When working with open source software, one of the key things it’s necessary to be aware of are the licensing restrictions. Open source does not mean “no strings attached.” In fact, there are some relatively rigid rules on how open source software can be used and customized, which often have impact on custom web development efforts.
I recently did some in-depth research to understand how the Magento e-commerce solution’s licensing works. Magento is licensed under the Open Software License (OSL) version 3.0, and this response was from Roy Rubin, head guy at Magento:
Here’s a breakdown:
- Extensions (typically found in the local/community folders): These works can be licensed under any license of your choosing. This means you can do as you wish with your works that are started from scratch.[CMC: this would mean no copying of files from the core to start, etc.]
- Core Code (including Varien JS files): These files are licensed under OSL 3.0. If you touch these files it is considered derivative works. If such derivative works are distributed (ie. your store is available online) – you will have to license your changes under OSL 3.0 and thus make them publicly available. This is where the commercial license comes in – if you are not prepared to distribute and share the source code of your application under the OSL license, we do offer a commercial license which waives this requirement.
- As of the next release (1.1.7+) [CMC: They're at 1.3.1 now, this post was October 08], we will relax Magento’s licensing to make clear that your own versions of Magento’s default design packages (templates, themes, layouts, skins), language packs, and configuration files, including XML files used to direct Magento’s functionality, although they are derivative works of Magento under copyright law, need not be disclosed to anyone. As such, those files will be licensed by Varien under AFL 3.0. We’ve started doing this as you can see here – http://www.magentocommerce.com/blog/comments/magento-connect-relaxed-licensing-to-selected-extensions/
Some more clarification from Magento’s attorney and author of OSL:
As the author of OSL 3.0 and also as Varien’s attorney, let me clarify the situation regarding Magento modifications.
Magento software is open source. It is designed to be modified and enhanced. The Magento e-commerce system is contained in three folders:
Core – the location of the Magento system as distributed by Varien under OSL 3.0.
Community – the location of community-provided extensions (under various licenses)
Local – the folder for your local extensions or overrides to your version of MagentoOnly if you make changes to the Core folder—and if you distribute those changes—must you license that code under OSL 3.0 and make its source available.
Under OSL 3.0, “distribution” includes “External Deployment”. If you distribute copies of your changed Core folder, or if you provide access to that software by placing your Magento store on the web for other people to buy things, that’s a distribution under OSL 3.0. So be careful to make your private changes to the Local or Community folders, not the Core folder, if you don’t want to disclose them.
Please note that distribution or external deployment doesn’t actually occur until you start offering that e-commerce site over the Internet. Test and deploy internally all you want, without disclosing anything.
The OSL 3.0 license supports Varien’s dual licensing open source business model. If you want to make private changes to your version of the Magento Core folder without disclosing the changes, Varien offers commercial licenses. Contact Varien for details.
/Larry Rosen
via Magento – commercial license? – Magento Licensing – eCommerce Software for Growth.
and Magento – License issue. Using Magento to create client sites.
My Summary
To stay within the open source license restrictions:
- Don’t edit core files. Important for upgrade compatibility, too.
- Editing provided themes is OK.
- Create your own modules from scratch if they need to be kept private. Or find an existing one in Magento Connect if it exists.
Alternatively, you can license the software, which is currently running around $10K per server with a discount for test and development instances.


