What Is Open Source License?

Open source software is software whose source code is publicly available and freely modifiable. But 'free' and 'open' do not mean 'no restrictions' — open source licenses impose specific conditions on use, modification, and redistribution, and the conditions vary dramatically by license type. The most important distinction is between permissive licenses and copyleft licenses. Permissive licenses (MIT, Apache 2.0, BSD) allow the software to be used, modified, and distributed with minimal restrictions — you can incorporate MIT-licensed code into a proprietary commercial product. Copyleft (or 'viral') licenses (GPL, LGPL, AGPL) require that any derivative work or software that links to the library be released under the same license — which for many commercial software products means you cannot use GPL-licensed code without making your entire codebase open source.

For commercial software companies, the AGPL (Affero GPL) is particularly significant and often misunderstood. Standard GPL's copyleft provisions are triggered by distribution — but many SaaS companies don't distribute software, they provide it as a service, which some argued was a GPL loophole. The AGPL closed this loophole: using AGPL-licensed code to provide a network service requires releasing your source code under the AGPL. This is why many SaaS companies have strict policies against using AGPL dependencies.

Open source license compliance also requires maintaining attribution notices, not removing copyright headers, and in some cases contributing back modifications to the original project. Commercial licensing deals (dual-licensing) are a common business model: a company releases its software under GPL for open source use, and separately sells a commercial license to companies that need to use it in proprietary products without the copyleft obligations.