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2011 North Bridge Future of Open Source Study

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2011 North Bridge Future of Open Source Study

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2011 Future of Open Source study; presented at InfoWorld Open Source Business Conference Keynote Panel: Tom Erickson, CEO, Acquia; Adrian Kunzle, Managing Director, Head of Firmwide Engineering & Architecture, JP Morgan; Mike Olson, CEO, Cloudera; Jim Whitehurst, President & CEO, RedHat. The panel was chaired by North Bridge. More than 450 respondents took part in the 2011 survey, including representatives from both the vendor and non-vendor communities. Respondents were asked about a wide range of issues impacting the open source software (OSS) landscape, including: economic impact on OSS, key drivers and barricades for OSS adoption, and suggestions for building and maintaining a profitable OSS business model.

For the first time, supporting the fact that open source has truly gone mainstream, end users accounted for 60 percent of the survey respondents and the quality of responses continues to increase, spreading across all levels of IT management from developers to a large number of C-level executives. Respondents have identified SaaS, cloud and mobile as the main areas that will have a dramatic impact on open source and that are driving growth.
The open source customers are now more focused on maturing technology issues, including improved operational excellence around areas such as support, product management, feature functionality and return on investment. This is in contrast to earlier years where the survey had pointed to things such as the legal implications of licensing and conforming to internal policies.
 56 percent of respondents believe that more than half of software purchases made in the next five years will be open source.
 95 percent of respondents noted that a turbulent economy continues to be “good” for OSS, though for the first year ever, lower cost has been overtaken by freedom from vendor lock-in as what makes OSS more attractive.
 When asked about revenue generating strategies likely to create value for vendors, 56% of the respondents said that an annual, repeatable support and service agreement was the most likely.

2011 Future of Open Source study; presented at InfoWorld Open Source Business Conference Keynote Panel: Tom Erickson, CEO, Acquia; Adrian Kunzle, Managing Director, Head of Firmwide Engineering & Architecture, JP Morgan; Mike Olson, CEO, Cloudera; Jim Whitehurst, President & CEO, RedHat. The panel was chaired by North Bridge. More than 450 respondents took part in the 2011 survey, including representatives from both the vendor and non-vendor communities. Respondents were asked about a wide range of issues impacting the open source software (OSS) landscape, including: economic impact on OSS, key drivers and barricades for OSS adoption, and suggestions for building and maintaining a profitable OSS business model.

For the first time, supporting the fact that open source has truly gone mainstream, end users accounted for 60 percent of the survey respondents and the quality of responses continues to increase, spreading across all levels of IT management from developers to a large number of C-level executives. Respondents have identified SaaS, cloud and mobile as the main areas that will have a dramatic impact on open source and that are driving growth.
The open source customers are now more focused on maturing technology issues, including improved operational excellence around areas such as support, product management, feature functionality and return on investment. This is in contrast to earlier years where the survey had pointed to things such as the legal implications of licensing and conforming to internal policies.
 56 percent of respondents believe that more than half of software purchases made in the next five years will be open source.
 95 percent of respondents noted that a turbulent economy continues to be “good” for OSS, though for the first year ever, lower cost has been overtaken by freedom from vendor lock-in as what makes OSS more attractive.
 When asked about revenue generating strategies likely to create value for vendors, 56% of the respondents said that an annual, repeatable support and service agreement was the most likely.

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2011 North Bridge Future of Open Source Study

