Why Open Source License Management Matters

The ongoing rise in open source vulnerabilities and software supply chain attacks poses a growing threat to businesses, which heavily rely on applications for success. Between 70 and 90 percent of organizations’ code base is open source, while vulnerabilities such as Log4j have significantly exposed organizations to cyberattacks.

In response, governments have made moves to protect both the public and private sectors from these threats. For example, in September 2022, U.S. senators sought to introduce the Securing Open Source Software Act, which is intended to strengthen open source software security. If the legislation is passed, open source software will be recognized as a critical part of the country’s infrastructure and the U.S. Cybersecurity and Infrastructure Security Agency (CISA) will be tasked with assessing and mitigating the risk of all open source components that are used by federal agencies.

One important element of this is complying with the many licenses that govern every open source dependency in your code base. With more than 200 different open source licenses out there, each with its own terms and conditions, open source license management can be a tricky endeavor. However, failing to accurately track licenses is risky business, and can result in some unfortunate surprises. At best it could be just the headache of replacing a component; at worst, it could mean jeopardizing exclusive ownership over your proprietary code.

With that in mind, it’s important to understand what open source licenses are, and how best to manage them. 

The basics: What is an open source license?

Open source licenses are legal and binding contracts between the author and the user of a software component, declaring that the software can be used in commercial applications under specified conditions. The license is what turns code into an open source component. Without an open source license, the software component is unusable by others, even if it has been publicly posted on GitHub. Each open source license states what users are permitted to do with the software components, their obligations, and what they cannot do as per the terms and conditions. Licenses vary in complexity and requirements, and each organization is responsible for choosing which licenses are most compatible with its policies to ensure that it remains compliant.

What is license management software?

License management software is designed to identify, track and catalog all the components, dependencies, and relationships used when developing software and applications. This technology enables users to check how they use every component and dependency to ensure that usage complies with the license terms of each component.

It’s a big task because every piece of software comes with a license that stipulates what you can do with it, how you can use it, who can use it, and for how long. Adhering to the conditions of each piece of software, maintaining registration fees, and determining the relevance of each license, are critical to maintaining efficiency, protecting your software, and avoiding the legal costs that could arise from breaching license terms.

Advantages of license management software

• Transparency and visibility. Open source license management software makes it easy to see what software, components, and dependencies your company uses and how each of them is being used.
• Ensures compliance and avoids legal issues. This visibility ensures that organizations comply with the license agreements for every component and dependency. It means you avoid infringing any terms and conditions (T&Cs), which could result in costly fines and time-consuming revisions to your software. And it ensures that your usage remains in line with any revisions or updates to these T&Cs.
• Controls costs. You can see what licenses are being used and who is using them, so you can identify which licenses are worth retaining. There’s no point in spending money on licenses for software that is seldom or never used. And with software you do use, you may find that you can spend less for fewer users, if an audit from your license management software shows that this is appropriate.
• Reinforces security. You can easily see when software is used in an unauthorized manner, and it can help identify unusual and unexpected patterns of usage that may indicate a security threat.
• Speed and ease. The high volume of open source components and dependencies that organizations use makes manual management difficult, costly, and time-consuming. Using open source license management tools greatly reduces the time and cost.

Risks of not using license management tools

• Poor visibility. A lack of visibility over software impairs decision-makers’ view of which software is best to invest in, which to discontinue using, and which software should be prioritized for attention in order to avoid licensing and security issues.
• Compromised security. If you don’t know whether you’re complying with current licenses, you increase the possibility that you will use outdated or corrupted components, which can detrimentally affect the security of your software. This can compromise your product, your efficiency, your reputation, and ultimately your business.
• Infringement. Without a tool of this kind, you increase the risk of infringement. You’re more likely to neglect to update your license usage to comply with terms and conditions, which means you may find yourself facing legal action for unauthorized use of software.
• Costs. Without the right tools, you risk wasting money or incurring steep penalties. Back payment and legal penalties for each instance of a license infringement can be as much as $150,000. The penalties for selling illegal or incorrectly authorized software can reach $250,000 and may pose the threat of a custodial sentence. Even when using licensed software, improperly audited use may find you unnecessarily paying for unused or seldom used software.
• Reduced productivity. Without these tools, you increase the likelihood of replacing or rewriting code post-production. This slows production and hampers productivity.

Closing thoughts

Open source license management tools are a critical element for safeguarding your code, software, and applications, as well as reducing financial and legal risk for your organization. They reinforce the integrity of the components and dependencies you use, and ensure that your use of these components will neither compromise your organization nor the product that you create.