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The convergence of open source and SaaS

The convergence of open source and SaaS

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451 Sugarcrm Aslett Presentation Transcript

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