DevExpress Newsletter 12: Message from the CTO

07 October 2009

Reprinting my Message from the CTO from the twelfth newsletter so that you may comment on my thoughts. Am I prescient or just nuts?


Recently, I published a blog post about our licensing policies, and it turned out to be well received and widely read. But there was one question I did not cover: why licensing in the first place? In particular, why have this sentence in the EULA at all? "All SOFTWARE COMPONENT PRODUCT(S) is licensed, not sold." Why don't you own our software product after purchase?

The easy way out is to say we do it because everyone else does, but that doesn't get to the nub of the problem. In essence, it's a legal requirement. When you purchase a washing machine, say, the laws of your country or state determine what you can expect from your purchase: that is does what it's supposed to, that it has a warranty, that the warranty covers certain things for a certain time, etc. Indeed, the credit card you used to make the purchase also comes with laws and expectations governing its use.

The same goes for software; however, with software (mainly because of the ease of duplication and distribution and because of its flexibility) there must be a legal document to which you must agree that defines what you can do with it. This legal document is usually known as the EULA (End-User License Agreement) and covers your usage of the software, where and how often you can install it, whether you can distribute it or not, any warranty you may get (almost certainly none at all), the support policies, the responsibilities of the supplier and the user, definitions of intellectual property (IP) rights and copyright, and so on, so forth.

Because of the IP/copyright angle, even free open source software has a license to which you must agree (for example, I use the MIT license for my own code I make available for free). Caveat downloader.

In essence, without a license, software would be so expensive no one would be able to afford it.

We all work in the software industry, and so I doubt we even think any more about the fact we never own the software we buy, so I was surprised when I actually got this question by email one day (and this message text is roughly the answer I gave).

(Aside: I must thank Odi Kosmatos of Xceed Software for the "so expensive" quote he sent as a tweet. Thanks, Odi.)

20 comment(s)

This must be one of the stupidest comments i ever read, can you please explain,"In essence, without a license, software would be so expensive no one would be able to afford it.".

7 October, 2009
David Thornley

Book publishers don't require licenses:  they sell one copy, and it may be used according to copyright.  I buy books, and don't license them.

In fact, copyright law answers the questions you need answered.  In the absence of a license, I can use software I buy on one computer.  I can distribute it by transferring the original copy and either transferring or destroying all copies I have.  I believe that all countries where they care about copyrights or licenses have similar laws.  Certainly software can be sold under these legal restrictions only.  The only reason to insist on a license is to curtail the normal rights of the purchaser.

Warranties and support policies are separate.  There are no responsibilities between supplier and user unless agreed to, but this doesn't need a license agreement.

Free and open source software comes with licenses to permit the user to do things normally forbidden by copyright law.  The definitions of the Free Software Foundation and Open Source Initiative require the ability to copy and redistribute freely, which is forbidden by copyright law.  You do not need to agree to the BSD license or GPL to use software, only to do things you don't already have the right to.

The only reason somebody would not expect to be buying software is if they're steeped in this peculiar practice.  Anybody used to buying machines, or books, or reports, or music, or pretty much anything else would find the lack of sale surprising.  I don't think software is so special that it must be treated differently from every other good.

7 October, 2009
Rik Hemsley

qmail has been going strong since 1995 without a licence.

7 October, 2009
Denny Figuerres

I think a good way of putting it might be like this:

what if you paid for one washing machine and then were able to make more of them for a penny each?

if you could do that and sell them then the factory and the company that made the first one would be out of business.

there are other issues in the software Vs. "real goods" but that is one of them....

another is the bug-fix and maint of software.....

software tends to be more complex and more in need of changes then most "real goods" so it benefits the user to have a deal where they get updates to the product from time to time over the life of the product.

what I think is the often mis-used and should be better managed are software patents.

i heard the other day that the eolas guys are now targeting 23 companies ....  scarry....  if they keep making money that way then what do we have in the future ?  

software patents so far seem to have done a lot of harm due to poor standards of issueance(sp?)  that's GOT to change right now!

or stop granting them...

