What is Open Source Risk

Open source risk is the potential exposure to security vulnerabilities, license violations, operational failures, and compliance issues from using open source software components in your technology stack or vendor solutions. Organizations face these risks when third-party vendors incorporate unvetted open source dependencies without proper governance, creating supply chain vulnerabilities that can cascade through interconnected systems.

Key takeaways:

• Open source components comprise 70-most modern software applications
• License violations can trigger legal action and forced code disclosure
• Unpatched vulnerabilities in dependencies create attack vectors
• Regulatory frameworks now mandate open source inventory and risk assessment
• Vendor dependency scanning is becoming a standard due diligence requirement

Open source software powers the digital economy. Your vendors use it. Your internal teams depend on it. Yet most organizations lack visibility into the open source components embedded in their third-party solutions.

This blind spot creates cascading risks. A single vulnerable dependency can expose multiple organizations through shared vendor relationships. License violations can force proprietary code disclosure. Abandoned projects can leave critical systems without security updates.

Compliance teams now face mounting pressure to assess open source risk. SOC 2 Type II audits increasingly probe for software composition analysis. ISO 27001:2022 explicitly requires supply chain security controls. Executive Order 14028 mandates software bills of materials (SBOMs) for government contractors.

This guide maps open source risk to your existing third-party risk management program. You'll learn which frameworks require assessment, how to evaluate vendor practices, and what controls to implement.

Definition and Scope

Open source risk encompasses four primary exposure categories:

Security Risk: Known vulnerabilities in open source components that attackers can exploit. The Log4Shell vulnerability (CVE-2021-44228) demonstrated how a single open source flaw can impact thousands of organizations simultaneously.

License Risk: Legal exposure from license non-compliance, including copyleft obligations that could force proprietary code disclosure. GPL violations have resulted in injunctions and financial settlements.

Operational Risk: Dependencies on unmaintained projects, single maintainers, or components without commercial support. When a solo maintainer abandons a critical library, downstream applications lose security updates.

Quality Risk: Technical debt from outdated dependencies, conflicting versions, or poorly documented components that increase maintenance costs and system instability.

Regulatory Requirements

Multiple frameworks now explicitly address open source risk:

SOC 2 Trust Services Criteria

• CC3.2: Requires communication of objectives and responsibilities, including third-party component management
• CC6.1: Mandates logical and physical access controls to software assets
• CC7.1: Requires vulnerability identification and remediation processes

ISO 27001:2022

• A.5.19: Information security in supplier relationships
• A.5.20: Addressing information security within supplier agreements
• A.8.30: Software supply chain security controls

NIST Cybersecurity Framework 2.0

• ID.SC-2: Suppliers and third-party partners of information systems assessed for cybersecurity risks
• ID.SC-4: Suppliers and third-party partners routinely assessed using audits, test results, or other evaluations

Industry-Specific Mandates

• Financial Services: FFIEC guidance requires software composition analysis for critical applications
• Healthcare: FDA premarket cybersecurity guidance mandates SBOM submission for medical devices
• Federal Contractors: Executive Order 14028 requires SBOM delivery and vulnerability disclosure

Risk Assessment Process

Effective open source risk assessment follows a structured approach:

1. Inventory Creation

Map all open source components through:

• Software Composition Analysis (SCA) tools
• Developer surveys
• Build system analysis
• Container scanning

2. Vulnerability Identification

Cross-reference components against:

• National Vulnerability Database (NVD)
• GitHub Security Advisories
• Vendor-specific databases
• Commercial threat intelligence

3. License Analysis

Evaluate compliance requirements:

• Permissive licenses (MIT, Apache 2.0, BSD)
• Weak copyleft (LGPL, MPL)
• Strong copyleft (GPL, AGPL)
• Commercial or proprietary licenses

4. Dependency Mapping

Trace transitive dependencies:

• Direct dependencies your code explicitly uses
• Indirect dependencies pulled by direct dependencies
• Development dependencies used in build processes
• Runtime dependencies required for operation

Vendor Due Diligence

When evaluating third-party open source practices, request:

Documentation Requirements:

• Current SBOM in SPDX or CycloneDX format
• Open source governance policy
• Vulnerability disclosure timeline
• License compliance procedures

Technical Controls:

• Automated dependency scanning frequency
• Patch management SLAs
• Version pinning practices
• Security update procedures

Process Maturity Indicators:

• Dedicated open source program office (OSPO)
• Contribution guidelines for upstream projects
• Internal fork management procedures
• Developer training on secure coding

Control Implementation

Organizations should implement controls across three layers:

Policy Layer

• Approved license list defining acceptable terms
• Component approval workflow for new dependencies
• Vulnerability severity thresholds triggering remediation
• Vendor open source requirements in contracts

Technical Layer

• SCA tool integration in CI/CD pipelines
• Dependency update automation
• Container image scanning
• SBOM generation and storage

Process Layer

• Regular dependency audits (quarterly minimum)
• Vulnerability response procedures
• License review for new components
• Vendor assessment questionnaires

Common Misconceptions

"Open source is inherently less secure": Open source enables security through transparency. Many critical infrastructure projects undergo more rigorous review than proprietary alternatives.

"License risk only matters for distributed software": SaaS providers face disclosure obligations under AGPL. Internal use can trigger support and indemnification issues.

"We don't use open source": Every modern application includes open source components. The question is whether you track them.

"Our vendors handle this": Shared responsibility models require customer participation. You own the risk even when vendors manage the components.

Practical Implementation

Start with critical vendors and high-risk applications:

1. Require SBOM delivery for new vendor contracts
2. Add open source sections to security questionnaires
3. Include dependency scanning in vendor audits
4. Establish remediation SLAs based on severity
5. Monitor for end-of-life components quarterly

Track metrics that demonstrate program maturity:

• Mean time to patch critical vulnerabilities
• Percentage of dependencies with known owners
• License compliance audit results
• SBOM coverage across vendor portfolio

Frequently Asked Questions

What's the difference between SBOM formats like SPDX and CycloneDX?

SPDX focuses on license compliance with detailed copyright information, while CycloneDX emphasizes security with native vulnerability tracking. Both formats are machine-readable and increasingly interoperable through tools like OWASP Dependency-Track.

How do we assess open source risk for SaaS vendors who don't distribute software?

Request runtime SBOMs, vulnerability management procedures, and dependency update cycles. Focus on their patching SLAs and whether they monitor for zero-day vulnerabilities in components they use.

Which regulations specifically require open source risk assessment?

Executive Order 14028 mandates SBOMs for federal contractors. EU's Cyber Resilience Act will require vulnerability handling for all software with CE marking. Sector-specific guidance from FDA, NIST, and financial regulators increasingly expects software composition analysis.

Should we prohibit certain open source licenses entirely?

Blanket prohibitions often prove impractical. Instead, establish license tiers: auto-approved (MIT, Apache), review required (LGPL), and restricted (GPL/AGPL). Context matters—GPL in development tools poses different risks than GPL in distributed products.

How do we handle transitive dependencies we don't directly control?

Document the full dependency tree, establish maximum acceptable depth, and use tools that flag license conflicts or vulnerabilities at any level. Work with vendors to prune unnecessary transitive dependencies.

What's the relationship between container scanning and open source risk?

Container images bundle open source components from base OS to application libraries. Container scanning identifies these components but may miss dynamically loaded dependencies. Combine container and application-level scanning for complete coverage.