Open Source and its role in a new IT ecosystem

Open Source and its role in a new IT Ecosystem Heise Congress „Open Source meets Business“ Bob Gett Nürnberg, January 27, 2007

Abstract – not to be presented
Open Source and it’s role in a new IT ecosystem
Open Source has gone a long way and is one of the most influential trends in modern information technology. It’s one of the fastest growing segments and the adoption rate in large and small enterprises is breath taking. Open Source is everywhere be it in commercial products, appliances, software-as-a-service offerings or web 2.0 solutions. This presentation will illustrate the developing open source eco systems and position the wide range of players contributing, profiting and influencing the further development. Using open source adoption and an overall maturity assessment it will be explained why and how open source is used, what can be expected from it over the next years and what role IT services play in this scenario.

What is Open Source - really?
More than 150’000 projects
Wide range of information technology platforms, solutions and components
Production ready tools but also obsolete or immature projects
Large endeavors and small projects (e.g. 1 developer)

An Open Source time table 1980 1990 2000 2010 Pioneer Age “ Free” and Community Age Adoption by (Enterprise) Developers Open Source Based Business Models Adoption by the Enterprise Open Source Enabled Business

The (r)evolutionary elements of Open Source and their impact on the IT industry The nature of Open Source Low cost scalable software distribution Collaborative software engineering Non monopolistic transparent technology access Impact on software industry
Massive pressure on price levels
New pla yers can enter the market very quickly at lowest cost
Value of local sales force decreases
Open Source projects are able to enhance functionality and quality faster thanks to the massive forces of the community
Rapid adaptations to local needs (e.g. language support) possible
Low cost development approach also open to commercial vendors
Support/maintenance becomes a competitive environment
Need for quality and fairness along many different aspects
Fast development of new solutions based on components available to anybody

The cost advantage of open source based software companies is huge … License Revenues Service Revenues Cost of Revenues Income from operation Research& Development Sales & Marketing G&A, Facilities, …. 50% 50% 22% 14% 38% 8% 18% Sample profit and loss statement of large scale software vendor << 25% OSS “cost”

… and Open Source software is progressing very quickly in terms of richness and quality Functionality/ Quality/Stability Time 2001 2003 2005 2007 Traditional commercial software Open Source software Gap Baseline user needs

Open Source is growing fast and outpacing traditional software vendor growth … Source: Gartner Open Source Summit 2006: “The Economics of Open Source - Measuring Market Influences” (Laurie Wurster) 8% 7% 93% 2005 2010 10% CAGR 30% 30% 7.8% $172B $277B Traditional Software Vendors Internal OSS Developm. External OSS Providers Entire Software Market
Average „value“ per project is very small, market is very fragmented
More and more use of Open Source in the enterprise
More and more use of Open Source for strategic and mission critical projects
Growing market creates the ground for a substantial services business (at approximately 2-5 times of software value this would result in a services market of more than 20 to 40 billion USD)

... and creating its own Open Source Ecosystem Open Source Users Support Maintenance/ Packaging Consulting System Integration Experts, press, influencers Foundations/ platforms Traditional software companies Open Source projects/ „products“ Hardware provider
O‘Reilly
Linux World
Heise
Apache
Mozilla
OSTG/ sourceforge
Oracle
Microsoft
IBM
CA
IBM
Sun
HP
Companies
Organizations
Individuals
GNU
OpenOffice.org
PostgreSQL
Alfresco
MySQL
Linux
Red Hat
SpikeSource
SourceLabs
JBoss
Red Hat
MySQL
Optaros
HP
IBM
Open Source Communities

Open Source business models are based on mainly four revenue models System Integration Pure commercial license Dual Licenses Packaging/Maintenance Product based services Value add services Product (IP transfer) Services (IP leverage) Support Training Hosting/operation „ Subscriptions“/“Per Use“ Proprietary Offerings Pure commercial license Packaging/Maintenance Product based services Value add services IP “ bound ” IP “ usage ” Product (IP transfer) Support Training Professional services Hosting/operation Consulting 1 2 3 “ Subscriptions ” / “ Per Use ” IP = Intellectual Property Advanced features 4 Technology licensing

