One of the consequences of the division between the free and open source communities is that two organizations exist to approve such things as licenses: The Open Source Initiative (OSI), and the FSF. If you read the OSI's Open Source Definition and the FSF's Free Software Definition, youll find that they are simply rewordings of the same ideas. Look at the list of licenses approved by both organizations, and you will find that the major licenses are also identical. Where they are not, the main reason is usually that the writer of the license has not yet submitted it to one authority for approval.
In this context, calling a piece of software "open source" or "free" refers to nothing more than whether its license has been approved by the authority in question. In addition, the same license could often be called both, depending on whose approval you want to emphasize.
From another perspective, your choice of term may reflect nothing more than your audience. Looking back at the coining of open source ten years later, Perens writes, "My intent has always been for Open Source to simply be another way of talking about Free Software, tailored to the ears of business people, and that it would eventually lead them to a greater appreciation of Richard Stallman's arguments."
In other words, the change was simply a branding decision -- or, as Raymond referred to it, a "time to reposition." Stop referring to free software and start talking about open source, and business executives might be more interested in the phenomenon described by both.
As Raymond put it, "There's now a chance we can make serious gains in the mainstream business world without compromising our ideals and commitment to technical excellence -- so it's time to reposition. We need a new and better label." Considering that "open source" is almost always used today in business, the validity of this logic is hard to dispute.
All the same, free software supporters might argue that the change of terms indicates a policy of appeasement. "If we think of open source as a move to make [free software] more user friendly," Stallman wrote to me last year, "Then obviously it's always going to be about putting power in the hands of corporations to do what they want."
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Although both Perens and Raymond argue that the change can be done without a loss of ideals, for free software supporters that is exactly what has occurred. Raymond, for example would go on to argue in The Cathedral and the Bazaar that the importance of source code accessibility was that it made for rapid development and fewer software bugs. Yet, for free software supporters, quality software is not nearly as important as user empowerment.
That brings up the third definition of the difference between "open source" and "free software": the question of whether your first priority is your own convenience as a developer, or increased control of computing for everyone.
In an interview with Forbes magazine, Linus Torvalds places himself squarely in the open source camp under this definition when he jokes about why he prefers the second version of the GPL to the third:
If you're a mad scientist, you can use GPLv2'd software for your evil plans to take over the world ("Sharks with lasers on their heads!!"), and the GPLv2 just says that you have to give source code back. And that's OK by me. I like sharks with lasers. I just want the mad scientists of the world to pay me back in kind. I made source code available to them, they have to make their changes to it available to me. After that, they can fry me with their shark-mounted lasers all they want.
By contrast, to a free software supporter, Torvalds' view seems a statement of irresponsibility. As Stallman pointed out to me, one of Torvalds' objections to the latest version of the GPL was that it contained restrictions on so-called digital rights management (DRM) technology; essentially, Torvalds did not care about DRM as a consumer issue, so long as those who wrote it shared the code.