GLOSSARY . DEFINITION
What Is the Business Source License?
The Business Source License, often shortened to BSL, is a source available license that publishes the source and permits broad use, while restricting production use that competes with the licensor. Each release converts to a true open source license after a delay, commonly four years. For enterprises, the key point is plain: source available is not open source, and the version you run decides whether the Business Source License applies to you at all.
Definition
The Business Source License is a published license template that a vendor adapts per product and per release. It grants the right to copy, modify, and use the source for most purposes, including production. It then carves out a single restricted category, defined by an additional use grant the licensor writes, which typically prohibits using the software to offer a product or service that competes with the licensor's commercial offering. On a stated change date, commonly four years after a release, that release automatically converts to a named open source license, often Apache 2.0 or the Mozilla Public License. Until then it is source available, not open source, and it is not approved by the Open Source Initiative.
Why it matters to enterprises
The Business Source License matters because it can apply to software you adopted under an open license and continued to run without noticing the change. As of August 2023, HashiCorp moved Terraform, Vault, Consul, Nomad, and Packer to the Business Source License 1.1. The community fork that preserved an open licensed path for Terraform is OpenTofu. For most enterprises the competitive use restriction does not bite, because running infrastructure for your own business is not competing with the licensor. The risk lies in assuming the change is irrelevant without checking, and in a vendor pricing a broad commercial license against use that the restriction never covered.
What to check in your own estate
Two facts settle most Business Source License questions. The first is the version: releases published before the change remain under the prior open license, so a copy of Terraform from before August 2023 is not under the Business Source License at all. The second is the nature of your use: ordinary internal and customer facing use is generally permitted, while offering a competing product is the restricted case. A dependency map that records the version and license of every affected component, dated because this area moves quickly, turns those questions into clear answers. The full mechanics are set out in the Business Source License explained, and the HashiCorp specifics sit on the HashiCorp and Terraform BSL pillar. More terms are defined in the open source license risk glossary.
This definition is commercial and licensing risk context, not legal advice. For interpretation of the Business Source License against your specific use, engage your own counsel.
COMMON QUESTIONS
Questions buyers ask.
What is the Business Source License?
The Business Source License, or BSL, is a source available license that lets you read, modify, and use the source broadly while restricting one thing: production use that competes with the licensor's commercial offering. Each release converts to a true open source license after a set delay, commonly four years. Source available is not open source, and the Business Source License is not approved by the Open Source Initiative.
Is the Business Source License open source?
No. The Business Source License is a source available license. The source is published and broadly usable, but the competitive use restriction means it is not approved by the Open Source Initiative. Source available is not the same as open source, and treating the two as equivalent is a common and costly mistake for buyers.
What does the Business Source License restrict?
It restricts production use that competes with the licensor. Internal use and most ordinary production use are permitted. The restriction targets building a product or service that competes with the commercial offering of the company that publishes the software. The exact boundary depends on the additional use grant the licensor sets.
Which products use the Business Source License?
As of August 2023, HashiCorp moved Terraform, Vault, Consul, Nomad, and Packer to the Business Source License 1.1. Other vendors use it for individual products. Because terms can be set per release and per product, the version you run determines whether the Business Source License applies to you at all.
CONTAINMENT
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