7 October, 2009
Julian Bucknall (DevExpress)

Rik: Sorry, qmail does have a license. Athough I'll agree the license is extremely broad as to what you may or may not do with it, there is one nonetheless. (In essence, it's OSI-certified and for that to happen it has to comply with their license.)

Cheers, Julian

7 October, 2009
Julian Bucknall (DevExpress)

Andre: So in essence, of all the stupid comments you ever read, in all the towns, in all the world, mine is the stupidest? Nice.

I'll reply like this: without a license, there is nothing to stop someone buying software and duping/distributing it ad nauseam. End of software company. Without a license, there would be some kind of implied warranty, and for any issue at all, a customer would be able to sue for warranty problems. Since no one makes bug-free software, least of all you and least of all us, that also means end of software company. So, said software company, if there were no EULA, would have to charge enough to be able to cope with these two scenarios.

Cheers, Julian

7 October, 2009
Vincent Cotton

Julian, I hear you loud and clear.  No matter what the others are saying, licenses are a requirement!

7 October, 2009
Marcelo L

Julian: You're absolutely a point. "if there were no EULA, would have to charge enough to be able to cope with these two scenarios." Yes, there would have to be an accounting in the price of the product to account for that. But, I don't buy that without a license, there would have to be an implied warranty ( the fact that some states don't let you NOT have a non-implied warranty, notwithstanding. I know, I used a double negative, tough. ). With a copyright to your product you express that you maintain control and sole discretion as to the duplication ( and presumed distribution of ) said duplicates/product. But that an entity, business, person, or otherwise, not be able to transfer that licence in consideration of monies just rubs me the wrong way.

You got paid when entity A acquired said "license", and to say that since I'm no longer going to derive benefit from said "license" that I cannot recoup any of my investment as an independent concern. How many ISV's do you think might fold ( or at a minimum cease to purchase software from such a vendor that clung to that notion ) as a consequence of that ?

I'm not a gambler, but on the off chance you're ever in Miami, I'll wager a cold brew of your choice, that I'm right that more developers ( both independent and otherwise ) will at minimum defer or at most completely cease to purchase software components in this fashion.

At that point, why not go ahead and just say to the FOSS movement, "You win.".  I understand that there are already licenses that are worded thusly out there. Maybe more of them NEED to be tested.

For me it boils down to something very simple, which many are desperately trying to make complicated.

Entity A paid for a set of 1's and 0's organized in such a fashion that when read from a CDROM drive ( which I already paid, and which includes licensed software to decode the organization of those 1's and 0's ) sound like the band Entity A went to a concert for last week ? It does. Great. Entity A paid for that instance of those 1's and 0's. PERIOD. That band got their cut from whomever recorded, pressed, and distributed that set of 1's and 0's. If they didn't, go fight it out with them, not me. This set of 1's and 0's belongs to Entity A. It could set fire to the medium containing those 1's and 0's, so long as it didn't violate any health or local fire codes.

Fast forward to software. The medium of where those 1's and 0's notwithstanding ( and that would be a neat trick to pull.....disk of vinyl lined with magnetized grooves but not cd, cd but not hard drive, hard drive but not flash USB ). If that set of 1's and 0's is no longer useful to Entity A, and it will be useful to someone else. Please, what food is it taking from the original source's mouth if Entity A turns around and gives it to Entity B, giving up ANY and ALL right's pertaining to it's possession, even for so paltry a sum as $0.01. Of course this is presuming Entity A originally paid for said 1's and 0's ( If they didn't, then I'd say it's a different kettle of fish. Go get yourself paid, by all means.). Sound like some double dipping to me. Kind of like GM wanting to get paid again for when you sold that used Camaro that you drove to get you back and forth to college and your first internship. Sorry, I don't buy it. That's where I philosophically have to draw the line. At least for me, ymmv.

