The convergence of open source and Software as a Service Matthew Aslett , Analyst, Enterprise Software SugarCRM Accelerati...
About The 451 Group <ul><li>Independent technology industry analyst company </li></ul><ul><li>Focused on the business of e...
451 CAOS Research Service <ul><li>The impact of open source on software vendors, end users, and investors </li></ul><ul><u...
The convergence of open source and Software as a Service
What is (commercial) open source? <ul><li>A software development and distribution model enabled by a licensing tactic </li...
What is SaaS? <ul><li>A software delivery model  </li></ul><ul><li>Tend to be Web-based applications </li></ul><ul><li>Pro...
Similarities <ul><li>Disruptive </li></ul><ul><li>Initial proof-point </li></ul><ul><li>Wider implications </li></ul><ul><...
Open source-as-a-service providers
451 Group research findings <ul><li>CAOS report to be published October 2008 </li></ul><ul><li>Analysis of 114 vendors gen...
451 Group research findings <ul><li>Software as a Service </li></ul><ul><ul><li>Used by 16.0% of all open source vendors <...
Strengths and weaknesses: open source <ul><li>Strengths </li></ul><ul><ul><li>Lowers development and distribution costs </...
Strengths and weaknesses: SaaS <ul><li>Strengths </li></ul><ul><ul><li>Lowers barriers to adoption – no licensing </li></u...
Best of both worlds? <ul><li>Open source software </li></ul><ul><ul><li>Lowers development and distribution costs </li></u...
Q&A <ul><li>Matthew Aslett </li></ul><ul><li>Analyst, Enterprise Software </li></ul><ul><li>[email_address] </li></ul><ul>...
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451 Sugarcrm Aslett

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The convergence of open source and SaaS

