In a move that it calls a radical change to its business model, ArsDigita is
planning to market "proprietary extensions" to its free ACS software,
beginning this fall.ArsDigita, a company which has built its reputation on providing top quality
open source software for companies like America Online to build web
applications upon, is developing its own response to the economic downturn and
its resulting impact on Linux and other Open Source companies.
They're 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,
The core software, ArsDigita Community System (ACS) will remain free and
open. 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 their 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 GPL'ed 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.