Open Source: From a Movement to a Market


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  • 22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved<number>22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved<number>
  • Thank you Patrick for that introduction. A warm thank you to Senator Lundy for her perspectives on Open Source in Australia – an area I know she has watched with interest.My role in today’s event is simple – to provide an overarching context for the remainder of today’s sessions by sharing with you our analysis of the Open Source market. To do that I’m going to explore the journey of Open Source from a movement to market.The state of adoption of Open Source in Australia – a trend that is increasing.Then I’ll touch on some of the many offerings now available from the Open Source market - you’ll be hearing about a few of these today.Lastly, I wouldn’t be an Industry Analyst if I didn’t provide some glimpse into the future Longhaus envisages for Open Source.22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>
  • Open source is now a moniker worn proudly by software and non-software businesses alike. But it has not always been a general purpose term and much has changed since the concept was formerly minted in the 1980s. When we cast our mind back in time what becomes obvious is that Open Source has come of age through a steady evolution – and at Longhaus we have identified four stages of the journey of Open Source.Firstly, in the 1980’s Open Source was born as a movement – with much of the rhetoric focused on “free” software. However, this philosophy of socialist software (for want of a better description) didn’t suit everyone. It is not surprising then that what emerged in the 1990s was the era of Institutionalisation. Open Source foundations were born and with the rise of the internet came the enablement of a community no longer constrained by bulletin boards and university networks. Towards the end of the decade the distinction between the members of the Open Source movement and the wider Open Source community was brought into sharp focus with the establishment of the first for-profit open source companies. This triggered the third wave of change – the commercialisation of Open Source. Initially this began with the donation of intellectual property – benevolent gestures by multi-national corporations aimed at making them appear more “open”. Open Source communities emerged not only for commodity technologies, but solutions for real business problems that found a ready market in the ever expanding online population.But what truly defines for me the reaching of maturity of Open Source and its ascendence to market status has been the last 8 years. We’ve seen legal battles over IP, patent deals, increased venture capital activity. Every combination and permutation of corporate behaviour executed by for profit and non-profit organisations alike under the banner of Open Source.These behaviours have resulted in Open Source exhibiting all the signs of a traditional market…22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>
  • And it is through understanding the structure of the market that it becomes easier to grasp what you – as a consumer – can expect from the participants in the market. In this case, the Open Source market.Firstly, we have the “vendors” or “producers” of Open Source solutions – this is traditionally the communities that engage in the development of the core Open Source products. To ensure that these producers are “playing by the rules” and that consumers can identify Open Source the market contains “regulators” – including the GPL from the GNU Project and the Open Source Initiative’s licensing scheme.The reality is that as with any market the producers are not always in a position to serve the full needs of the consumer. Different consumer segments want different solutions, bundled offerings. Some are not able to participate in the development of Open Source in the same way as the rest of the community, but still want to adopt the Open Source ideals. As a result we have the rise of suppliers, intermediaries who provide these missing elements that the producers don’t or can’t offer.Lastly, there is the supporting organisations like venture capitalists, universities, consultants and trainers. All the roles of a traditional market are alive and well in the world of Open Source.So, as users of ICT we should no longer treat Open Source as special. Different – yes, but special? No. It is a market and like any market there will be astute consumers who can make the most of the offerings and those who fail to gain the full benefits. And based on our research there are plenty of organisations in Australia seeking the benefits of Open Source…22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved6
  • Indeed, since 2006 there has been a 4% increase in the number of organisations actively using open source – with some 20% of Australia’s 7000+ medium to large enterprises employing Open Source solutions. While an additional 5% are now planning a deployment of some form of Open Source in the next 12 months.Interestingly 14% of firms claim they are not going to adopt Open Source, but the reality is this may not be a choice they have. Many of the traditional Closed Source vendors are shedding their own proprietary commodity elements such as application servers, web servers etc. Opting instead to bundle and even support Open Source offerings so they can focus on value added solutions up the stack.Yet the reason for adoption of Open Source may not in fact be what it seems…22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>
  • Unlike the early days of the Open Source movement when the focus was clearly on “free”, the reality of today’s Open Source market means it may be as much about the solution as it is about saving money. Indeed, in our 2008 ICT Spending and Priorities Study we found that as a “cost management” strategy Open Source was not high on the list.That said, it was higher than Software-As-A-Service, which for me reinforces the notion that today’s Open Source solutions are very much about what suits the Enterprise - and there is lots to choose from…22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved9
  • At the Business layer…At the Information layer…For applications both for desktop productivity and enterprise wide….And of course within the Infrastructure where Open Source has its traditional stomping ground…Even within the Network we can find Open Source offering capability of doing the heavy lifting required of Australia’s vast small to medium enterprise market.
  • The net result of the increasing adoption and availability of solution across the entire stack means there is definitely money begin made. If we take our forecast of the Australian software industry’s estimated revenue for 2007-2008 of $3.5 billion, then based on the recent AustralianOpen Source Industry & Community Report 2008 from Waugh Partners - Open Source related revenues account for close to 14% of domestic software revenues.This leaves little doubt in my mind that Open Source is a serious proposition. So what does the future hold?22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved<number>
  • Open source is not new and will not go awayIt is a serious commercial propositionChoice remains the key motivator for genesis for open source effortsAbility to make financial gains follows where demand emergesMore and more business level applications are emergingAwareness is still lacking in regards to these solutionsDivesting, consolidation and commoditisation is changing the supply chainTraditional vendors are embracing open source and this will further change the landscapeBy 2012 open source will be a fully integrated dimension of the overall software marketWe will reach an stability in terms of client preferences and origin of production participants – be they traditional or open source providers.Open Source has come a long way in its short history from a philosophy to a dynamic aspect of the ICT industry. As a legitimate market its solutions and offering deserves consideration in every ICT purchasing decision.With that I’ll hand back to Patrick who will over the next few hours introduce you to many of the participants in the Open Source market to present their unique perspectives and solutions. Thanks very much.
