There isn’t one single perfect term, but this practice is commonly discussed in a few specific ways depending on the details.
1. Incorporating open source components into proprietary (closed-source) software (or mixed-source / hybrid software)
This is the neutral, technical description. Companies take multiple permissively licensed open source projects (MIT, Apache 2.0, BSD, etc.), integrate them, add their own code/glue/UI, and sell the combined product as closed-source commercial software.
- This is extremely common and usually legal.
- Almost all modern commercial software does this to some degree (web frameworks, databases, encryption libraries, UI components, etc.).
- The key requirement is complying with the original licenses — usually just giving proper attribution/notice for the open source parts.
2. Openwashing (or “open-washing”)
This is the term used when companies market the practice misleadingly — presenting a closed or heavily restricted product as if it were “open source,” “built on open principles,” or part of the open source community to gain marketing/trust benefits without actually being open.
- Examples: Some AI companies calling models “open source” when the license has major restrictions, or vendors heavily emphasizing “open source foundations” while keeping the actual product closed.
- Red Hat famously accused VMware and Microsoft of openwashing years ago.
Related Business Models
| Model | What They Do | Core Stays Open? | Typical Perception | Example Companies |
|---|---|---|---|---|
| Open Core | Open source core + proprietary premium features | Yes | Generally accepted | GitLab, MongoDB (older), Elastic (older) |
| Dual Licensing | Same code offered under open source + commercial license | Yes | Accepted | MySQL (historically), Qt |
| Proprietary wrapping / bundling | Take OSS projects, integrate, close the whole thing | No | Mixed (legal but often criticized) | Many enterprise tools, appliances |
| Cloud / Managed Service | Host OSS as a paid service without contributing back | Usually yes | Heavily criticized | Triggered many license changes (SSPL, etc.) |
The “Stealing” Perception
The negative framing (“stealing the open source”) usually comes from one of these situations:
- License violation (actual infringement): They used copyleft software (GPL, AGPL, etc.) and closed the source without releasing their modifications. This is illegal and has led to lawsuits.
- Free-riding / exploitation (ethical complaint): Even when legally allowed (permissive licenses), the company takes massive value from the open source community/ecosystem but contributes little or nothing back (code, money, or developers). The OSS community often calls this free-riding, parasitism, or corporate exploitation of open source.
- This was a major reason projects like MongoDB, Elastic, Redis, and others changed their licenses in recent years — to stop cloud companies from taking their work and offering it as a paid service with minimal contribution.
Bottom Line
| If they… | It’s called… | Legal? | Community View |
|---|---|---|---|
| Use permissive OSS + close the product | Proprietary wrapping / mixed-source | Usually yes | Tolerated |
| Mislead people about it being “open” | Openwashing | Legal but shady | Strongly disliked |
| Violate copyleft licenses | License infringement | No | Illegal |
| Take a lot, give nothing back | Free-riding / exploitation | Often legal | Heavily criticized |