The Functional Source License (FSL) is a mostly permissive non-compete license that converts to Apache 2.0 or MIT after two years. It is designed for SaaS companies that value both user freedom and developer sustainability. FSL provides everything a developer needs to use and learn from your software without harmful free-riding.


Here are products using FSL. Add yours on GitHub.

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Many SaaS companies wish to make the source code for their core products available under permissive terms without the risk of harmful free-riding. A standard license for this purpose makes life easier for both producers and consumers of such software.
What is harmful free-riding?
Harmful free-riding is the sort of free-riding that leads to the free-rider problem: “In the social sciences, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods and common pool resources do not pay for them or under-pay. Examples of such goods are public roads or public libraries or services or other goods of a communal nature. Free riders are a problem for common pool resources because they may overuse it by not paying for the good (either directly through fees or tolls or indirectly through taxes). Consequently, the common pool resource may be under-produced, overused, or degraded. Additionally, it has been shown that despite evidence that people tend to be cooperative by nature (a prosocial behaviour), the presence of free-riders causes cooperation to deteriorate, perpetuating the free-rider problem.”
Why not Open Source?
Open Source does not protect against harmful free-riding.
What about AGPLv3 though?
AGPLv3 is not permissive enough. As a highly viral copyleft license, it exposes users to serious risk of having to divulge their proprietary source code. FSL does not introduce this risk, so FSL software can be adopted at organizations where AGPL is outside of policy.
Why not open core?
Open core is not permissive enough. It restricts based on feature set, such that some product features are never open. Moreover, the percentage of features that are restricted is highly variable from product to product. With FSL, all product features are available now for almost all uses, and are soon fully permissive.
Why not [some other alternative]?
There have been many somewhat similar attempts over the decades to balance user freedom and developer sustainability. None has truly caught on in the industry, and their original sponsors have either stopped promoting or outright abandoned them.

FSL's immediate predecessor is the Business Source License (BSL or BUSL). BSL's time-based approach is great, but the Additional Use Grant is a serious flaw, because it creates too much variability. Each BSL implementation is essentially a new license. Also, four years is too long. FSL is an evolved BSL that (we hope) has a better chance of catching on.
What can I do with FSL software?
You can do anything with FSL software except undermine its producer. You can run it for almost all purposes, study it, modify it, and distribute your changes, including proposing improvements back to the producer. After two years it becomes permissive Open Source software under Apache 2.0 or MIT.
Why only Apache 2.0 and MIT?
Looking at popular licenses according to OSI and GitHub: copyleft is not our jam, and BSD/ISC don't offer anything over MIT. That leaves Apache 2.0 (with its patent grant) and MIT.
How exactly does the two years work?
The two year timeframe applies to each software version that is made available. Methods of making software available include pushing a Git commit, publishing a package to a repository, or mailing out a CD in a tin. For example, one could clone a repo, run git checkout `git rev-list -n 1 --before="2 years ago" master`, and—if LICENSE.md is FSL—use that version under MIT or Apache 2.0.
What's with the name?
Meh, it's functional. ¯\_(ツ)_/¯
What's the backstory?
Read the announcement.
How do I adopt FSL for my product?
Glad you asked! Check out our guide on GitHub.