There is a place in between -- friends with benefits. Even if you haven't been intimate, he may like the physical connection -- kissing, cuddling, etc. But he may not feel he's ready for a relationship, which implies talking to and seeing each other regularly, exclusivity, planning something of a future together. Women are more likely to just see two options: friends or relationship. Men see it as a continuum, with friends at one end and relationship on the other.

Based on the little you've said, take him at what he told his friend. See others. Don't expect a commitment or exclusivity. Don't do anything (like get intimate) that would make you feel he's more committed than he is, or make you become more attached than casual.

If you really want a relationship, and have the patience and time to just hang with him, fine. But if you want/need more of a commitment, then *you* decide to just be friends and see what he does. He may say "okay" or he may step up his game.