Twenty-five years ago, Microsoft CEO Steve Ballmer called Linux “a cancer.” Today, Microsoft is one of the largest contributors to open source on GitHub. The transformation is evidence of a broader shift: open source has won the infrastructure layer. The question now is whether the business models built on top of it can survive.
The data tells a remarkable story. According to the Linux Foundation’s 2024 survey, 96% of organisations use open source software in their technology stack. The average application now consists of 78% open source code. GitHub’s 2024 Octoverse report counted 420 million repositories and more than 100 million developers on the platform, with open source projects accounting for the vast majority of new repository creation.
The Business Model Problem
Open source may have won the code war, but the business model war is ongoing — and getting uglier. The core tension is between the open source ethos (free redistribution, community collaboration) and the commercial reality (someone has to pay for development and maintenance).
In 2018, MongoDB switched from the GNU AGPL to its own Server Side Public License (SSPL), explicitly designed to prevent cloud providers from offering MongoDB as a service without paying. Elastic followed in 2021, abandoning the Apache 2.0 license for Elasticsearch and Kibana in favour of SSPL and its own Elastic License. HashiCorp, which makes Terraform and Vault, switched from the Mozilla Public License to the Business Source License (BSL) in 2023, a move that sparked a community fork called OpenTofu. Redis Labs dropped the BSD license for its core database in 2024, moving to a dual-license model with its own Redis Source Available License.
These moves share a common thread: venture-backed open source companies, having built massive communities around freely available code, are struggling to convert those communities into revenue as public cloud providers like AWS package their products as managed services and keep the profit for themselves.
The Fork Is the Feature
The BSL and SSPL transitions have triggered a wave of community forks. OpenTofu, the Terraform fork, quickly attracted support from major companies including Gruntwork, Spacelift and env0. Valkey, a fork of Redis, was adopted by the Linux Foundation in March 2024 and is now backed by AWS, Google Cloud and Oracle — the very cloud providers that Redis Inc. was trying to extract revenue from.
This dynamic is unique to open source: if the community disagrees with your licensing decision, they can fork your code and compete with you. No proprietary software vendor faces this risk. It is both the greatest strength of open source and the thing that makes open source business models inherently fragile.
Where Open Source Still Dominates
Despite the business model challenges, open source remains the default choice for infrastructure software. Linux runs over 90% of public cloud workloads and 100% of the world’s top 500 supercomputers. Kubernetes is the undisputed container orchestration platform. React, Vue and Angular power the front end of most web applications. Python has become the lingua franca of data science and machine learning.
In AI, the picture is more mixed. Hugging Face hosts over 500,000 open source models, and Meta’s Llama models have been downloaded over 300 million times. But the most capable models — GPT-4, Claude, Gemini — remain proprietary. The debate over open-weight models (which release trained parameters but not the training data or methodology) versus truly open source models (which release everything) is still unresolved.
Red Hat remains the most successful pure-play open source company, generating over $4 billion in annual revenue before its $34 billion acquisition by IBM in 2019. Its model — enterprise support and services layered on top of freely available open source software — proved that open source can be commercially viable at scale.
The Next Chapter
The open source movement is entering a new phase. The “free as in beer” era is giving way to a more nuanced reality where companies carve out narrow commercial restrictions while keeping the code available for most users. Whether this represents a betrayal of open source principles or an evolution necessary for sustainability depends on who you ask. What is not in doubt is that open source code — if not every open source company — will be around for a long time.