2010 Future of Open Source Survey Results

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The results of North Bridge Venture Partners 2010 Future of Open Source survey were released at the Computerworld Open Source Business Conference. Michael Skok led a panel discussion on the topic with Dries Buytaert from Acquia, Jim Whitehurst from Red Hat, Tim Yeaton from Black Duck Software and Larry Augustin from SugarCRM.

Technology News & Politics

4TH Annual Leadership Keynote Michael Skok

Dries Buytaert CTO & Co-Founder Jim Whitehurst President & CEO Michael Skok General Partner Tim Yeaton President & CEO Larry Augustin CEO March 17, 2010 2

Agenda March 17, 2010 3 Survey! You! Industry Industry Investment Investment Direction Direction

March 17, 2010 5 Who Took the 2010 Survey?

Record response 435 551 2009 2010 March 17, 2010 6

Survey Respondents 2 4 5 8 % % Vendors Non-Vendors March 17, 2010 7

Survey Respondents Titles Vendors Non-Vendors March 17, 2010 8

What You Asked For… Which sectors are susceptible to disruption? What are the barriers for Open Source? What business strategies create value? 3/17/10 9 242 206 181

Agenda March 17, 2010 10 Survey! You! Industry Industry Investment Investment Direction Direction

Is a Turbulent Economy Goodor Bad for Open Source? March 17, 2010 11

What Makes OSS Attractive? 2010 2009 2008 March 17, 2010 12

Drivers of OSS Tipping Point Private Sector Adoption Public Sector Adoption Other Economic Downturn Past Experience With OSS March 17, 2010 13

Top 3 Barriers to OSS selection Unfamiliarity with open source solutions Lack of internal technical skills Lack of formal commercial vendor support March 17, 2010 15 1 2 3

Sectors to be Disrupted by OSS Over the Next 5 Years March 17, 2010 17 MOST Susceptible to Disruption Database 242 WCM/CMS/Social Software OperatingSystems ERP/CRM Security tools Office Productivity LEAST Susceptible to Disruption

Sectors to be Disrupted by OSS Over the Next 5 Years March 17, 2010 18 MOST Susceptible to Disruption Database 242 WCM/CMS/Social Software OperatingSystems OfficeProductivity Office Productivity ERP/CRM Security tools LEAST Susceptible to Disruption

OSS Component Impact on the Complexity of Managing Apps Less More 2009 Same 2010 March 17, 2010 19

March 17, 2010 20 So, what ARE you doing with OSS?

Your Use of OSS Vendors Non-Vendors March 17, 2010 21

VENDOR Revenue Generation March 17, 2010 22

Strategies to create value 2010 2009 March 17, 2010 23 Which business strategies will create the most value for OSS Vendors ? 181

Impact on OSS Vendors? March 17, 2010 24 SaaS VirtualizedInfrastructure CloudComputing

Up & Coming OSS Companies March 17, 2010 26 2009 2010

Agenda March 17, 2010 27 Industry Industry Investment Investment Direction Direction

Magic Numbers 3/17/10 28 Dollars Invested DealsDone $4.3B M&A 37% 20% 12 1.2 OverallExists 66 12 $375M

Agenda March 17, 2010 29 Industry Industry Investment Investment Direction Direction

TODAY: How much OSS is Deployed in Your Organization March 17, 2010 31 0%- 25% 25% -50% 75%-100% 50%-75% % of IT Deployment which is OSS

IN 5 YEARS: What % of Software Purchases Will be OSS? March 17, 2010 32 50% or more on OSS 2010-2015 2009-2014 2008-2013

Agenda March 17, 2010 33 Survey! You! Industry Industry Investment Investment Direction Direction

Summary Tipping point New sectors Innovation But… 3/17/10 34

Die Free? Open Source barriers: See Try Buy Fly Die Skills? Visibility? Unfamiliarity Value add? Solo? Vendor support Free?

Die Free or Live Open? Commercial Open Source v2.0: Virtuous Cycle of open innovation Live Open Managed Supported … as a Service On demand Self service Friction free Marketplace Open Source barriers: See Try Buy Fly Die Skills? Visibility? Unfamiliarity Value add? Solo? Vendor support Free?

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2010 Future of Open Source study; presented at InfoWorld Open Source Business Conference Keynote Panel: Jim Whitehurst, President & CEO Red Hat, Larry Augustin, CEO, SugarCRM, Tim Yeaton, President & CEO Black Duck; Dries Buytaert, Founder & CTO, Acquia. The panel was chaired by North Bridge. The study, collected from over 550 respondents including both vendors and non-vendors, highlight a range of significant issues continuing to impact the open source software landscape. Economic conditions, key market drivers and forecast for the coming year are among the topics taking center stage.

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2010 Future of Open Source Survey Results

1. 4TH Annual Leadership Keynote Michael Skok

2. Dries Buytaert CTO & Co-Founder Jim Whitehurst President & CEO Michael Skok General Partner Tim Yeaton President & CEO Larry Augustin CEO March 17, 2010 2

3. Agenda March 17, 2010 3 Survey! You! Industry Industry Investment Investment Direction Direction

4. 3/17/10 4

5. March 17, 2010 5 Who Took the 2010 Survey?

6. Record response 435 551 2009 2010 March 17, 2010 6

7. Survey Respondents 2 4 5 8 % % Vendors Non-Vendors March 17, 2010 7

8. Survey Respondents Titles Vendors Non-Vendors March 17, 2010 8

9. What You Asked For… Which sectors are susceptible to disruption? What are the barriers for Open Source? What business strategies create value? 3/17/10 9 242 206 181

