Economics of open source, OW2con11, Nov 24-25, Paris

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Economics of open source, OW2con11, Nov 24-25, Paris

  1. 1. The Changing Nature of Open SourceOW2con 2011November 23-24ParisCedric ThomasCEO, OW2
  2. 2. 0> The freedom to run the software for any purpose1> The freedom to study how the software worksand to adapt it to your needs2> The freedom to redistribute copies of thesoftware3> The freedom to improve the software anddistribute your improvements to the public 3
  3. 3. Open Source Achievement market share +- 50% Apache server Apache has been the leader in web server platform since years. It dominates with over 50% of market share.Image: http://www.chotocheeta.com/2009/03/06/apache-vs-litespeed-time-to-switch/ © OW2 Consortium 2011 www.ow2.org 4
  4. 4. Open source software market >$8b 9 8 7 6 5 Billion US$ 4 3 2 1 0 Ligne 21Source: IDChttp://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090729005107&newsLang=en 5
  5. 5. Even VCs Like Open Source investments >$3b VC Since the first venture investment in an open source vendor in 1997: $3.2bn has been raised by 163 open source vendors through 378 separate funding deals.Source: The 541 Group, 2008http://blogs.the451group.com/opensource/2009/04/08/the-past-present-and-future-of-vc-investment-in-open-source/© OW2 Consortium 2011 www.ow2.org 6
  6. 6. And Red Hat Makes the S&P 500 NEW YORK, July 17 /PRNewswire/ -- Red Hat Inc. (NYSE: RHT) will replace CIT Group Inc. (NYSE: CIT) in the S&P 500 after the close of trading on Friday, July 24.© OW2 Consortium 2011 www.ow2.org 7
  7. 7. Free Software Commercial Open Source© OW2 Consortium 2011 www.ow2.org 8
  8. 8. Weblogic JOnAS Websphere Jboss Glassfish OpenText Nuxeo (Vignette) Alfresco (Documentum) Drupal Business Objects SpagoBI InfoBuilder Jaspersoft Cognos PenthaoProprietary Open Source Leaders MS Sharepoint Exo Platform Challengers (Hummigbird) Liferay (Plumtree) netNUKE SAP Compiere (Peoplesoft) OpenBravo (JDE) Nexedit (Sonic) PEtALS Tibco Mule IBM ServiceMix IBM Bonita Oracle JBPM W4 Shark© OW2 Consortium 2011 www.ow2.org 9
  9. 9. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COS The Case for Open SourceCommoditization Process Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity© OW2 Consortium 2011 www.ow2.org 10
  10. 10. Free Software Makes Sense© OW2 Consortium 2011 www.ow2.org
  11. 11. Open Source isEconomically Efficient What you give Software code € $ What you gain £ Free expertise ¥ Experience Market share (if you are a software vendor)© OW2 Consortium 2011 www.ow2.org
  12. 12. Open Source isTechnically Efficient Quality Peer review Reliability State of the Art Global knowledge sharing Frequent releases© OW2 Consortium 2011 www.ow2.org
  13. 13. Open Source isStrategically Efficient For Vendors Accelerates time to market Business ecosystems leverage For Users Avoids vendor lock-in Stability and auditability© OW2 Consortium 2011 www.ow2.org
  14. 14. Open Source isSocially Efficient Grows local expertise Promote local software industry Empowers the commnunity Reduce technology lock-ins© OW2 Consortium 2011 www.ow2.org
  15. 15. Open Source is Efficient You can achieve... More Leverage resources from the community Better Benefit from the ideas and the experience of others Faster Quick response from the community.Image: http://ara.footblog.fr/615924/1-ER-TOUR-GROUPE-C-ITALIE-FRANCE/ © OW2 Consortium 2011 www.ow2.org 16
  16. 16. Still a Challenge for Others Quality not guarantied Code is provided "as is" Perceived legal risk OSS license are unproven No responsibility Code perceived anonymous Investment risk Small vendor companies Lack of stability Frequent releases Lack of roadmap No strategic "owner" Lack of internal competence Self-training not a policyImage: http://ara.footblog.fr/615924/1-ER-TOUR-GROUPE-C-ITALIE-FRANCE/ © OW2 Consortium 2011 www.ow2.org 17
  17. 17. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COS Open Source DisruptionCommoditization Process Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity© OW2 Consortium 2011 www.ow2.org 18
  18. 18. Source:Clayton M. Christensen, Innovators Dilemma, Harper Business, New-York, 2000 19Clayton M. Christensen and Michael E. Rayno, Innovators Solution, Harvard Business School Press, Boston, 2003
