ArsDigita moving away from free software

– By Tina Gasperson –
In a radical change to its business model, ArsDigita plans to market “proprietary extensions” to its free ACS software
beginning this fall. ArsDigita originally built its reputation by providing enterprise-ready Open Source software used by companies like America Online to build Web applications, but founder Philip Greenspun was recently forced out of the company, and the new management seems to be moving away from Greenspun’s original Free Software-based vision.The company is putting together a hybrid model, a cross between the completely free,
as in beer, Open Source track they’ve been on since 1997, and the
closely-guarded secrecy of all-proprietary companies like Microsoft, Adobe,
and others.

The core software, ArsDigita Community System (ACS) will remain free and
open. ACS is a do-it-all product that enables companies to perform a number of tasks, from ecommerce, to payroll, to inter-company communications, and market analysis. Up to this point, the company’s revenue has come only from the fees charged for support on this system.

Now, because of widespread expectations of lowered income, the company is trying to add cash avenues to its bread-and-butter main street. “It’s about margins,” says Jim McManus, ArsDigita’s director of corporate marketing. “Services models traditionally have lower margins than pure license vendors. Our goal is to provide customers with the highest quality solutions, while maintaining an attractive margin for our employees and investors.”

So, beginning this fall, ArsDigita is adding proprietary extensions to its line of products. These pre-packaged extensions will be designed to help customers using ACS integrate the software with other widely used resource planning applications like SAP and PeopleSoft. Or, they will provide more data according to companies’ needs.

“It’s important to note that we will not be closing off any features that currently exist,” says McManus, “and in fact, with the release of ACS 5.0 this fall, there will be much more functionality in the GPL version than currently exists.”

McManus points out that ArsDigita has consulted with customers about the change, and that their findings have been positive. “[Our] customers have no problem with the concept, and in fact it eases some of the initial reluctance to talk with an Open Source vendor like ourselves, since they’ll know they’re getting enterprise quality code.”

Apparently, according to McManus, one of the objections that ArsDigita’s potential customers raise is their concern that “Open Source comes from a bunch of hackers,” and he says that the licensed extensions help to show buyers that “someone is responsible for the application — meaning they are getting an ArsDigita product.”

And, he says, ArsDigita asked the Open Source community for its blessing on the proprietary extensions. “The community seems to realize that in this tight market, we need to explore all methods of generating revenue. As long as we continue to provide our core platform and applications as GPL — and not take away any functionality — they seem to understand our reasoning.”

McManus says that ArsDigita hasn’t decided the exact licensing terms for the extensions, only that the customer will be licensed to use the code, but it will still belong solely to ArsDigita. “We are exploring other Open Source licenses for the extensions,” he says, “or we may release them under our own license.”

By definition, Open Source software must follow certain guidelines, for instance, it must be freely redistributable, must allow derivative works, and must allow either modification of the source code or patches.

According to McManus, the use of the extensions does not affect the GPLed status of software that the company makes freely available, nor are the extensions required to also be under the GPL, because they are not derivative works.