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved<number>22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved<number>
  • Open Source: From a Movement to a Market

    1. 1. Open Source: From a Movement to a Market Sam Higgins Research Director Open CeBIT, May 2008 Copyright © 2008 Longhaus Pty Ltd
    2. 2. Who is Longhaus? • Longhaus is a research publisher and • Strong international and technology advisory company with a specialty in research experience technology • Leading industry voice in press and • We publish business reports and media broadsheets advise executives and management across Australia's government, business, and consumer sectors on the application • Queensland founded and headquartered and direction of technology – Website: 5,000+ site visits per month • Our directional research reports are – Website: 12,000+ page visits per month utilised by both SME and major – Website: 7-10 minutes per visit organisations across the world – Blog: 3,000+ hits – Newsletter: 2,500+ distribution per month • Through our AAA (Access All Areas) – Downloads: 1,000+ per month advisory service we answer big business – 8,400+ SlideShare visits questions that most often pertain to customer, product or services markets – strong focus on government 2
    3. 3. Research Focus 3 Copyright © 2008 Longhaus Pty Ltd
    4. 4. Outline • The open source journey from a movement to a market • Australia’s increasing adoption of open source • Understanding the breadth of open source market offerings • What the future holds for open source 4 Copyright © 2008 Longhaus Pty Ltd
    5. 5. Open Source has undergone tremendous change 1980s Early 1990s Late1990s 2000’s • Minix “with • Open Source • PHP • Open Office code” Foundations Mainstream • Legal • Free • Apache #1 • Sun Donates Challenges Software Web Server Tomcat • Patent Deals Foundation • Open Source • IBM Donates • Increased VC • Perl for Unix Companies XML Activity • GNU Technologies • MySQL • Mergers Released • Open Source • Acquisitions Business • Divestitures Applications • Vendor Alliances 5 Copyright © 2008 Longhaus Pty Ltd
    6. 6. As a result Open Source now has the hallmarks of a traditional industry Control (Regulators) Production Distribution Consumption (Vendors) (Suppliers) (Clients) Harvard estimates $2.6 Billion invested by Vendors and Support (Enablers) VCs in OSS since ‘95 Source: Harvard Business School ( 6 Copyright © 2008 Longhaus Pty Ltd
    7. 7. Australian firms are recognising the opportunity and adoption is increasing 7 Copyright © 2008 Longhaus Pty Ltd
    8. 8. But Open Source is not seen as a major cost saver – it is about choice and freedom • Longhaus observe firms using 25 typical cost management strategies – E.g. Use of virtualisation – E.g. Hardware consolidation and rationalisation – E.g. Software-as-a-Service etc • As a cost management strategy open source software: – Ranked 18th out of 25 in terms of high priority – Ranked 20th out of 25 in terms of medium priority • Australian Enterprises viewed open source as a more critical cost management strategy in 2008 than SaaS 8 Copyright © 2008 Longhaus Pty Ltd
    9. 9. Why? Open Source offers something for every layer of the enterprise •Business Process Management - jBPM and Intalio BPMS, Project Agila Business •Document / Records Management - xinco DMS •Content Management - Joomla, Drupal, Word Press, Mambo, MySource Matrix, Plone •Search - Lucerne, UIMA, Beagle Information •Browsers - Firefox, Opera, Mozilla •Desktop - OpenOffice, Open Workbench, GIMP •Email and Collaboration - Jabber, Ekiga, Evolution, Thunderbird, ICECore Applications •Business - SugarCRM, TinyERP, Compiere, OsCommerce •Development Platforms - Java, PHP, Eclipse, Perl •Web and application servers - Apache, JBoss, Infrastructure Tomcat, Zope •Databases - MySQL, PostgreSQL, Ingres •Operating Systems – Linux, TinyOS, OpenSolaris •Voice - Asterisk Connectivity •Network Management - OpenNMS, Nagios •Directories - OpenLDAP, OpenDS 9 Copyright © 2008 Longhaus Pty Ltd Source: Longhaus The Smart State Outsources Open Source, Study, April 2007
    10. 10. Making Open Source a serious contributor to Australia’s $3.5B software industry 10 Copyright © 2008 Longhaus Pty Ltd
    11. 11. What does the future hold for Open Source? • Open source is not new and will not go away • Choice remains the key motivator for genesis for open source efforts, but money soon follows • More and more business level applications continue to emerge • Divesting, consolidation and commoditisation is changing the supply chain to include more traditional vendors • By 2012 open source will be a fully integrated dimension of the overall software market 11 Copyright © 2008 Longhaus Pty Ltd
    12. 12. Selected Longhaus source material • Open Source Industry Analysis, Longview, April 2007 • The Smart State Outsources Open Source, Study, April 2007 • Open Source Industry Analysis, Briefing Note, May 2007 • From a movement to a market – the changing face of open source software, Longview, July 2007 • IT Spending and Priorities Study 2008, February 2008 12 Copyright © 2008 Longhaus Pty Ltd
    13. 13. Thank you Longhaus Head Office Sam Higgins Level 30, AMP Place Research Director 10 Eagle Street Brisbane QLD 4000 +61 412 621 014 Longhaus Research Centre 7/269 Abbotsford Road Bowen Hills QLD 4006 p: +61 7 3868 4796 f: +61 7 3303 8445 13 Copyright © 2008 Longhaus Pty Ltd