Open Source and its role in a new IT ecosystem

Slide 1: Open Source and its role in a new IT Ecosystem Heise Congress „Open Source meets Business“ Bob Gett Nürnberg, January 27, 2007

Slide 2: 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. 2

Slide 3: 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) 3

Slide 4: An Open Source time table Pioneer Age “Free” and Community Age Adoption by (Enterprise) Developers Open Source Based Business Models Adoption by the Enterprise Open Source Enabled Business 1980 1990 2000 2010 4

Slide 5: The (r)evolutionary elements of Open Source and their impact on the IT industry Impact on software industry • Massive pressure on price levels Low cost scalable software • New players can enter the market distribution very quickly at lowest cost • Value of local sales force decreases • Open Source projects are able to Collaborative software The nature of Open Source enhance functionality and quality engineering 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 Non monopolistic transparent competitive environment technology access • Need for quality and fairness along many different aspects • Fast development of new solutions based on components available to anybody 5

Slide 6: The cost advantage of open source based software companies is huge … Sample profit and loss statement of large scale software vendor OSS “cost” 50% 22% <<25% 14% 38% 50% 8% 18% License Service Cost of Research& Sales & G&A, Income Revenues Revenues Revenues Development Marketing Facilities, from …. operation 6

Slide 7: … and Open Source software is progressing very quickly in terms of richness and quality Functionality/ Quality/Stability Traditional commercial software Baseline user Open Source Gap needs software 2001 2003 2005 2007 Time 7

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

Slide 9: ... and creating its own Open Source Ecosystem • Apache • GNU • O‘Reilly • Mozilla • OpenOffice.org • Linux World • OSTG/ • PostgreSQL • Heise sourceforge Foundations/ • Companies Experts, press, platforms • Organizations influencers • Individuals Traditional Open Source • JBoss software Communities Open Source • Red Hat companies Users • MySQL Open Source Oracle • Maintenance/ projects/ • Microsoft Packaging „products“ Support • IBM System • CA Integration Hardware provider Consulting • IBM • Optaros • Alfresco • Sun • HP • Red Hat • MySQL • HP • IBM • SpikeSource • Linux • SourceLabs 9

Slide 10: Open Source business models are based on mainly four revenue models (IP transfer) (IP transfer) Product Pure commercial license Advanced IP 1 Proprietary Offerings features “usage” Technology 2 Dual Licenses licensing 3 “Subscriptions” / “Per Use” Packaging/Maintenance (IP leverage) Services Packaging/Maintenance „Subscriptions“/“Per Use“ Support Product based services Product based services Training IP Professional “bound” services Hosting/operation 4 Value add services System Integration Consulting IP = Intellectual Property 10

Slide 11: Characteristics of Open Source software drive the need for IT services Characteristics of Open Source Need created for IT services Open Source landscape is difficult to Solution and component selection comprehend and navigate services Open Source software cannot be Software evaluation and “Proof of acquired following the usual Concept” services purchasing pattern (e.g. RFI/RFP) OSS project focus on functions not Solution packaging and release support and maintenance management services Open Source software often is Support and application management consumed as components and services assembled to new solutions that lack single point of contact support Open Source software often gets Professional umbrella on top of Open released frequently and in difficult to Source projects predict time scales Open Source projects are often purely Local presence and delivery virtual and cannot be present locally mechanisms Open Source software can be Integration and testing services integrated and used in many different ways High pace of technology innovation Expert advise and consulting services Expert capacity sharing services 11

Slide 12: Open Source is a the driver and enabler of many other innovative businesses Examples Commercial Software Appliances Open Source enabled business Software as a Service Web 2.0 12

Slide 13: Open source enables a new alternative for enterprises deploying new business applications Optaros Application Assembly Build Buy Use Existing Open Source Cost Custom fit Components & Effectiveness Customize around the Edges 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 13

Slide 14: Open source software and standards play a key role in the Next Generation Internet Platform First Generation Next Generation Internet Constrained by Limitations Embraces the Capabilities Users & Partners “Surfing”, Transacting, Collaborative, Community enabling, Personalized Sharing, Participating HTML, Links, Rich UI Application- Forms, Presentation Elements Centric Page-centric Asynchronous, Desktop-quality, Synchronous, Application-centric Page-centric Monolithic, Assembled, SOA, Partner Application Layered Composite Orchestrated Platform Highly Integratable, Loosely Integrated, Tightly Integrated, Service-centric, Standards Driven Server-centric 14

Slide 15: Enterprises will achieve new capabilities with the next generation of internet applications • Frequent, deeper interactions with More meaningful interactions customers, partners, employees • Two-way communications • Participation creates loyalty • Lightweight deployment with rich True usability desktop-like model Business Benefits of NGI • Higher adoption rates • Increased user satisfaction • Mash-ups and composite apps from Agility and flexibility existing services, components • Low cost of entry/exit • Standards avoid vendor lock-in • Access to network of innovators Innovation at Internet speed (customers, suppliers, partners) • Risk mitigation through small projects 15

Slide 16: Optaros‘s response to services requirements: globally delivered solutions for local needs Switzer- Local US Germany Romania UK* land presence Collaborative Global Delivery Execution Direct Business KM & Media & eCommerce Consumer Self Service Solutions Collaboration Publishing Engagem. Content Rich User SOA/Enterprise Practices/ Management Interface Architecture Competencies Open Source enabled Assembly Methodology (OptAM) Methodology Research and Knowledge Capturing/Packaging IP Consulting/ implemen- & Support Operation manage- Advisory Solution Solution tation ment Services * Foreseen geographical expansion 16

Slide 17: 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 17

Slide 18: Thank you for your attention Optaros USA Optaros Europe Boston Geneva New York Zurich San Francisco Munich Chicago Bucharest Austin www.optaros.com 18

Slide 19: Your Optaros Contacts in Europe München: Theresienstrasse 6-8 Lutz Seeger D-80333 München P: +49 (0) 89 288 90 379 F: +49 (0) 89 288 90 45 Zürich: Weinbergstrasse 147 Sebastian Wohlrapp CH-8006 Zürich Jürg Heim P: +41 (0) 44 362 11 11 Bruno von Rotz F: +41 (0) 44 362 11 17 Genf: Geneva Business Center GBC-1 Kay Flieger 12, Avenue the Morgines Frédéric Weill 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 19