Note (September 2026): This article has been corrected. Open-source software is defined by its license, not by who develops it, and IBM’s purchase of Red Hat, announced in October 2018, was completed in July 2019.
Open-source technology is changing business by giving companies software whose source code they can use, study, modify and share under an open license. That lowers costs, reduces vendor lock-in and lets firms build on shared projects such as Linux and Kubernetes, but it also makes license compliance, security patching and supplier support part of every IT decision.
Key Takeaways
- Open-source software is software whose source code is publicly available under a license that allows anyone to use, study, modify and distribute it.
- The term was formalized in 1998 with the founding of the Open Source Initiative (OSI), whose Open Source Definition sets ten criteria for an open-source license.
- A widely cited 2022 estimate puts the share of code in software on the market that is of open-source origin at between 80 and 96 percent, including inside proprietary products.
- Risks are real: the Log4Shell flaw (CVE-2021-44228) in the open-source Log4j library received the maximum CVSS score of 10, and vendors such as HashiCorp and Redis have changed licenses on popular projects.
- Businesses get the most value by tracking the components they use, checking licenses, patching quickly and paying for support where uptime matters.
There has been a distinct change in recent years in the way in which businesses are meeting their tech needs and many are seeing the benefits of open-source technology.
Open-source software has revolutionized how IT needs are met in industries large and small and whether you’re running a market stall or head of a retail giant there’s something for you in this new wave of technology sharing.
One of the single biggest changes to technology we’ve seen in recent years is the adoption of open-source software and it has completely changed the way in which companies operate.
In the past, the hard code behind a business would be kept under lock and key, but nowadays there is a greater impetus on sharing.
Business owners and developers know that with shared knowledge and a sort of hive mentality that a problem shared is a problem halved. Find out more about open-source success stories and get some more information if you’re thinking about using open-source to further your business goals.
1] What is open-source software?
Open-source software is software whose source code is publicly available under a license that lets anyone use, study, change and distribute it for their own purposes; it can be written by individual volunteers, foundations or companies. Open-source software operates on the basis that software developers contribute to projects in order to solve their problems and the answers to these problems are shared widely and free to use.
In effect, developers have a vested interest in contributing to open-source projects in order to collectively have access to a more powerful product. The big thing here that matters when considering how things will change for the future is that a growing number of companies will look to open-source to fulfil the requirements of their businesses.
2] Who actually contributes to open-source software?
Developers can independently contribute to open-source software projects, but large businesses are huge players in this field. IBM has historically played a big role in the world of open source. On October 28, 2018, it announced its intent to acquire Red Hat, one of the world’s largest providers of open-source software, for $34 billion; the deal closed on July 9, 2019, and Red Hat now operates as an independent IBM subsidiary.
Through Red Hat, which is described on Wikipedia as the second-largest contributor to the Kubernetes codebase after Google, IBM is a major contributor to Kubernetes networking open-source projects. Contributions from large companies like this help to sustain the open-source movement and will continue to allow developers to push the boundaries of technology in the coming years.
3] Businesses will have more control over the future of products
When you’re locked into a proprietary piece of software, the future of the product you’re paying for is almost entirely out of your hands. The developers and owners of the software are the ones who will dictate future iterations of the product.
Effectively you’re out of the loop, but with open-source, it’s a different story. Business owners who adopt an open-source software package, whether they use it free of charge or pay for a support subscription from a vendor such as Red Hat, are voting with their numbers, and in a sense this democratizes the world of software.
With the freedom to contribute to future versions, and the legal right to fork a project if its direction changes, business owners have a real part to play in shaping the way in which software develops, progresses and exists in the future.
How Is Open-Source Software Licensed?
Open-source software is licensed, not simply given away. The Open Source Definition, published by the Open Source Initiative in 1998 and derived from the Debian Free Software Guidelines written by Bruce Perens, lists ten criteria a license must meet, including free redistribution, access to the source code, permission to create derived works and no discrimination against fields of endeavor such as commercial use. The OSI board reviews licenses and keeps a list of approved ones.
Open-source licenses fall into two broad families:
- Permissive licenses (MIT, BSD, Apache 2.0) let companies reuse the code in their own products, including closed-source ones, with few conditions beyond keeping notices.
- Copyleft licenses (the GNU General Public License family) require that redistributed derivative works are released under the same free license.
| License family | Examples | What it means for a business |
|---|---|---|
| Permissive | MIT, BSD 2-Clause and 3-Clause, Apache License 2.0 | Code can be built into proprietary products; keep copyright and license notices |
| Copyleft | GNU GPL, GNU LGPL | If you distribute modified software, you must share the source under the same terms |
| Weak or file-level copyleft | Mozilla Public License, Eclipse Public License | Changes to the licensed files must stay open; other code can remain proprietary |
| Source-available (not open source under the OSI definition) | Business Source License (BUSL), SSPL | Code is visible but some commercial uses are restricted; check the terms before relying on it |
How Widely Do Businesses Use Open Source?
Open-source software is now a core part of business IT rather than a niche choice. A widely cited 2022 estimate found that between 80 and 96 percent of the code in software on the market, including proprietary software, is of open-source origin. Well-known examples include the Linux kernel, the Firefox web browser and MediaWiki, the software that runs Wikipedia.