I remember in the early days of PC's, purchasing games from Electronic Art's. They considered guessed it...Software Publishers. Guess what, when I grew tired of a game, Entity A went to Entity B ( the store where I originally purchased said game, and summarily sold it back to them for some monetary compensation.). Did I take money out of Trip Hawkins ( CEO of EA at that time ) mouth ? You'd have a hard time convincing me ( and dare I say, A LOT of people ) of some moral or ethical failing in that transaction.

All that being said, I find the DevExpress' product licensing schema rather open and flexible in comparison to not only some of the competition ( that will remain nameless ), but to a lot of other companies in general. Where my issue lies is in the lack of clarity of that one edge case I outlined ( EntityA to Entity B on a total transfer basis ).

But like I said, YMMV. And for that, make sure you get what fits your perceived need, now and in the future. Of course no one likes to see signs like "Will code for food", but then again, if someone got paid the first time around, it becomes harder a sell that they'd be justified to get to "double dip their chip". Sorry for the Seinfeld reference, it just seemed apropo.

7 October, 2009
Robert van W

I thought this was a useful explanation.   Software IS different from books or washing machines in several important ways, which is why you need a license rather than just relying on copyright and patent laws:

1. Books contain information.  When you copy a book (whether printed or electronic), that's all you get.  That information is covered by copyright laws.  Washing machines provide functionality, probably covered by patents.  Software has both, so in theory it should need both copyright protection and patents.   Patents mostly protect manufacturers from other manufacturers, not from users.  If I buy a Mercedes Benz car, and then painstakingly, part-by-part, make an exact copy of the car for my wife, would the car company be worried about that?  Probably not.  But Bill Gates doesn't want me to do that with his product.

2. Both the information and the functionality of software can be effortlessly copied.  Consider three things: An authoritative tax manual, an old-fashioned accounting calculator, and something like TurboTax.  If you were to set up an accounting firm, you would have to supply all your accountants with the book and a calculator, or with the software.  You could buy 1 book and photocopy it (breaking copyright laws).  You can't really "copy" the calculator.  The software, however, can be bought once and installed for everyone, or installed in such a way that everyone has access to it.  That might not even violate copyright laws.

3.Software has parts that can be put to different use by clever developers.  If you can figure out that the nifty "date-picker" component that is part of a software package is in a certain DLL, you could include that DLL (and the date-picker) in your own software, and who would know?  And who's to say that's not OK?

4. Finally, there is the real-world behavior of the users.  The most important reason to have a license is to REMIND people that YES, you DO have to buy a separate copy of Microsoft Office for EVERY computer that you want to use it on.  Because if you don't remind them, they won't remember that.  And even if you do remind them, they'll still do it (use one copy for multiple computers) but at least they'll be a little nervous about it.

If you want to be paid for more than one copy of your software, you have to have a EULA.  or else charge a billion dollars and only sell one copy.

7 October, 2009
Julian Bucknall (DevExpress)

David. You know, I'm not a lawyer and so I can't possibly refute any of your statements. I'm also assuming that you are not either (not many lawyers read my articles for fun, the ultimate example being my wife). But I'm going to guess that copyright law is not enough to replace licensing, otherwise it would have sufficed.

Cheers, Julian

7 October, 2009
Marcelo L

Oh, and for the record. Nothing of what Julian said was stupid.

People can disagree to differing degrees with one another, but every point of view is valid, from the person's perspective.

Something may not make sense to you, but that doesn't mean it's stupid.

7 October, 2009
David Thornley


There is something to stop people from copying software ad nauseum:  copyright law.  If people are going to ignore that, they're also going to ignore a license.

There's also jurisdictions where you cannot disclaim all warranties, where the traditional "merchantability and fitness" always applies, and I haven't noticed them being devoid of commercial software.

7 October, 2009
Julian Bucknall (DevExpress)

All. Please note that with this article I am NOT saying that licensing is good or bad, that all software should be open-source or proprietary, that anyone who enforces a EULA is a fascist pig or a capitalist hero. Sure they're fascinating subjects in their own right, but if you want to talk about them, have at it on your own blog.

I am deliberately not taking any sides here, but just saying that this is what we do because the software world is like that, and these might be some reasons for it.

