Long Live the SaaS Loophole

Continuing the thread with Simon Wardley, I want to lay out a couple thoughts that Simon’s reply has prompted me to finally put into writing. This is one of two.

In a comment reply, Simon Wardley points out that the aforementioned “SaaS Loophole” is actually a good thing. I agree. To put a finer point on it, one could make a great case that without SaaS Loophole, excellent web search results (Google) and thousands of other freely-available services on the web would have been much longer in coming around. Much of what we love about the Internet today was created by companies that used Free Software as a platform for innovation and a springboard to building a business.

After my talks at LugRadio Live USA and LinuxFest Northwest, a couple of people posted blogs expressing shock or dismay on learning that companies have been using this loophole. Robin Barre of CivicActions, for example, posted:

What saddens me about this talk is that it seems like companies are looking at GPL version 2 as having a loop hole. That as long as they are just “hosting” and not distributing code, then they may forego contributing their changes back to the community. These same companies rely on free and open software to provide their products and services.

I initially took Robin’s whole post to be a bit alarmist, but in follow-up dialog with her, it seems that she was specifically commenting in terms of Free Software principle: “I am frustrated that people feel the need to hide software from one another.”

When bootstrapping a business, it’s often necessary to keep your IP under wraps. Having another entity introduce your half-baked project before you have managed to complete the parts that really emphasize its value can tarnish or destroy the project’s reputation before it ever gets going.

Google still takes great care to protect their search algorithms. Are they wrong to do so? Does their massive amount of valuable contributions–yes, contributions to Free Software, but in orders of magnitude more significantly, their contributions to the usefulness of the Internet itself–in any way offset their protecting the secret sauce that enables their primary revenue stream? While I don’t buy into their corporate credo (”Do No Evil”) as a reason to trust them or like them, I’m personally okay with Google using the SaaS loophole to keep their search indexing algorithm IP a secret. I use many of their services and APIs, and I’d rather have those than have a bunch of upstarts replicating Google’s search capabilities. (Yes, this might hold back innovation in search indexing. On the other hand, it might be promoting it. In my mind, these two possibilities cancel out.)

Simon: I’d be curious to hear how Google could use trademarks and reputation in place of IP protectionism. In your view, is it possible?

Overall, much of this ties into my next related post, which asks, “Is AGPLv3 is Too Radioactive?”