Open-source projects also underpin cloud computing. Kubernetes, the container orchestration system that Google announced on June 6, 2014, reached version 1.0 on July 21, 2015, and its trademark is now held by the Cloud Native Computing Foundation, which Google formed with the Linux Foundation. Teams moving to a microservice-based software architecture often run those services on Kubernetes, and choosing the right Kubernetes multi-tenancy approach is a common next step. Many organizations now set up Open Source Program Offices (OSPOs) to manage how they use and contribute to open-source projects.
What Are the Benefits and Risks of Open Source for Business?
Open-source software offers lower and shared costs, customization, auditable code, interoperability through open standards and independence from vendor lock-in. The same openness creates responsibilities that a proprietary vendor would otherwise carry for the buyer.
| Benefits | Risks and costs |
|---|---|
| No license fee for most projects | Staff time, hosting and paid support still cost money |
| Source code can be inspected and audited | Vulnerabilities in popular libraries affect many products at once |
| Freedom to modify and fork the code | Modified forks must be maintained by you |
| Less dependence on a single vendor | Projects can lose maintainers or change license |
| Large communities and shared standards | License obligations (especially copyleft) must be tracked |
The Log4Shell vulnerability shows the security side. Log4Shell (CVE-2021-44228) was a flaw in Log4j, a popular open-source Java logging library maintained by the Apache Software Foundation. It had existed unnoticed since 2013, was disclosed privately on November 24, 2021, received the maximum CVSS severity score of 10, and affected commercial services including Amazon Web Services, Cloudflare, iCloud and Steam. The lesson for businesses is to know which components they run so they can patch quickly; our guide to the risk of data breaches in the cloud covers related safeguards.
Can an Open-Source Project Change Its License?
Yes. The holder of a project’s copyright can release new versions under different terms, although code already released under an open license stays available under that license. Two recent cases show what happens next:
- Terraform and OpenTofu: in August 2023, HashiCorp relicensed its Terraform infrastructure-as-code tool from the Mozilla Public License to the Business Source License. A fork called OpenTF continued under the MPL, was renamed OpenTofu in September 2023 over trademark concerns, and is managed by the Linux Foundation.
- Redis and Valkey: in 2024, Redis Ltd. moved Redis from the BSD license to dual SSPL and proprietary licensing. The community forked Redis 7.2.4 as Valkey under the Linux Foundation, keeping the BSD license, with contributors from companies including Amazon, Google, Alibaba Group, Ericsson, Huawei and Tencent.
For a business, the practical point is that the right to fork is a real safeguard, but switching to a fork still takes testing and migration work.
How Do New Rules Affect Open Source in Business?
Regulation is starting to address open source directly. The European Union’s Cyber Resilience Act entered into force on November 12, 2024, and its main obligations for manufacturers of products with digital elements apply from December 11, 2027. The final text excludes open-source projects, communities, foundations and package distribution platforms from its main obligations, states that fines do not apply to non-commercial open-source developers, and creates a new role called the open-source steward for foundations and similar bodies. As of September 2026, companies that sell products in the EU remain responsible for the security of the open-source components built into those products.
How Can a Business Adopt Open-Source Software Safely?
- Inventory what you use. Keep a list of the open-source components in your software, often called a software bill of materials (SBOM), so you can respond quickly to vulnerabilities like Log4Shell.
- Check every license. Confirm whether a component is permissive, copyleft or source-available before building it into a product you distribute.
- Judge project health. Look at release frequency, the number of active maintainers and whether a foundation or several companies back the project.
- Plan for support. For critical systems, budget for a commercial support subscription or in-house expertise.
- Contribute back. Upstreaming fixes reduces the cost of maintaining private patches and gives your team a say in the project’s direction.
- Set a policy. Larger organizations can formalize these steps through an Open Source Program Office.
If you are weighing a build-versus-buy decision, our overview of what software development involves explains the processes behind custom software, and our article on the cloud control gap looks at balancing team freedom with company standards.
Frequently Asked Questions
What is open-source technology in business?
Open-source technology in business means using software whose source code is publicly available under a license that allows anyone to use, study, modify and share it. Companies use it for operating systems, web servers, cloud infrastructure and development tools, often alongside paid support.
Is open-source software free for commercial use?
Open-source software can be used commercially, because the Open Source Definition forbids discrimination against fields of endeavor such as business use. Copyleft licenses such as the GNU GPL add conditions when you distribute modified versions, so check each license before shipping a product.
Is open-source software secure?
Open-source software is not automatically more or less secure than proprietary software. Its code can be audited by anyone, but widely used libraries can carry serious flaws, as the Log4Shell vulnerability in Log4j showed in 2021. Tracking components and patching quickly are what keep it secure.
Who owns Red Hat?
Red Hat is owned by IBM. IBM announced the $34 billion acquisition on October 28, 2018, completed it on July 9, 2019, and runs Red Hat as an independent subsidiary.
What is the difference between open source and source-available?
Open-source software is released under a license that meets the Open Source Definition. Source-available software, such as code under the Business Source License or SSPL, lets you read the code but restricts some uses, so it does not meet that definition.