Characteristics of Open Source software drive the need for IT services
Characteristics of Open Source
Open Source landscape is difficult to comprehend and navigate
Open Source software cannot be acquired following the usual purchasing pattern (e.g. RFI/RFP)
OSS project focus on functions not support and maintenance
Open Source software often is consumed as components and assembled to new solutions that lack single point of contact support
Open Source software often gets released frequently and in difficult to predict time scales
Open Source projects are often purely virtual and cannot be present locally
Open Source software can be integrated and used in many different ways
High pace of technology innovation
Need created for IT services
Solution and component selection services
Software evaluation and “Proof of Concept” services
Solution packaging and release management services
Support and application management services
Professional umbrella on top of Open Source projects
Local presence and delivery mechanisms
Integration and testing services
Expert advise and consulting services
Expert capacity sharing services

Open Source is a the driver and enabler of many other innovative businesses Open Source enabled business Commercial Software Appliances Software as a Service Web 2.0 Examples

Open source enables a new alternative for enterprises deploying new business applications Custom fit Cost Effectiveness
Custom development effort is focused on unique business differentiators
Extend “code reuse repository” by leveraging high quality, broadly-available open source components
The approach is proven, iterative, and fast-paced

Open source software and standards play a key role in the Next Generation Internet Platform Users & Partners Presentation Application Monolithic, Layered HTML, Links, Forms, Page-centric Assembled, Composite Rich UI Elements Application- Centric SOA, Orchestrated Partner Platform Tightly Integrated, Server-centric Highly Integratable, Loosely Integrated, Service-centric, Standards Driven First Generation Constrained by Limitations Next Generation Internet Embraces the Capabilities Synchronous, Page-centric Asynchronous, Desktop-quality, Application-centric “ Surfing”, Transacting, Personalized Collaborative, Community enabling, Sharing, Participating

Enterprises will achieve new capabilities with the next generation of internet applications Business Benefits of NGI More meaningful interactions True usability Agility and flexibility
Frequent, deeper interactions with customers, partners, employees
Two-way communications
Participation creates loyalty
Lightweight deployment with rich desktop-like model
Higher adoption rates
Increased user satisfaction
Mash-ups and composite apps from existing services, components
Low cost of entry/exit
Standards avoid vendor lock-in
Innovation at Internet speed
Access to network of innovators (customers, suppliers, partners)
Risk mitigation through small projects

Optaros‘s response to services requirements: globally delivered solutions for local needs Collaborative Global Delivery Content Management Rich User Interface SOA/Enterprise Architecture Consulting/ Advisory Solution implemen- tation Solution management Operation & Support Practices/ Competencies Local presence Execution Services * Foreseen geographical expansion eCommerce KM & Collaboration Direct Consumer Engagem. Self Service Media & Publishing Business Solutions US Switzer- land Germany Romania UK* Open Source enabled Assembly Methodology (OptAM) Research and Knowledge Capturing/Packaging Methodology IP

The Optaros Open Source Catalogue 2007 as a navigational guide
Listing and evaluation of 260 enterprise-
ready Open Source projects and products
Coverage of four software categories
Operating systems and infrastructure
Application development and infrastructure
Infrastructure solutions
Business applications
Approximately 50% with professional support
33% under GPL license, 16% Apache, 15% LGPL, etc.
Approximately 1/3 Java based
Each technology is briefly described and rated
Links/URL for further research provided

Thank you for your attention
Optaros USA
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Optaros Europe
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www.optaros.com

Your Optaros Contacts in Europe
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Theresienstrasse 6-8 D-80333 München P: +49 (0) 89 288 90 379 F: +49 (0) 89 288 90 45 Weinbergstrasse 147 CH-8006 Zürich P: +41 (0) 44 362 11 11 F: +41 (0) 44 362 11 17 Geneva Business Center GBC-1 12, Avenue the Morgines CH-1213 Genève/Petit-Lancy P: +41 (0) 22 731 84 20 F: +41 (0) 22 731 85 64 www.optaros.com/de www.optaros-update.blogspot.com Lutz Seeger Sebastian Wohlrapp Jürg Heim Bruno von Rotz Kay Flieger Frédéric Weill

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Open Source and its role in a new IT ecosystem

by Bruno von Rotz on Feb 09, 2007

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Open Source and its role in a new IT ecosystem — Presentation Transcript