That's the GPL, which only concerns itself with the distribution of (derivative) works. If you modify GPL'ed software for your own use, without distributing it, you can keep your modifications for yourself.
SaaS companies were (ab)using that bug by using GPL'ed software in their stack, but never distributing the code: they just rent out use of their machines to others. Therefore they don't need to distribute their own source code.*
The AGPL fixes that "bug" by including the SaaS "software on demand" in the definition of "distribution".
That's my understanding, as a layman AGPL fan. :)
*Where relevant. There are many scary stories about the overreach of the (A)GPL, but it's not always that bad. E.g. if you just use an AGPL'ed database, not embedded or linked but really like a DB with a separate connection, then your code is not under AGPL. Again, from my understanding as a layman.
To understand the GPL family, here's a rule of thumb: they try to ensure to freedom of the software user, not the software developer. The GPL restricts the freedom to restrict freedom. It goes out of its way to ensure users retain their freedom when using software, including the freedom to see the source code and modify it. In interviews, RMS often talks about his frustrations as a software user. From this point of view, the GPL makes more sense. This is also why the GPL is constantly being updated to fix "bugs" which publishers exploit, to circumvent it (TiVoization, SaaS, something else will surely follow).
MIT/BSD, on the other hand, are about developers. They let me, as a developer, do what I want, including restrict my users. This is why they're popular among... developers! :) But if you look at it as a user, it's actually not ideal.
This is a gross oversimplification, but I find it helps put things in perspective. YMMV!
SaaS companies were (ab)using that bug by using GPL'ed software in their stack, but never distributing the code: they just rent out use of their machines to others. Therefore they don't need to distribute their own source code.*
The AGPL fixes that "bug" by including the SaaS "software on demand" in the definition of "distribution".
That's my understanding, as a layman AGPL fan. :)
*Where relevant. There are many scary stories about the overreach of the (A)GPL, but it's not always that bad. E.g. if you just use an AGPL'ed database, not embedded or linked but really like a DB with a separate connection, then your code is not under AGPL. Again, from my understanding as a layman.