Understanding network copyleft in SaaS
What developers must know about AGPL
What developers must know about AGPL
In today's cloud-driven world, open source software still powers many layers of digital infrastructure from the libraries behind AI systems to the frameworks that host modern web applications. While more and more companies shift to Software-as-a-Service (SaaS) delivery models, a new compliance challenge is emerging, because traditional open source licenses were not designed for a world where users access software over the internet rather than downloading it.
Of course, it can be rather easy to comply when these models are Apache-2.0 licensed, but the situation is different when, for example, GNU Affero General Public License is governing the model. Although most of the open-source licenses do not trigger obligations in SaaS environments due to the absence of software distribution, the AGPL stands out as a significant exception.
The GNU Affero General Public License version 3 (AGPL-3.0) is a strong copyleft license published by the Free Software Foundation back in 2007. It is derived from the GNU General Public License version 3 (GPLv3) and is specifically designed to address a gap left open by its predecessor.
The GPLv3, published by the Free Software Foundation also in 2007, was crafted to ensure that users had access to the source code of distributed software and the freedom to modify and share it. However, for cloud computing and Software-as-a-Service (SaaS) models, developers realized a limitation: GPLv3's copyleft obligations were triggered only when software was distributed, not when it was made available over a network.
In practice, this meant a user (a company) could take GPL-licensed software, modify it, and offer it as an online service, without ever sharing its modifications, since technically no "distribution" occurred. This became known as the "ASP loophole" (Application Service Provider loophole) or the "software-as-a-service" loophole. In essence, the SaaS loophole is closed by incorporating all the core principles and terms of GPLv3 but adding Section 13, the so-called "network interaction clause" extending source disclosure requirements to scenarios where the software is provided over a network.
This single clause makes the AGPL-3.0 one of the strongest copyleft licenses available. Under AGPL-3.0, users accessing a service are granted similar rights to those who receive a distributed binary under GPLv3, meaning they can request and obtain the source code for the version they're using.
Because its "network copyleft" provisions compel SaaS providers to release the source code of their entire application if AGPL-licensed software is used, when building proprietary projects, it is essential for SaaS companies to implement rigorous processes for identifying and managing open-source dependencies. Special attention should be paid to licenses like the AGPL and similar ones such as the Server Side Public License (SSPL-1.0), which carry substantial compliance risks in cloud-based deployments.
For developers and architects this is not just a legal nuance, it's a strategic decision point. The choice of an open-source component can directly influence product roadmaps, security posture, and even investor confidence. In fact, several firms include OSS license audits as part of due diligence for M&A transactions, highlighting how compliance has become a business-critical factor.
As AGPL-3.0 adoption quietly grows across ecosystems like PyPI and GitHub, understanding its implications for SaaS compliance has become critical for anyone building with open-source. This can be achieved by a multi-layered approach that balances legal compliance with business interests, allowing SaaS providers to leverage proprietary software and AGPL licensed software responsibly, all while protecting proprietary assets and reducing legal risks.
The rise of AGPL also intersects with DevOps and CI/CD practices. Automated license scanning integrated into pipelines is no longer optional, it's a necessity. Having the right tools or request it as a service, a scan of the project code can help teams detect problematic licenses before code reaches production. Similarly, generating and maintaining a Software Bill of Materials (SBOM) is becoming a compliance standard, especially with regulations like the U.S. Cybersecurity Executive Order pushing for transparency in software supply chains.
Implement clear governance frameworks for license compliance across all development teams and projects.
Use specific tools to track and list dependencies and monitor vulnerabilities in real-time.
Maintain an up-to-date Software Bill of Materials (SBOM) listing all open-source components, their versions, licenses, and vulnerabilities to maintain visibility and proactively manage risks.
Promote responsible OSS usage with regular training sessions to empower teams to make informed choices.
Finally, software development companies should anticipate that license trends will evolve alongside technology. With AI models increasingly incorporating open-source code and datasets, similar "network clauses" may emerge for machine learning artifacts. Staying ahead of these developments will require collaboration between legal, engineering, and security teams, making OSS governance a core competency for modern software organizations.
Understanding open source licensing is crucial for modern software development. Stay informed, stay compliant.