  19. 19. aturity se r m End-u Performance Time Source:  Clayton M. Christensen, Innovators Dilemma, Harper Business, New-York, 2000 Clayton M. Christensen and Michael E. Raynor, Innovators Solution, Harvard Business School Press, Boston, 2003  20
  20. 20. Functionality, Reliability... aturity se r m End-u Time Source:  Clayton M. Christensen, Innovators Dilemma, Harper Business, New-York, 2000 Clayton M. Christensen and Michael E. Raynor, Innovators Solution, Harvard Business School Press, Boston, 2003  21
  21. 21. Functionality, Reliability... aturity se r m End-u gs rin , o ffe turess ts ec m tranrchit syste e n a co SSdular ss E O o e M usin B Time Source:  Clayton M. Christensen, Innovators Dilemma, Harper Business, New-York, 2000 Clayton M. Christensen and Michael E. Raynor, Innovators Solution, Harvard Business School Press, Boston, 2003  22
  22. 22. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COSCommoditization Changing Nature of Open Source Process Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity 23
  23. 23. Changing Nature of Open Source OSS Offering 1980 2000 2020 24
  24. 24. Changing Nature of Open Source OSS Offering OSS Awareness 1980 2000 2020 1980 2000 2020 25
  25. 25. Changing Nature of Open Source OSS Offering OSS Awareness 1980 2000 2020 1980 2000 2020 OSS Experience 1980 2000 2020 26
  26. 26. Changing Nature of Open Source OSS Offering OSS Awareness 1980 2000 2020 1980 2000 2020 OSS Strategic Ability OSS Experience Passive OSS Disruption 1980 2000 2020 1980 2000 2020 27
  27. 27. Changing Nature of Open Source OSS Offering OSS Awareness 1980 2000 2020 1980 2000 2020 OSS Strategic Ability OSS Experience Proactive OSS Default Disruption Passive OSS 1980 2000 2020 1980 2000 2020 28
  28. 28. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COS A Profitable StrategyCommoditization Process Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity 29
  29. 29. Open Source isa Strategic Decision For Users  For Vendors  Avoids vendor lock-  Outsiders initiative in  New rules weaken  Investment leaders protection  Control
  30. 30. How do you make money with free software? 31
  31. 31. Free Software Makes Sense
  32. 32. Generic Open Source Business Model Add-onsProduct Solutions Suites Packaging Service Training Certification Consulting Subscriptions Expertise Systems Support IntegrationInsurance On-Line Services
  33. 33. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COSCommoditization Process Challenges New Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity 35
  34. 34. Leverage Business EcosystemsValue Chain Downstream flow of added value Vendor-Buyer relationships Quantitative rationaleEfficiency – Differentiation – Customer Ownership © OW2 Consortium 2007 36
  35. 35. Leverage Business EcosystemsValue Chain Business Downstream flow of Ecosystem added value  Value-added sharing Vendor-Buyer  Coopetition relationships relationships Quantitative rationale  Qualitative rationaleEfficiency – Differentiation – Customer Ownership Network Externalities © OW2 Consortium 2007 37
  36. 36. Leverage Open Source Sweet Spot Proprietary Models Business Heal t hCompetition U t i l i t i es Gover nm solution I nd ust r y F i nance Ret ai l E t c. ent C ar eCooperation Infrastructure Open SourceInfrastructure: Used by everyone, Shared by everybody The bedrock of our information society 38
  37. 37. OSS mostly following 2010 Cloud Computing OSS mostly racing 39
  38. 38. Leverage Cloud Computing Opportunities Open Cloud Requires OW2 to drive Open Source Open Source open source for Open Clouds innovation Cloud Architecture for open cloud Requires Innovation architectrure 40
  39. 39. Opportunities in Progress Industry  Automotive, Aeronautics  Embedded, R&D mutualization Government  Economies of scale  Public software (Brazil) Future Internet  Base R&D  Infrastructure Etc.?  ... 41
  40. 40. AgendaCommercial Open Source Defining moments OSS market growth OSS efficiency FLOSS became COSCommoditization Process Thank you Mature COS offerings Commodities Disruptive Innovation processOpen Source Opportunities The nature of COS Strategies The OW2 opportunity 42
  41. 41. www.ow2.org For more informations Please contact Cedric Thomas (CEO)‫‏‬ cedric thomas @ ow2 org 43
  42. 42. 44

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