A few weeks ago Slashdot was abuzz with the question Does GPL v3 Alienate Developers? The question was partly driven by William Hurley’s post that questioned the value of GPL v3 in an age where developers seek permissive licenses.
I haven’t thought a great deal about whether developers seek permissive licenses. Although, I’m sure the devil is in the details. Developers that just want to get stuff done may want the freedom to utilize code without GPL-viral worry, while developers seeking to build “the next JBoss” may seek GPL-protections.
In any case, I was thinking about “The next Red Hat or Sell to Oracle” strategy that a VC and I had discussed some time ago. I was also reading up on interesting vendors in the middleware market. Then it hit me, will the GPL help or hurt the chances, or size of, an acquisition by a traditional IT vendor?
I can make a case for both sides, and like everything, the answer will likely be “it depends”.
We’ve already seen that the biggest IT vendors can run afoul with their use of GPL’d code. When you consider the generally risk averse nature of larger IT vendors (i.e. larger targets), one could consider GPL’d code as being “more risky” during the acquisition process.
Let’s not forget that the majority of software vendor acquisitions are integrated into the product line of the acquiring vendor. Not only is the product simply added to the product line, often, technology is shared between the acquired product and the products that the acquiring vendor already had. But, integrating GPL’d code (or for that matter, LGPL’d code) with proprietary IP may have a viral impact on the proprietary IP; emphasis on may – I’m not a lawyer and much of this stuff hasn’t been tested in court.
I’ve been told that VCs prefer the GPL over more permissive licenses because the GPL protects against forks, thereby protecting the VC’s investments. I haven’t heard of (m)any OSS vendors changing their license to satisfy a VC’s requirement. But maybe OSS vendors choose the GPL from the get-go with, amongst other things, future VC conversations in mind. Thoughts?
I guess some of the GPL-fear can be circumvented if the OSS vendor has 100% copyright ownership of the GPL’d code. This would require asking 3rd party contributors to assign joint copyrights to their IP. In this scenario, the acquiring IT vendor could license the OSS product under whatever license they’d like.
The fun times that lie ahead for lawyers during due diligence work with OSS vendor acquisition candidates.