What the Elasticsearch License Changes Teach About Open‑Source Business Models

Background and Early Licensing

Elasticsearch began in 2004 as a simple search tool written by Shay Banon for his wife’s recipes. The initial release used the permissive Apache License 2.0, allowing unrestricted use, modification, and distribution.

After raising venture capital and forming a company, the business model shifted to a hosted search service: customers could pay for a managed offering instead of deploying the software themselves, providing revenue for the company.

Because open‑source software is not exclusive, any party can offer a compatible service. Amazon Web Services (AWS) obtained the Elasticsearch code at no cost, built its own search service, and quickly captured market share, threatening the original vendor’s revenue.

License Change in 2021

Facing competitive pressure from AWS, Elasticsearch announced in 2021 a dual‑licensing model combining Elastic License v2 (ELv2) with the Server Side Public License (SSPL). This change aimed to protect the business by restricting SaaS providers from offering the software as a hosted service without complying with the new terms.

AWS responded by forking the codebase and launching OpenSearch under the Apache License 2.0, creating a direct competitor.

The license shift gave Elasticsearch a more stable revenue stream: customers needing the “authentic” managed service had to purchase it.

CEO Narrative ("Elasticsearch is Open Source, Again")

Three years earlier the license was changed because AWS caused market confusion; the new license was necessary to protect the business, which led to the Elasticsearch fork.

Three years later AWS has fully invested in its fork, the market confusion has largely been resolved, and cooperation between the two parties has strengthened.

The current licensing combines ELv2, SSPL, and AGPL, forming a triple‑license model.

AGPL was chosen over other licenses to encourage the Open Source Initiative to add more licenses and because AGPL meets the needs of infrastructure software like Elasticsearch (similar to Grafana’s move from Apache 2.0 to AGPL).

License Comparison

AGPL 3 : A stricter GPL variant for network‑deployed software; SaaS providers must publish source of any modifications.

Apache License 2.0 : Permissive license granting broad rights to use, modify, and distribute without requiring source disclosure; includes a patent grant.

ELv2 : Allows free use and modification but imposes three restrictions: (1) cannot offer the product as a hosted service to others; (2) cannot bypass or remove license‑key features; (3) cannot delete or hide any license, copyright, or notice.

SSPL : Requires any SaaS provider using the software to open‑source the entire service stack under SSPL.

Choosing a License for Open‑Source Projects

The appropriate license depends on the type of foundational software:

Service‑oriented infrastructure (e.g., Elasticsearch) – start with AGPL v3.

Operating systems or development frameworks – consider GPL v3.

General‑purpose components or tools – Apache License 2.0 is suitable.

References

科技爱好者周刊（第 264 期）：Elasticsearch 的启示 – https://www.ruanyifeng.com/blog/2023/07/weekly-issue-264.html

Elasticsearch is Open Source, Again – https://www.elastic.co/blog/elasticsearch-is-open-source-again

OpenSearch – https://aws.amazon.com/cn/opensearch-service/