, it’s proven not to be such an easy task, despite Ellison pretends it is. Partnerships, marketing and the addition of proprietary plug-ins makes the overtake definitely complex.

Keeping all of this in mind I doubt SugarCRM would ever consider using an unknown licence as the AGPL. What matters to the customer is the free availability of the community edition enabling their hassle free try&buy evaluation processess. Going GPL SugarCRM makes customers’ lives much easier than it was with the MPL +attribution thing.

Unfortunately the AGPL is unlikely to get a broad acceptance even in the long run, just because so much free software is released under the GPL, no matter which version, it’s not going to magically turn into AGPL. ASP welcomed the GPLv3, there is no chance they will move to AGPL considering their attitude to creating differentiating software.

In conclusion, SugarCRM will likely stay with a well known licence making its customers’ and also partners’ life easier. Now that investors are convinced that SugarCRM doesn’t need to stress the brand through weird licences there are really no reasons to have second thoughts. The GPL loophole is here to stay but it’s definitely not SugarCRM’s problem.

Technorati Tags: SugarCRM, Commercial Open Source, CRM, AGPL, SaaS, GPL loophole, Open SOurce License, Customer Relationship Management