Elastic’s Return to Open Source

Elastic's decision to return to open source has sparked curiosity and prompted questions about the reasons for making such a bold move. The company's choice to adopt the AGPL license for Kibana and Elasticsearch represents a significant change in a technological landscape where licensing strategies have emerged as key competitive tools. This decision is not only practical-avoiding prolonged legal battles with Amazon Web Services (AWS)-but also a larger cultural and strategic shift for Elastic.

As we explore Elastic's return to open source, we'll look at the forces behind it, AWS market and legal tensions, and how it connects to the current open source trend.

The Path from Open to Closed and Back Again

The journey of a company that starts with an open-source license, transitions to a proprietary license, and then reverts to open source is a path many open-source projects have followed. Elastic initially gained popularity with Elasticsearch, a search engine, and Kibana, a visualization and dashboard tool, both released under the Apache 2.0 license. These tools became extremely popular, especially among cloud providers offering managed services built with Elasticsearch, such as AWS.

However, in 2021, Elastic switched to proprietary "source-available" licenses: the Elastic License and the Server Side Public License (SSPL). This change was primarily driven by dissatisfaction with AWS, which was offering a similar managed solution based on Elasticsearch while contributing little to the project. AWS also branded its product "Amazon Elasticsearch," causing market confusion. Elastic responded publicly, claiming AWS's use of its trademark infringed on the company's rights, leading to litigation.

Elastic's CEO and co-founder, Shay Banon, explained that the licensing change wasn't due to AWS using the code-it was, after all, permitted under the Apache 2.0 license-but because of the trademark violation. Elastic wanted to prevent AWS from using its brand, which was causing confusion among users. Although Elastic ultimately resolved the trademark issue with AWS, the company found itself trapped in a legal quagmire that took attention and resources away from its primary mission: developing great software.

Legal Battles and Market Confusion

The Elastic-AWS legal dispute extended beyond trademark issues, raising fundamental questions about how open source companies can defend themselves in a commercialized ecosystem. AWS, one of the largest cloud providers in the world, capitalized on the open source community's efforts by offering Elasticsearch as a service without contributing significantly to its development.

This led to market confusion and brand dilution for Elastic. Customers adopting AWS's version of Elasticsearch weren't always aware of the differences between it and the Elastic-maintained version. This confusion threatened Elastic's ability to compete effectively, leading the company to switch to a more restrictive license to protect its intellectual property while continuing to support the community's access to Elasticsearch.

The move to proprietary licensing forced AWS to fork Elasticsearch and create OpenSearch, which it transferred to the Linux Foundation. This fork allowed AWS to launch its own managed search engine without violating Elastic's trademarks. While this helped Elastic distinguish itself from AWS, the open source community was now split between two competing projects: Elasticsearch and OpenSearch.

Elastic's Return to Open Source

In 2024, Elastic shocked the tech world by announcing its return to open source, after almost four years of using a proprietary business model. Banon acknowledged that while proprietary licenses had served their purpose by forcing AWS to create a fork, moving away from open source had always been a point of tension internally.

One of the main reasons for the decision was Banon's passion for open source. "It's still magical to say 'open source,'" he said. Banon and Elastic's leadership chose to rejoin the open source community, recognizing that developers strongly connect with its philosophy. Although, using Elasticsearch remained free for users under Elastic's proprietary license, the "open source" moniker was missing, harming the company's standing in the community.

By adopting the AGPL license, Elastic reclaimed the term "open source" while implementing safeguards. The AGPL requires any derivative works to be published under the same license, preventing large corporations, including cloud providers, from utilising Elasticsearch without releasing their updates and changes to the public.

Is Open Source Licencing Entering a New Era?

Elastic's return to open source also reflects changes in the broader open source licensing environment. Companies like HashiCorp are experimenting with hybrid models, such as 'fair source,' while others have moved to proprietary licenses. The increasingly complex open source landscape has evolved alongside the growth of cloud computing, as businesses seek to protect their investments while maintaining the transparency that spurs innovation. Elastic's return to open source signals the company's commitment to community-driven development in the long run, regardless of the evolving licensing models.

Conclusion: The Magic of Open Source

Elastic's decision to return to open source is a testament to the lasting influence of the open source movement. Despite business pressures and potential legal challenges, the company has decided to stand by those principles that contributed to its success. By setting its license as AGPL, Elastic safeguards its brand while embracing the principles of openness that characterize open source models. This decision marks a new chapter for Elastic, one that will likely inspire other companies to reconsider their own licensing strategies in the years to come.

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