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451 Sugarcrm Aslett

  1. 1. The convergence of open source and Software as a Service Matthew Aslett , Analyst, Enterprise Software SugarCRM Acceleration Summit September 17, 2008 • Radisson SAS Portman Hotel • London
  2. 2. About The 451 Group <ul><li>Independent technology industry analyst company </li></ul><ul><li>Focused on the business of enterprise IT innovation </li></ul><ul><li>700+ customers across </li></ul><ul><ul><li>Vendors </li></ul></ul><ul><ul><li>Investors (150 VCs and 80 Investment Banks) </li></ul></ul><ul><ul><li>Service-providers (SIs, consulting, etc.) </li></ul></ul><ul><ul><li>End users </li></ul></ul><ul><li>Offices in New York (HQ), Boston, London, SF </li></ul><ul><ul><li>80+ total employees w/ 35+ analysts </li></ul></ul>
  3. 3. 451 CAOS Research Service <ul><li>The impact of open source on software vendors, end users, and investors </li></ul><ul><ul><li>Ongoing coverage </li></ul></ul><ul><ul><li>Advisory service </li></ul></ul><ul><ul><li>Qualitative research </li></ul></ul><ul><ul><li>Quantitative surveys </li></ul></ul><ul><ul><li>‘Lessons learned' from early adopters and vendors </li></ul></ul><ul><ul><li>3 dedicated open source analysts </li></ul></ul>
  4. 4. The convergence of open source and Software as a Service
  5. 5. What is (commercial) open source? <ul><li>A software development and distribution model enabled by a licensing tactic </li></ul><ul><li>License ensures (among other things): </li></ul><ul><ul><li>Software is freely distributed </li></ul></ul><ul><ul><li>Source code is always available </li></ul></ul><ul><ul><li>Software can be modified and improved upon </li></ul></ul><ul><li>Lowers barriers to adoption </li></ul>
  6. 6. What is SaaS? <ul><li>A software delivery model </li></ul><ul><li>Tend to be Web-based applications </li></ul><ul><li>Provided as a monthly or annual service to users </li></ul><ul><li>Typically hosted and supported by the creator of the SaaS product, but third-parties may be involved </li></ul><ul><li>Aims to remove burden of IT operations and support from customer </li></ul>
  7. 7. Similarities <ul><li>Disruptive </li></ul><ul><li>Initial proof-point </li></ul><ul><li>Wider implications </li></ul><ul><li>State of flux </li></ul><ul><li>Everyone has an opinion </li></ul><ul><li>Incumbents struggling </li></ul><ul><li>Complementary, rather than competitive </li></ul>
  8. 8. Open source-as-a-service providers
  9. 9. 451 Group research findings <ul><li>CAOS report to be published October 2008 </li></ul><ul><li>Analysis of 114 vendors generating revenue from open source software </li></ul><ul><li>Includes analysis of: </li></ul><ul><ul><li>license choice </li></ul></ul><ul><ul><li>development model </li></ul></ul><ul><ul><li>licensing strategy </li></ul></ul><ul><ul><li>revenue trigger </li></ul></ul>
  10. 10. 451 Group research findings <ul><li>Software as a Service </li></ul><ul><ul><li>Used by 16.0% of all open source vendors </li></ul></ul><ul><ul><li>5.3% as primary revenue source </li></ul></ul><ul><ul><li>6.2% as secondary revenue source </li></ul></ul><ul><ul><li>11.4% as tertiary revenue source </li></ul></ul><ul><li>Responsible for 40-50% of revenue, on average, for those vendors </li></ul><ul><li>Expected to rise to the high end of that scale by 2010 </li></ul>
  11. 11. Strengths and weaknesses: open source <ul><li>Strengths </li></ul><ul><ul><li>Lowers development and distribution costs </li></ul></ul><ul><ul><li>Lowers barriers to adoption - try before you buy </li></ul></ul><ul><ul><li>Avoid lock-in </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Requires trust in licensing model </li></ul></ul><ul><ul><li>What is the commercial value-add? </li></ul></ul><ul><ul><li>Requires in-house skills/vendor support </li></ul></ul>
  12. 12. Strengths and weaknesses: SaaS <ul><li>Strengths </li></ul><ul><ul><li>Lowers barriers to adoption – no licensing </li></ul></ul><ul><ul><li>Clear demonstration of value – pay as you go </li></ul></ul><ul><ul><li>Lowers infrastructure and support costs </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Requires trust in SaaS model </li></ul></ul><ul><ul><li>Marketing and sales costs </li></ul></ul><ul><ul><li>Risk of lock-in </li></ul></ul>
  13. 13. Best of both worlds? <ul><li>Open source software </li></ul><ul><ul><li>Lowers development and distribution costs </li></ul></ul><ul><ul><li>Lowers barriers to adoption - try before you buy </li></ul></ul><ul><ul><li>Avoid lock-in </li></ul></ul><ul><ul><li>Requires trust in licensing model </li></ul></ul><ul><ul><li>What is the commercial value-add? </li></ul></ul><ul><ul><li>Requires in-house skills/vendor support </li></ul></ul><ul><li>Software as a Service </li></ul><ul><ul><li>Marketing and sales costs </li></ul></ul><ul><ul><li>Requires trust in SaaS model </li></ul></ul><ul><ul><li>Risk of lock-in </li></ul></ul><ul><ul><li>Lowers barriers to adoption – no licensing </li></ul></ul><ul><ul><li>Clear demonstration of value – pay as you go </li></ul></ul><ul><ul><li>Lowers infrastructure and support costs </li></ul></ul>
  14. 14. Q&A <ul><li>Matthew Aslett </li></ul><ul><li>Analyst, Enterprise Software </li></ul><ul><li>[email_address] </li></ul><ul><li>+44.207.299.7753 </li></ul><ul><li>http://blogs.the451group.com/opensource/ </li></ul><ul><li>China Martens </li></ul><ul><li>Senior Analyst, Enterprise Software </li></ul><ul><li>[email_address] </li></ul><ul><li>+1.617.261.0691 </li></ul><ul><li> </li></ul>

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