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About Us > About | News | Strategy |
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Aug 11, 2003
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(The following article was written by Russ Scully and published in the August 2003 issue of the Champlain Business Journal.)
by Russ Scully - Scully Interactive
How can something that costs nothing be better than something you pay for?
This is the underlying question on the mind of every corporate decision maker when faced with the decision to move to open source. There are three possible paths for companies to take when planning their technology spending - open source, commercialized ("closed" source) software, or a hybrid of the two.
Open source software (OSS) is software that is freely distributed under the terms and conditions of the GNU Public License. Commercialized software is software that is packaged and sold as a proprietary system without access to the system source code. Software companies that create commercialized systems depend on the revenues they collect from licensing their software in order to be profitable. The big question in the technology industry for these companies is how will they compete with the growing popularity of open source software.
To understand the significance of this question, you have to look at it from the perspective of the commercialized software community. Everyone is familiar with the bigger members of commercialized software - Microsoft, Sun Microsystems, Oracle, Apple, etc. In order to stay competitive, each of these companies has had to carefully watch the others in order to plan, price, and partner accordingly. With open source rapidly gaining more and more marketshare, the commercialized software community has realized that a new competitor is on the scene and that this one is vastly different than the others.
How do you compete against something as intangible as open source? There isn't a company behind open source to negotiate with or to barter over territory or property rights with. You can't sue open source for intellectual property infringements because there isn't anyone to subpoena. And you certainly can't beat them on price unless you figure out a way to pay your customers to use your systems and still make money. So how will the commercialized software community respond? One thing is for certain, the manner in which they respond to this new competitor will have an enormous impact on their futures.
Commercialized software companies are learning that they need to partner with the open source community in order stay competitive. Technology spenders are looking for options between commercial and open source systems, and in some cases that could mean a hybrid of the two. Commercialized software companies see hybrids as a way to coexist with open source which is why many are investing in bridges that integrate their proprietary systems with open source compliments.
Take a look at Apple Computer. One of the biggest failures that critics blame Apple for is not licensing their operating system (OS). The Mac OS is so intuitive and user friendly it was even coveted by Bill Gates himself. Bill Gates wanted John Scully (who was the Apple CEO at the time) to license the OS. He told John that he would step him through the licensing process because he wanted to dump Windows and build software applications for the Mac OS. Apple would not do it. Today Apple has scrapped the operating system that was too good to share and has committed their future to open source. Apple's OSX is based on BSD - a popular open source operating system - and Apple is not looking back.
How are companies that currently purchase software systems reacting to the open source popularity? Many of them are wondering how something that costs nothing can be better than something they pay for. One of the factors that has made companies look at open source is the slowed economy and the restriction it puts on their technology spending. Large and small companies have had to find low cost alternatives for their system needs and open source is fitting the bill.
Cheaper doesn't always mean better, but in the case of open source many companies are laughing all the way to the bank. Open source solutions have given companies what they always wanted from commercialized alternatives - flexibility. Large and small companies used to compromise some of their system needs for off-the-shelf systems written for a general audience. Now those same companies are customizing open source systems to fit their specific present and future needs.
What about accountability, scalability, support, and security? The open source community has a collaborative value advantage in that many eyes are reviewing and improving the source code. This is a zealous band of veteran coders that carefully police and test all code additions for security and efficiency. As a result, open source code has proven to be more stable and more secure than commercialized alternatives. However, companies are not making any assumptions with respect to the security of open source software. Instead, they're doing their own internal reviews of the systems they're adopting and liking what they see.
The obvious missing pieces to implementing an open source solution is service and support. Although documentation efforts from the open source community have gotten better, companies are realizing the need for support when integrating and customizing their open source systems. For larger companies, support comes from hiring and training specialized IT staff. On the other hand, smaller companies are outsourcing their service and support needs to open source technology specialists that can tailor and support an open source solution.
The need for implementation support has created a market opportunity for technology firms who specialize in building, integrating, and maintaining open source systems. With the flexibility that open source offers, technology firms have the freedom they need to build and deliver highly customized solutions.
The technology industry has always been a fast moving, rapidly evolving landscape. Technology companies have had to be light on their feet and willing to adapt quickly to the ever-changing environment. With budget cutbacks on technology spending and increased pressure for return on investment, the open source option is finding its way into the board rooms of some of the largest global companies. These same companies are now realizing that the values of open source go well beyond price and this means more adaption will be required for commercialized software developers to stay in the game.
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| Oct 01, 2001 | > | Scully Published in Champlain Business Journal |
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