10. Agenda March 17, 2010 10 Survey! You! Industry Industry Investment Investment Direction Direction

11. Is a Turbulent Economy Goodor Bad for Open Source? March 17, 2010 11

12. What Makes OSS Attractive? 2010 2009 2008 March 17, 2010 12

13. Drivers of OSS Tipping Point Private Sector Adoption Public Sector Adoption Other Economic Downturn Past Experience With OSS March 17, 2010 13

14. March 17, 2010 14 Barriers to OSS? 206

15. Top 3 Barriers to OSS selection Unfamiliarity with open source solutions Lack of internal technical skills Lack of formal commercial vendor support March 17, 2010 15 1 2 3

16. March 17, 2010 16 IMPACT of Open Source

17. Sectors to be Disrupted by OSS Over the Next 5 Years March 17, 2010 17 MOST Susceptible to Disruption Database 242 WCM/CMS/Social Software OperatingSystems ERP/CRM Security tools Office Productivity LEAST Susceptible to Disruption

18. Sectors to be Disrupted by OSS Over the Next 5 Years March 17, 2010 18 MOST Susceptible to Disruption Database 242 WCM/CMS/Social Software OperatingSystems OfficeProductivity Office Productivity ERP/CRM Security tools LEAST Susceptible to Disruption

19. OSS Component Impact on the Complexity of Managing Apps Less More 2009 Same 2010 March 17, 2010 19

20. March 17, 2010 20 So, what ARE you doing with OSS?

21. Your Use of OSS Vendors Non-Vendors March 17, 2010 21

22. VENDOR Revenue Generation March 17, 2010 22

23. Strategies to create value 2010 2009 March 17, 2010 23 Which business strategies will create the most value for OSS Vendors ? 181

24. Impact on OSS Vendors? March 17, 2010 24 SaaS VirtualizedInfrastructure CloudComputing

25. Cool OSS Projects! March 17, 2010 25

26. Up & Coming OSS Companies March 17, 2010 26 2009 2010

27. Agenda March 17, 2010 27 Industry Industry Investment Investment Direction Direction

28. Magic Numbers 3/17/10 28 Dollars Invested DealsDone $4.3B M&A 37% 20% 12 1.2 OverallExists 66 12 $375M

29. Agenda March 17, 2010 29 Industry Industry Investment Investment Direction Direction

30. Direction? 3/17/10 30 OPEN

31. TODAY: How much OSS is Deployed in Your Organization March 17, 2010 31 0%- 25% 25% -50% 75%-100% 50%-75% % of IT Deployment which is OSS

32. IN 5 YEARS: What % of Software Purchases Will be OSS? March 17, 2010 32 50% or more on OSS 2010-2015 2009-2014 2008-2013

33. Agenda March 17, 2010 33 Survey! You! Industry Industry Investment Investment Direction Direction

34. Summary Tipping point New sectors Innovation But… 3/17/10 34

35. Traditional cycle See Try Buy Fly Die

36. Die Free? Open Source barriers: See Try Buy Fly Die Skills? Visibility? Unfamiliarity Value add? Solo? Vendor support Free?

37. Die Free or Live Open? Commercial Open Source v2.0: Virtuous Cycle of open innovation Live Open Managed Supported … as a Service On demand Self service Friction free Marketplace Open Source barriers: See Try Buy Fly Die Skills? Visibility? Unfamiliarity Value add? Solo? Vendor support Free?

38. March 17, 2010 38 tinyurl.com/FOOS2010

Editor's Notes

• Larry Augustin, CEO, SugarCRM• Dries Buytaert, CTO & Co-Founder, Acquia• Jim Whitehurst, CEO, Red Hat• Tim Yeaton, CEO & President, Black Duck Software
Demographic Overview
Demographic Overview – First Year we segregated user & VENDOR responses – thanks to feedback from collaborators, especially Andrew Aitken of Olliance GroupNote that user/VENDOR perceptions were not all that different on many issues; industry is aligned
Demographics
Transition to “Drivers”Michael: Refer to 451 Group CAOS survey which further validates this
This question was added based on collaborator input. Andrew Aitken of the Olliance Group very interested in Public Sector AdoptionPossible Panel Q’s…..Dries: Acquia’s present experience with GovernmentTim O’Reilly: Dedicated to Gov 2.0Larry: customers we can't mentionJim: Business unit the size of Europe doing Federal work. NSA wrote SELinux security regime; international adoption is huge
Michael: Discuss rPath’s experienceTim Yeaton: CommentAll: For people just now taking advance of OS, it seems complex, but not for the last wave
Tim Yeaton: Will comment on trending of component use as a % of component baseLarry: SugarCRM is being used as platform for application buildingWhich best describes your organization's use of open source software?
Larry Augustin: SugarCRM - Topic – Biggest Revenue Generating Opportunities/TrendsDries Buytaert: Acquia – Comment on the commercialization of Drupal – differences pre& post commercialization via Acquia
Transition to “Company” section of presentation
Here we can see how much OSS has been deployed within respondent’s IT deployments; from none to 25%, 25% to half, etc. What’s great is that the biggest percentage of those who took the survey have between 75-100% of OSS deployed. And we can see a trend of those from 25% to 75% increasing. The big opportunity for everyone here is there is getting everyone in the first column to move to the right over the next year.
Tim: Will look at research & take a swath of customers & discuss deployment
Open Source can be a win win win Customers need visibility and supportCommercial Vendors can deliverCommunity benefits by adoptionVC investment more discerningbut selectively available
North Bridge would like to thank our panel and a special thanks to our collaborators and YOU our participants

2010 Future of Open Source Survey Results

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Editor's Notes