  1. 1. Future of Open Source 5TH Annual Leadership Keynote
  2. 2. The Panel 2 Jim Whitehurst President & CEO Mike Olson CEO Michael Skok General Partner Tom Erickson CEO Adrian Kunzle Managing Director
  3. 3. Agenda 3 Industry Impact Direction Investment
  4. 4. Collaborators 4
  5. 5. 5 Who we heard from. (you!)
  6. 6. Survey Response 6
  7. 7. Survey Respondents 7 Vendors Non-Vendors %%
  8. 8. Survey Respondent’s Titles 8
  9. 9. 9 FutureOpensource.net
  10. 10. Agenda 10 Industry Impact Direction Investment
  11. 11. Backdrop 11 Turbulent economy
  12. 12. Get Out the Vote! 12 66937 Is a turbulent economy good (goodfor) or bad (badfor) for Open Source?
  13. 13. Is a Turbulent Economy Good or Bad for Open Source? 13 0% 20% 40% 60% 80% 100% Good Bad 2009 2010 2011
  14. 14. LIVE Vote! Txt Your Vote to 66937 15 What makes Open Source software most attractive? “quality”Better Quality Software…. Lower Acquisition Costs… “lower” Abundance of Code…..…. “abundance” Flexibility…………............. “flexibility” Rapid Pace of Innovation.. “rapid” Superior Security…………. “superior” Vendor Freedom……….... “vendor”
  15. 15. What Makes OSS Attractive? 16 Lower costs Freedom from VENDOR Lock-in Access to code libraries Lower costs Superior security Freedom from VENDOR lock-in Lower costs Freedom from VENDOR lock-in Rapid pace of innovation 2008 2009 2010 2011 Freedom from VENDOR lock-in Lower costs Flexibility
  16. 16. 18% 15% 15% 15% 14% 13% 7% 3% Tipping Point – What’s Driving Adoption? 18 Vendor Lock-in Economic Downturn Public Sector Adoption Private Sector Adoption OSS Experience Quality Other Mobility
  17. 17. Top Barriers to OSS Selection 20 Lack of internal technical skills Unfamiliarity with open source solutions Lack of formal commercial vendor support 126 122 98 responses 84 65 Legal concerns about licensing Does not conform to internal policies
  18. 18. What Sectors will be Disrupted by OSS Over the Next 5 Years? 22 Mobile OS DatabaseMOST LEASTERP/CRM Office Productivity Business Intelligence
  19. 19. How is the use of OSS Components impacting the Manageability of Applications? 24 More Less None 29% 24% 47%
  20. 20. 26% 20% 14% 15% 17% 8% Top Vendor Revenue Sources Today 26 Custom Development Support Subscriptions Ad-hoc Support “Closed-source” Licensing Value-add Subscriptions Other 17% 25% 7% 20% 18% 9% 4% + 2 Years Advertisements
  21. 21. LIVE Vote! Txt Your Vote to 66937 29 Which of the following will have the greatest impact on software delivery for OS vendors? “software”Software-as-a-Service....... Mobile Devices………….... “devices” Private Clouds……………. “private” Public Cloud Computing.... “computing” App Stores………………... “stores”
  22. 22. Impact on OSS Vendors? 31 SaaS Private Cloud Public Cloud App Stores Mobile Devices
  23. 23. Cool OSS Projects mentioned… 32
  24. 24. 2009 Top 5 up & coming OSS Companies 35 2010 2011
  25. 25. Agenda 36 Industry Impact Direction Investment
  26. 26. 22% 72% 2.7% 24% OSS Investment – by the numbers 37 2009 Dollars Invested Deals Completed Ave Deal Size Seed, Series A $375M 73 $5.7M $65M $466M 71 $7.0M $112M
  27. 27. Agenda 39 Industry Impact Direction Investment
  28. 28. 96 67 62 75 42 94 89 85 OSS Deployed in Your Organization 40 75%-100% 50%-75% 25% -50% 0%- 25% Percentage of OSS is Deployed Responses Today In 5 Yrs
  29. 29. IN 5 YEARS: What % of Software Purchases Will be OSS? 42 2015 2014 50% or more on OSS 2016 2013
  30. 30. Wrap-up: The Open Source Path 43
  31. 31. OSS is Mainstream… 44 Private Sector Adoption Lower Costs Growing Investments Avoid Vendor Lock-In Public Sector Adoption Higher Quality
  32. 32. … But Not Yet Mature! 45  Internal technical skills  Unfamiliarity  Vendor support
  33. 33. Watch for Path Traps 46  Innovation vs. bloat  Maintenance costs  DevOps
  34. 34. Opportunities! 47 Big Data Mobile Cloud
  35. 35. 49 http://www.northbridge.com /open-source
  36. 36. A big thank you from North Bridge to… 50

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