Even if you’ve never written a single line of code, you’ve likely come across the term “open source software” in the context of business and technology. That’s because open-source components and packages often make up a large portion of modern software applications. In fact, even custom proprietary codebases frequently include snippets or entire libraries originating from open source. For senior business leaders, the prevalence of open-source code is common knowledge, but understanding the importance of open source compliance is another story altogether.
Open source compliance refers to adhering to the rules and guidelines set out by the licenses associated with each open source component. It’s about using, modifying, and distributing open source code in accordance with its legal requirements. Failing to follow these guidelines can expose your organization to legal and financial risks, making open source compliance a critical consideration for businesses of all sizes.
Why You Can’t Ignore Open Source Compliance
1) Ignorance Is Not an Excuse
One of the biggest misconceptions is that you can’t be held liable for non-compliance if you were unaware of which open source packages your developers used. Unfortunately, legal obligations persist whether or not you’re fully informed. This is particularly challenging because developers sometimes copy a small snippet of open source code instead of importing an entire package – yet the same license terms still apply.
Pro Tip: Establish a Software Bill of Materials (SBOM) that’s regularly updated and scanned for open source components. According to the Open Source Security Foundation (OpenSSF), maintaining an SBOM is one of the most effective steps an organization can take to ensure software integrity.
2) Visibility and Traceability
Having a clear record of which open source components you’re using is crucial. This not only helps with license compliance but also ensures that you can keep track of security vulnerabilities that might surface in older versions of open source libraries.
Action Step: Schedule regular license reviews and dependency checks. A well-documented inventory of open source components saves time and reduces risk when dealing with legal or security audits.
3. Staying Current With Updates
Open source projects evolve rapidly. If you’re not keeping up with the latest version of a particular library, you risk running on outdated or insecure code. Updating to the latest release can patch vulnerabilities, improve performance, and keep your project aligned with the most recent license requirements.
Industry Insight: A 2023 GitHub report found that nearly 70% of known software vulnerabilities exist in outdated open source libraries.
Types of Open Source Licenses
Open source licenses generally fall into two main categories: copyleft and permissive. While there are more than 80 recognized open-source licenses, these categories help simplify the landscape.
1. Permissive Licences
Put simply, a permissive licence basically means you can use the software freely. This means you can take the code, modify it and re-use it for your own purposes without having to deal with many restrictions. These open source packages are most commonly used by development teams and organizations who are building their own proprietary projects and don’t want to have to release their own code back into the open source domain
We highlighted a couple of examples below:
- Apache Licence: A permissive license allowing users to modify and distribute software with proper attribution.
- MIT Licence: Another permissive license offering wide flexibility in how software is used and modified.
While these licences offer the flexibility and reduced need for compliance, it is still essential to keep track of any and all open source components with these licence types. This is because you may still need to reference the usage if asked, and also to ensure you stay up-to-date with the latest versions to maintain security and performance.
2. Copyleft Licences
Open source components and packages that sit under Copyleft licences are designed to maintain and support the open source community. While you can still take the package or component and customize or build on-top of it, with a Copyleft licence you are required to then ‘open-source’ your own code under the same licence. Essentially ensuring that modified versions of the software remain open source and freely available to everyone. How this could impact a business would be if they take an open source package under a Copyleft licence and then use it within proprietary software which the organization does not wish to make publicly available – then you could be subject to legal action. A common type of Copyleft Licence would be:
- GPL (General Public Licence): A copyleft license requiring that modified versions of the software be distributed under the same license terms.
These Licences are distinct from permissive licenses which allow for more flexibility in how the code can be used and distributed.
For further reading we’d recommend the Open Source Initiative (OSI) who provide detailed information about each open source license and its implications.
Risk of Non-Compliance
For organizations of any size, it is important to be aware of the risks involved around the usage of open source software. While it is common practice in software development to rely on code originating from open source, and largely unavoidable due to how developers work, it is down to you as an organization to be aware of the risks if you do not have the correct procedures and checks in place:
- Legal Repercussions: Violating an open source license can result in litigation or injunctions that halt your business operations.
- Financial Costs: Even if a lawsuit is avoided, retrofitting compliance can be expensive, especially if you need to remove or replace large portions of your code.
- Reputational Damage: Tech-savvy customers and partners are increasingly conscious of software supply chain integrity. A public compliance breach could harm your brand’s credibility.
While non of the above risks will cease your development or business operations completely, they will all impact your finances and resources negatively.
How to Maintain Open Source Compliance
The good news is that all of the above risks can be mitigated with minimal cost and infrastructure impacts. Once you have the below tools and processes in place managing your open source licences and packages will become a simple exercise that largely looks after itself. These recommendations will not only benefit your development team, by providing them the data and insights to manage their codebase effectively, but it will also provide your organization better visbility and data to ensure your own compliance and security posture is maintained.
- Implement a Software Bill of Materials (SBOM): Document every open source component or snippet used across all projects.
- Automate License Scanning: Use dedicated tools to scan your repositories, flagging any non-compliant libraries or snippets.
- Establish Clear Policies: Create internal guidelines for developers on when and how they can integrate open source code.
- Conduct Regular Audits: Schedule periodic reviews of your codebase, focusing on licensing, security, and version updates.
How Tools Like The Code Registry Can Help
While native platforms (like GitHub, GitLab, or Bitbucket) often include basic license detection features, these are usually limited to code housed within their own environments. For businesses seeking a holistic and proactive approach to open source compliance, third-party solutions like The Code Registry offer key advantages:
- Unified Visibility
- Cross-Platform Insights: Connect any codebase, regardless of where it’s hosted or which languages are used.
- Real-Time Dashboard: Monitor open source components, licenses, and version updates in a single interface.
- Automated Scans and Alerts
- License and Security Checks: Identify outdated dependencies, potential compliance violations, and known security vulnerabilities on an ongoing basis.
- Continuous Monitoring: Receive alerts when a license conflict arises or a component requires urgent updates.
- Comprehensive SBOM Management
- Traceability: Easily generate and maintain a Software Bill of Materials for all projects.
- Audit-Ready Documentation: Export compliance reports and evidence of license adherence for external audits or internal reviews.
- Executive-Level Reporting
- Non-Technical Summaries: Provide clear, actionable insights for CTOs, CIOs, and other senior leaders without deep coding expertise.
- Strategic Planning: Use data-driven metrics to inform decisions around budget allocation, vendor selection, or security initiatives.
Why Independence Matters: An independent solution like The Code Registry ensures you aren’t locked into a single hosting provider’s ecosystem. This allows for a truly comprehensive overview of your software environment, making open source compliance more manageable and transparent across diverse teams.
Open source software isn’t just a buzzword – it’s the backbone of many business-critical applications. While leveraging open source code offers significant benefits in terms of cost savings, flexibility, and innovation, it also comes with legal and operational responsibilities. Staying compliant is essential to protect your company from potential legal disputes, financial strain, and reputational harm.
By maintaining a clear SBOM, automating license and security scanning, and establishing well-defined policies, you can safely harness the power of open source. Tools like The Code Registry further simplify this process, providing a unified, real-time view of your codebase’s open source components and licenses. With the right strategy and platform, you can ensure that your organization remains both innovative and compliant—no matter how complex your software environment becomes.
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