Best Practices for Managing Open Source Software
Open source software (OSS) powers nearly every modern application. It accelerates innovation, lowers costs, and allows engineering teams to focus on differentiation instead of reinventing commodity components. But the same openness that fuels its power can also expose companies to legal, security, and operational risks if not governed properly.
When people say software is commoditized, they mean itâs become widely available, standardized, and no longer a differentiator.
The best software leaders treat OSS not as an afterthought but as a strategic capability that requires policy, tooling, and discipline.
Why Open Source Matters in Due Diligence
Open source can be a competitive advantage when used responsibly. The most effective teams actively manage licenses, automate vulnerability tracking, and understand where their code depends on the work of others. Without proper oversight, however, open source can introduce:
- Legal exposure through license noncompliance.
- Security vulnerabilities from outdated dependencies.
- Operational risk due to missing visibility or weak governance.
- Strong OSS management is a signal of engineering maturity.
1. License Compliance and Legal Risk
License Types: Understand which licenses (e.g., MIT, Apache 2.0, GPL, AGPL) are in use. Permissive licenses generally pose fewer restrictions, while âstrong copyleftâ licenses may require derivative works to be distributed under the same license.
| License Type | Summary | Requirements |
|---|---|---|
| MIT | A highly permissive license widely used in open source projects. | Allows reuse, modification, and distribution, even in proprietary products. Requires attribution of the original author and inclusion of the license text. |
| Apache 2.0 | Permissive license similar to MIT but with explicit patent protections. | Permits use, modification, and distribution, including in proprietary software. Requires attribution, inclusion of license text, and a NOTICE file if provided. Provides a patent license from contributors. |
| GPL | A âcopyleftâ license that requires derivative works to also be open source. | Software incorporating GPL code must also be distributed under GPL. Source code must be made available when distributed. Strong restrictions on combining with proprietary code. |
| AGPL | An even stricter copyleft license that extends obligations to software provided over a network. | Same as GPL, but also requires making source code available if the software is used to provide services over a network (not just when distributed). |
| BSD | Permissive license similar to MIT with minor variations. | Allows free use, modification, and distribution. Requires attribution; the 3-Clause version also prohibits endorsement using contributor names without permission. |
| LGPL | A âweak copyleftâ license often used for libraries. | Allows linking to proprietary software without imposing full GPL terms. Modifications to the LGPL-licensed component itself must be released under LGPL, but proprietary software that merely links to it can remain closed source. |
Usage Practices: Confirm you have processes to track OSS usage and ensure compliance. Lack of governance could create exposure to IP disputes.
Third-Party Disclosures: Some licenses require attribution or disclosure of modifications. Review whether the you fulfill these obligations.
2. Security and Vulnerability Management
Every engineering leader should require a Software Bill of Materials (SBOM). SBOMs are an inventory of all open source components, their versions, and licenses. It should be updated at least quarterly and integrate it into your CI/CD pipeline.
Most open source software SBOMs today are generated in one of two standardized formats, either SPDX (Linux Foundation) or CycloneDX (OWASP Foundation).
SLA-driven Remediation: Define clear timelines for patching vulnerabilities, e.g.:
- Critical (7 days): Vulnerabilities that can be directly exploited to gain full control, steal data, or disrupt core system.
- High (14 days): Vulnerabilities that expose sensitive data or allow significant compromise under certain conditions but may require authentication or user interaction.
- Medium (30 days): Issues that weaken security posture but are harder to exploit or have limited impact on confidentiality, integrity, or availability.
- Low (90 days): Cosmetic or informational issues with minimal security impact; useful for hygiene and best practices.
Tooling and Automation: Use automation in CI/CD pipelines to detect vulnerabilities in real time.
Some leading tools vendors include Snyk, Aqua Security, Checkmarx, and Sonatype / Nexus Lifecycle (Nexus IQ).
Documentation: Each vulnerability should have a documented status: fixed, in-progress, accepted risk (with justification), or deferred with compensating controls.
Dashboards & Reporting: Provide dashboards showing open vulnerabilities by severity, remediation status, and SLA compliance, with metrics reported to engineering leadership and the board.
3. Operational Practices and Governance
Policies: Establish a formal open source policy, including approval processes for new dependencies.
Open Source Software (OSS) Policy Example
Ownership: Best practice is for open source governance to be owned by a cross-functional team rather than sitting exclusively with engineering or legal. Open source affects code, compliance, and security. No single group has full visibility.
- Engineering understands how OSS is implemented but may overlook legal or license risks.
- Legal can interpret licenses but lacks technical context on dependency impact.
- Security and compliance track vulnerabilities but canât enforce fixes without engineering support.
A cross-functional Open Source Review Board (OSRB), with representatives from engineering, legal, security, and product, ensures decisions balance speed, safety, and compliance. It creates shared accountability, aligns teams around responsible OSS use, and embeds governance into everyday development instead of treating it as a reactive audit exercise.
For example:
- Establish a documented OSS policy.
- Create a cross-functional OSRB with representation from engineering, legal, and security/compliance.
- Require approval (or at least notification) for introducing new OSS dependencies.
- Automate governance through tooling (dependency scanners, license checkers, SBOM generators).
- Report on OSS usage and vulnerabilities regularly to executive leadership.
Contribution Practices: If employees can contribute code back to open source projects and ensure this is managed with clear guidelines.
4. Strategic Implications
Product Differentiation: If critical product features are largely built on open source without meaningful proprietary enhancements, your companyâs defensibility is limited and competitors may easily replicate functionality. Stronger companies use OSS as a foundation but layer unique algorithms, integrations, or user experience to create true differentiation.
Customer Obligations: Certain OSS licenses, particularly copyleft types like GPL or AGPL, may impose disclosure requirements that conflict with proprietary customer agreements. You should have a clear review process to ensure license terms align with contracts. Failure to manage this properly creates legal, contractual, and reputational risks.
Future Risk Exposure: OSS practices that are informal or manual may work for small teams but often fail to scale, leading to security, compliance, and technical debt risks. Mature organizations mitigate this by maintaining a formal OSS policy, automated SBOM generation, and integrated SCA tools within the development lifecycle. This maturity reduces post-close surprises and signals operational discipline.
Executive Takeaway
Open source is essential to modern software, but it requires leadership. Treat OSS governance as seriously as you treat security, compliance, and architecture.
By maintaining visibility, enforcing policies, and automating checks, software leaders can harness open source as a source of innovation, not risk.