Scott McNealy, Chairman of Sun Microsystems, and Jon Schwartz, his CEO, remodeled Sun in the last two years after what I would call ‘the RedHat example’, as being most successful in free and open-source software (FOSS). The strategic question for Sun always was ‘how it would capitalize on the success of Java?’
Sun did more than that. Similar to RedHat with their division JBOSS, they too have an enterprise proven service-oriented architecture (SOA) stack. They also invested in a new FOSS Desktop and server operating system, virtualisation technology, and Microsoft Office competitor (Sun's StarOffice is based on OpenOffice.org and SUN actively supports OpenOffice).
FOSS is ready for global adoption. The question is now not 'should I use it?', but how?
A recent Gartner Survey confirms that of 244 interviewed multinationals around the globe 85 per cent are using open source and the remainder has plans to introduce FOSS within the next 12 months.
The messages I would have given president Obama are:
• FOSS is a leading driver for change at governments and multi-national corporations:
• Value generation through lower cost, higher quality, and participation:
• The software industry will evolve around the FOSS Model in the future, and;
• You already have FOSS, you just don't know.
A change driver
FOSS is driving change and the simple reason for this is the ability for an IT Team to start downloading and working on a topic. I am sure that many commercial software vendors are happy to give free demo versions or prepare some sales styled meetings, but with FOSS, everyone can go to www.sugarcrm.com or https://open-esb.dev.java.net/ and download it. After the prototyping, it can then be adopted right away without different cost structures.
The ability to start prototyping and learn is significant, even if you would eventually settle for a commercial product. Just the ability to start projects and pilot requirements, is very powerful to increase the speed and performance of any IT Team.
Look at the FOSS adoption at the City of Munich, French Police, UK Government, US Government, Malaysian Government, Nestle, Walmart and many of the IT Companies.
Sharpen the competitive edge
CIOs in companies with high adoption curve agree: The core value of FOSS is the strategic ability to influence the direction and to participate in the community. This is not a waste of time, but the competitive edge in delivering commodity products faster and better.
When an Application Server, or BI Tool, can adapt to specific business needs, the IT Team can execute faster and better. In the course of this, they also engage with the community to obtain better understanding and needs.
This is ‘Web 2.0 for Software’. Companies and individuals alike are becoming involved in creating better software and also driving it, where the ultimate user needs it. Companies like Microsoft, RedHat, and IBM are seeing eye-to-eye with users, architects, or developers, taking their free time to create better applications.
Companies are changing their business model from licensed software to support based charges, creating larger communities. Best talents from established companies are starting open source initiatives such as Alfresco Document Management and Collaboration software.
This cycle of increased media and corporate attention, increased adoption rate, followed by more contributors, eventually keeps improving the products, leading yet again to wider adoption.
However, it is also important to adjust to new paradigms: Maintenance reductions have a dependency on the delivery model in the organization. The typical approach is to purchase maintenance, ensure the license is upgradeable, access to patches and phone support. Do you really require support and maintenance? Patches are free, there is no commercial license, and ‘phone support’ can be replaced by email. Most likely you will get to applicable responses much faster in a larger community then otherwise.
Evolving around FOSS
FOSS’s strength lies in commodity products. Just compare middleware tools five years ago with today. With the rise of SOA, software vendors developed higher-end products on top of the typical middleware, which has been championed by FOSS products. Without this innovation cycle, cost pressure on licenses might be much higher than this is the case today.
This trend will continue. We can see that FOSS middleware products are able to adapt to new standards (Java 5 and 6) much faster than some of the commercial ones.
CIOs might ask if FOSS is really working. Is the market share really there?
Three answers:
• What is the market? FOSS expands the market. Not many companies will roll-out document management, to all employees during these times. With FOSS products only professional services remain, which expands the market size.
• Compare the latest quarterly results from both Sun and RedHat with Microsoft or other traditional commercial players. It seems that companies are not doing less, but possibly more but with different tools. The challenge only is that the revenue based sector analysis is not covering this shift.
• Software companies who are changing their business model, to “Open Source” are on the increase, as well.
Again, it is important not to compare FOSS with commercial products, but product A with product B and to understand some of the advantages each model offers. There are great commercial applications in the commodity and business application space, adding value to the bottom line. These should not be reduced to just a price tag.
That said, I do believe that open source will gain a foot hold, especially in commodity areas, and that commercial players will have to segment their products and offerings into free (not necessarily open source) and commercial product, in the longer run.
While ERP might not be the prime focus for open source yet, there is an increasing adoption by multinationals in selective platforms, like SugarCRM, OrangeHR, or Compiere ERP.
Ubiquitous presence
It is important to note, that FOSS is almost ubiquitous already. Microsoft is engaging in open source activities with its .NET Marketplace and also reselling Linux in cooperation with Novell.
Software Developers working with Java using open source for development testing, reusable component frameworks and methodologies, even if the target is a commercial products. Especially IT Services Companies are taking the licenses costs out of the equation and boost their margins, while increasing the productivity of developers with advanced tool sets.
Other examples include mobile phones: Nokia uses Symbian as platform, a product which is open source. T-Mobile (manufactured By HTC) uses the Google/Linux Operating System Android, the new Palm Pre phone is based on Linux Kernel.
The chances that you are already using open source in your corporation is very high. The key is to also leverage its benefits.
In case you like to leverage some of the opportunities, start to assemble a core team to focus on some of the key platforms in your department and understand where FOSS may play a role.
Select FOSS products with active communities and commercial backing.
Conduct a prototype first within the IT Department and then with a smaller and more flexible user group to gain experience. The key adoption factor is “it works”.
Most likely there will initially be issues and it depends on the IT team to fix and perfect the prototype. This should give you the input for a strategic approach, with clear policies, governance, and also the understanding in which communities you want to involve yourself in.
Axel Winter is director financial services and response for IT Consulting SouthEast Asia. He started using Linux in 1993 and also introduced into Asia. He used it to reduce cost and leverage community involvement, also in his prior position as Global Chief Architect at GE Money.
