Open Source Think Tank: “The future of Commercial Open Source”

The Olliance Group, an open source consulting firm providing open source market analysis, released an executive summary (PDF) of the “Open Source Think Tank“.
The Olliance Group organized the second annual Think Tank on “The Future of Commercial Open Source” in California (Napa) on March, with participation from more than 100 open source leaders from around the world.

Trends Trends by farfalina

While invited, I couldn’t attend and I was eager to know what open source thought leaders think about the future, below some excerpts of the executive summary.

Tony Perkins, founder and editor of Red Herring magazine and the founder and editor of AlwaysOn, helding his keynote speech mentioned that the cost of starting an Internet company reported that it plummeted by over 80% from 1996 to 2004, trend largely enabled by open source software and powerful, cheap hardware.

The Think Tank guested two different CIO panel discussions, giving open source customers the chance to share their experiences with open source vendors.

CIOs unanimously agreed that open source is viewed as a viable option in software
procurement decisions for their companies. [..]
This is a marked difference from their attitude at last year’s Open Source Think Tank, when they were still hesitant to consider open source solutions.

However, even though open source is now welcome in the CIO suite, it still faces significant hurdles to adoption. Like proprietary software, open source must:

  • address a business need or solve a business problem
  • meet the technical requirements of the organization – reliability, architecture, etc.
  • be competitive in terms of TCO (more on this below)
  • have commercial support options
  • be a viable long-term solution, i.e. have one or more vendors and/or a strong community behind it.

While customers have traditionally been able to negotiate license terms (such as indemnification) with proprietary vendors, they do not have that option with non-commercially supported open source. [..]

The lack of commercially available support for some open source solutions continues to be a big barrier to adoption. [..]

Another significant barrier to adoption by customers is integration and interoperability. This includes the difficulty of integrating different open source applications and components into a working stack, as well as integrating open source into a company’s existing (proprietary) stack.

Open Logic research results previously mentioned seem quite accurate indeed.

About advantages:

Advantages of open source software (OSS) include flexibility in procurement of software and support, as companies can acquire OSS from a variety of sources, and can often pay for support (where available) in a variety of ways, such as by subscription agreement instead of a large upfront perpetual license fee.
Flexibility in deployment is another advantage, as companies can mix and match open source software as they please (deployment and customization of proprietary software is generally more restrictive due to license terms and lack of access to code).

Finally, faster product cycles are seen as a big advantage for open source – CIOs believe that product innovation is faster in open source than in proprietary software, and bug fixes are issued more quickly and frequently.

About open source myths:

The lack of a license fee or a lower acquisition cost for open source is not seen as a major advantage for open source software. Sunny Azadeh commented that “there is no such thing as free—you have to pay for everything.” Costs for open source can occur through deployment and migration, technology training and cultural and organizational changes. However, in some cases, canny CIOs are using open source’s reduced acquisition costs as leverage in negotiations with proprietary vendors.
The ability for users to try open source before purchasing it is becoming less important for customers, as proprietary vendors have responded by offering trial versions and free versions of their software.

Hints from CIOs:

CIOs encouraged open source vendors to build strong channels by partnering with other companies that offer solutions and have established customer bases. They discouraged small startups from trying to establish enterprise sales models due to the high cost, difficulty, and time required. The CIOs agreed that some level of personal touch by commercial open source vendors is needed. Tim Golden from Bank of America stressed that those firms that help solve problems (i.e. are willing to be in meetings, answer
questions, etc.) were most likely to get attention–in other words, don’t rely completely on the viral nature of open source to do all of your selling.

About the Open Source Think Tank
The Open Source Think Tank was an “by invitation-only” event limited to senior level open source executives and experts. Total attendance was capped to ensure the event would fulfill its purpose to enable interaction, discussion and networking opportunities for industry leaders in a small group format. This year’s attendees included 32 chief executives and 16 CTO/CIOs.

Others’ posts on this subject:

Open-source – state of the art, issues and opportunities
A think tank’s view of free software (only LWN subsribers)

Technorati Tags: Think Tank, Commercial Open Source, Olliance