Open source software is “software that can be freely used, changed, and shared (in modified or unmodified form) by anyone.” The Open Source Initiative is a corporation founded in 1998 in California that reviews and approves licenses as conformant to the Open Source Definition(OSD). The OSD is a set of 10 criteria that software must meet to be classed as open source. These include free distribution which means the license should not “restrict any party from selling or giving away the software as a component of an aggregate software distribution containing programs from several different sources.” The full list can be found here http://opensource.org/docs/osd.
There are a number of licences that are widely used and each can have different rules regarding its use. These include the Apache 2.0 License and the GNU General Public Licence. The OSI has to approve a new licence via its review process which makes sure that it conforms to the OSD and proper categorisation into a category defined here http://opensource.org/proliferation-report such as “special purpose licenses”, for example licenses relating to government use. There are reasons for an open source project to be licensed under any particular licence, I will discuss the reasons for why some of these licenses are so popular.
The full definition can be found here http://www.apache.org/licenses/LICENSE-2.0 along with a list of projects that are licensed under it such as OpenOffice and Hadoop. It is a free software license by the Apache Software Foundation. This license allows anyone to distribute, or modify and redistribute software licensed under it without any royalties.
The licence also allows these modifications to be redistributed under a different licence. This is in contrast to copyleft licences such as the GNU GPL which does require the licence to apply to any modifications. However, the Apache License 2.0 is compatible with the GNU GPL version 3 but any combined software must be licensed under the GPL.
Android is another major software project that is mainly licensed under the Apache License. Google’s reasons for choosing this over some other license such as LGPL include that LGPL requires that the customer be able to modify and reverse engineer but usually the device makers do not want to comply with this. Also LGPL requires “shipping of source to the application; a written offer for source; or linking the LGPL-ed library dynamically and allowing users to manually upgrade or replace the library.” The nature of Android being that it is generally just a static system image, it would be hard to comply to this requirement. Other reasons can be found here http://source.android.com/source/licenses.html#why-apache-software-license.
This is the free software licence that is most widely used. As mentioned previously it is a copyleft licence, written by Richard Stallman of the Free Software Foundation. It means that users are free to either modify and redistribute the software or just redistribute it without changes, as long as it is still licensed under the GPL. There are a number of major software projects that are licensed under the GPL, these include WordPress and VirtualBox.
In the case of VirtualBox, it is developed by Oracle, one of the biggest technology companies in the world. You may be wondering how does it make money from this software if it is released for free. This is because it is actually dual-licensed, meaning that individuals are free to use it without paying for it as long as they respect the GPL license. However, if it is being used in a commercial setting, then it is encouraged to buy the commercial licence which offers “access to enterprise features and support for mission-critical use of VirtualBox.” This is a way for companies to make money from open source software in general. Allowing the source code to be free and openly modified and improved benefits everyone, while having commercial licences allows the company to offer extra features or support to customers, giving added benefits to those customers while also making money for the company.
Developers must be careful in which licence they choose to release their software under. In some cases they might not have a choice if they are extending a particular piece of software that is licensed under a copyleft licence for example GPL. They must take care to make sure they know if they want to monetize the product, and how they would achieve that if is released under an open source licence. As shown above, it has been done in the case of VirtualBox, but not all applications will have a widespread commercial use.
It might be a good idea to study projects that may be similar, and/or carried out by successful companies to try and give an idea of which licences would be best to use. Also, the rights of end users have to be taken into account, as the project may be something that you are willing to let others modify and sell, possibly in the case of game mods, on the other hand you may not want that to happen.