Cheers, Julian

7 October, 2009
Julian Bucknall (DevExpress)

All. Richard Morris pointed me to this article: "US court says software is owned, not licensed" ( Yay for more muddiness!

Cheers, Julian

7 October, 2009
Marcelo L

Julian : I don't think it's more muddiness. He basically fell back to the earlier ruling on the basis of a published work ( a Vanessa Redgrave movie ).

Robert W: NO ONE is ( at least no one on this thread I've read ) being a proponent of an act of willful replication of software with the purposes of distribution without compensation for said distributed licenses. But what ? We're going to Lojack CD's because you don't want folks to down the songs to your iPod ? Ok.....hand over your iPod...c'mon...I know you have one.

The issue you do make, however, that is valid is that Software should be protected under something stronger than copyright, but perhaps not quite as strong as license. Something that declares, "Yes, you own this, you can sell if it want, and give away your rights of ownership to another entity. But no, you may not replicate it for your cousin Willy without purchasing a license for him.".

7 October, 2009
Julian Bucknall (DevExpress)
7 October, 2009


"All SOFTWARE COMPONENT PRODUCT(S) is licensed, not sold."

Your explanation of this clause is hooey.  All of the discussion of whether an EULA is necessary, right, wrong, etc. is a side discussion.  

Selling a copy of your software to a customer does not give them ownership of the Copyright to the work.  That would require a contract explicitly transferring ownership of Copyright.  

If I purchase a copy of your software I have the right to use it in certain ways but I cannot make and distribute copies of it (hence the term Copy Right).  Your EULA actually grants me additional Rights that I would not normally have, like the right to distribute copies of software that contains derivative works (compiled code) made from your software.

What the above statement does do is prevent me from selling the sole copy of your software that I legally possess to a third party.  This is the first sale doctrine that applies to CDs, etc. and allows me to sell a CD to someone when I am tired of it EVEN THOUGH I DON"T OWN THE Copyright TO THE WORK.  

By stating that I am not buying a copy of your software, only licensing its use, you are asserting that I am not allowed to sell my copy to someone else when I am done with it.  Of course all software vendors want to license, not sell, copies of their software.  It means that you will sell more copies, because there is no legal re-sale market.  

As a former customer, I also think it's despicable.  The assertion that you are selling a license, not a good, because otherwise people can sell as many copies as they want is patently false.  The only reason to sell a license is to increase your sales and reduce the rights of your customers.

8 October, 2009
Julian Bucknall (DevExpress)

Jonathan: I'm afraid you let your prejudices get away with you. The relevant sentence in the EULA is this: "You may NOT permanently or temporarily transfer ANY of your rights under this EULA to any individual or entity without prior written approval from DEVEXPRESS." As far as I'm aware we've never refused.In essence, a change to a contract you've already agreed to requires a written approval. Not so bad.

Of course, if you do transfer, you must uninstall the product and any applications you've created using the license should be deleted.

Cheers, Julian

8 October, 2009
Joe Hendricks

I remember when Borland/Inprise went from their popular "no-nonsense" license to a complicated legalese-speak version.  

DexExpress has that "no-nonsense" EULA:

"SOFTWARE COMPONENT PRODUCT(S) - Developer End User may install and use the SOFTWARE COMPONENT PRODUCT(S) on a single computer. Developer End User may also install and use the SOFTWARE COMPONENT PRODUCT(S) on a portable computer."

Love it.  

- Joe

8 October, 2009
Morten Mertner

Jonathan seems to hit the nail on the head. Julian tries to argue that software must be licensed in order for a company to be able to make revenue, which is misleading at best.

Licensing probably frees software vendors from making specific guarantees as to what their product can and cannot do in addition to providing additional options when defining what licensees can do with the software. For instance, it would be difficult to charge for service packs for software that is sold as these essentially are an admission of faults in the product. Companies might face a legal requirement to separate bugfix updates from feature updates, which would be impractical and costly given how most development shops work. FWIW, IANAL.

9 October, 2009

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