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Open source software brings enormous advantages, but it also introduces several important risks that software producers must manage. Compliance issues can arise when licensing terms aren’t fully understood or followed, particularly when components include copyleft licenses. Security vulnerabilities are another top concern, especially when outdated or unmaintained components remain embedded in products. Operational and export‑restriction risks further complicate usage, especially for companies distributing products globally. Understanding and monitoring your full dependency list is essential for reducing exposure.

Software supply chains have grown increasingly complex, making it difficult for organizations to fully understand where their components come from and how secure they really are. As attackers increasingly target open source components as entry points, vulnerabilities can ripple across thousands of organizations at once. High‑profile ransomware incidents show how a single exploited dependency can shut down operations, disrupt customers, and trigger significant financial loss. New regulations in the U.S. and EU now require higher levels of transparency and accountability, pushing supply chain security to the forefront. Strong governance and continuous monitoring are now non‑negotiable for modern software teams.

A Software Bill of Materials (SBOM) is a detailed inventory of all open source and third‑party components within a product. It helps teams quickly identify which products are affected when new vulnerabilities are discovered, enabling faster and more accurate remediation. SBOMs also help organizations respond to customer and regulatory requirements that increasingly mandate transparency into software composition. With thousands of potential dependencies in a single product, manual tracking is no longer viable. An SBOM gives software producers the visibility they need to manage risk effectively and confidently.

These new EU regulations expand security and compliance expectations across industries, requiring stronger cybersecurity controls, risk management processes, and incident reporting. They apply not only to major corporations but also to smaller organizations selling digital products or services in the EU. Many requirements focus on securing the entire supply chain, not just proprietary components. This means software producers must understand the security posture of all dependencies and ensure responsible open source management. Failure to comply can result in significant penalties, making early preparation essential.

While the Executive Order primarily applies to software sold to the U.S. government, its impact extends far beyond federal contracts. Many private sector customers now expect SBOMs, secure development practices, and attestations that match or exceed federal standards. Because organizations cannot inspect proprietary code directly, they rely on software suppliers to provide this transparency. This shift means software producers must implement formal processes for identifying vulnerabilities and tracking third‑party components. Even companies with no government customers are feeling the downstream influence of these requirements.

Small teams can still build a strong compliance program with the right processes and automation. The first step is establishing policies for evaluating and approving open source components before use. Automated scanning tools help detect licenses, vulnerabilities, and outdated components without requiring manual review of every file. Maintaining an SBOM and keeping dependency information organized reduces the burden of audits and customer inquiries. With clear guidelines and the right tools, even small teams can manage compliance efficiently.

Generative AI tools can unintentionally reproduce copyrighted or open source code without proper attribution, creating licensing and compliance challenges. Because developers often paste snippets directly into products, these risks can enter the codebase unnoticed. Without scanning or review, companies may unknowingly distribute code under licenses incompatible with their business model. AI‑generated output can also contain inaccuracies or hallucinations that introduce bugs or security issues. Treating AI‑assisted development with the same rigor as human‑written code is essential for maintaining product integrity.

The most reliable approach is to use automated code‑scanning tools capable of identifying partial matches and code snippets—not just full files. These tools compare code against large repositories of open source projects to detect similarities, even when variable names or formatting differ. By running scans during code review or CI/CD processes, teams can catch problematic suggestions before they enter the final product. Maintaining detailed SBOMs and usage documentation provides further clarity on where components originate. Combining policy, training, and automation is the most effective strategy.

Building a secure supply chain starts with visibility—knowing exactly which components are used, where they come from, and how they are maintained. Implementing an SBOM for every product provides the foundation for proactive security and compliance. Automated vulnerability scanning and dependency monitoring help detect issues early and reduce manual workload. Teams should also establish policies for secure open source usage, AI‑tool governance, and patch lifecycle management. When combined, these practices create a resilient environment that reduces risk and increases customer trust.

Inadequate visibility into open source components can lead to unexpected build failures, security incidents, or licensing violations—all of which harm operational stability. A single unmaintained dependency can cause widespread outages or force last‑minute re-engineering. Customers increasingly expect transparency and may require SBOMs or security audits before purchasing software. Poor handling of open source risk can delay sales cycles and damage long‑term trust. Strong open source governance helps minimize these disruptions and supports smoother business growth.