In today’s enterprises, IT takes center stage in an organization’s business model. They consist of interrelated architectural, co-operational and financial arrangements designed and developed to achieve its strategic goals and objectives. The products and/or services the organization offers, or will offer, are based on the arrangements that are built on the IT infrastructure. Open source software (OSS) is capable of bringing down average IT expenditure of companies. Cost reduction isn’t only about spending less on software licenses but also about increased efficiency in an organization’s IT setup. For example, the real value is higher, mainly because reused OSS code tends to be of higher quality when compared with equivalent proprietary. In this session, we will discuss the economic value of open source middleware for achieving the objectives set forth by the new IT business models.

1. Impact of Open Source
Samisa Abeysinghe
Vice President Delivery
WSO2

2. Why use Open Source?
• Build an echo-system around products and services
• Grow your user communiDes
• Cost advantage…
• Quality advantage!

3. Just beJer soKware isn’t enough to
transform an industry.

4. Cost vs Other Benefits
• Most assume OSS to be cheap
• It is not just about financial value
• Culture
– Is what OSS is all about
– Community driven with respect and ethics being the corner
stones
• Results in quality and security aspects
• Foster innovaDon

5. Open Source as engineering process
• Model for effecDve massively-distributed
collaboraDon
• Leverages extensive base plaWorm of technologies
• WriJen with sharing and reusability as fundamentals
• Slashes feedback cycle (beJer fit)
• Accelerates release cycle (faster evoluDon)
• Crowd-sourced quality control (many eyeballs
improves security)

6. Open Source as an OrganizaDonal Model
• Convergence of the technical problem – fit, quality,
support
• Breaks down siloed department thinking
• InsDlls shared responsibility for saDsfacDon – enabled
flaJer org structures
• Distributed governance and meritocracy pracDces
propagate throughout the business

7. Economic Value of OSS
Labor
Economics
• ResulDng
from
personal
graDficaDon
and
reputaDon
Direct cost
savings
• Improved
pricing
flexibility
Efficiency
• Technically
• Strategically
• Socially
Control over
cost
• Get the right
and quick
responses

8. Open Source as a Customer Value
• Ease of AdopDon
- Permission-less, for any purpose
- Amenable to prototyping, failing-fast, iteraDng, evolving
- Fully transparent
- Standard legal terms (minimize review burden)
- Transcends corporate history and stability (escrow)
• Cost effecDve
- DramaDc downward pressure on prices
- Allows Dme/money tradeoffs

9. IT SoluDons
Services
SoKware
Hardware
• What have you got to
pay for?
• OSS drives down
soKware costs
– Lower overall
project cost

10. Project Economics with OSS

11. Value ProposiDon
• Since soKware costs go down with OSS
– More room for services
– Can provide beJer quality services
– More value to the whole project
• Faster ROI
• Broader value proposiDon

12. Integrated Stacks
• Saves integraDon Dme and component costs when
OSS used
• Replace some parts with OSS if not all to lower the
total cost
• When you sell the soluDon to other BUs the demand
can rise if your price is low
– Puts more price sensiDve customers within reach
• Quality of OSS
– SaDsfied customers

13. Lower Learning/Training Costs
OSS
Availability
Advantage
Download
and play
Explore and
innovate
around usage
Community
to help
Contribute
back

14. OpportuniDes
• Break the barrier to entry
– Try out the new projects/pilot projects with OSS for free
• Move on or throw away decision based on success
• Risk is less even if you fail
– Provision, maintenance and support will cost
• but later
• when the project is up and running

15. Open Source as a RelaDonship Equalizer
• Technology becomes a shared resource –
contribuDon, parDcipaDon, evoluDon
• Reduces informaDon asymmetry, cuts out the
middleman
• Encourages collaboraDon, educaDon
• Maintain constant demonstraDon of clear and
present value (the lock-in problem)

16. Open Source as a RecruiDng Vehicle
• AJracts and retains top talent
• Widely used in educaDonal insDtuDons and research
projects
• Extends community beyond corporate boundaries

17. Contribute and Influence
CommiJers
Contrib
utors
Users Benefits
• Faster fixes
• Strategy alignment
• Employee
aJracDveness
• Visibility in the
community

18. Open Source as a Brand
• “Open Source” brand is on par with established
brands (IBM, Oracle)
• Introduces a wave of disrupDon for innovaDve
vendors
• Brand strength reflected by a preference for OSS in
many kinds of organizaDons (private, governmental,
non-profit)

19. Open Source is becoming “the default”
Future of Open Source Survey 2015:
• 78% of respondents said their companies run part or all of
its operaDons on OSS
• 66% said they take an open source-first approach to
soKware
• 64% of companies currently parDcipate in open source
projects
• 55% believe open source delivers superior security
compared to proprietary soluDons
hJps://www.blackducksoKware.com/resources/webinar/2015-future-open-source-
survey-results

20. What are customers doing?
• Developing OSS Policies
– Don’t preclude OSS – it may be the best or only soluDon
– Include OSS in evaluaDon matrix
– Establish a preference for OS
– Mandate OSS
– Contribute to OSS
• Develop a transiDon strategy
– All new projects on OSS
• Work with vendors in a collaboraDve way throughout a
project – architecture, development, deployment

21. Conclusion
• Control over cost
• Overall project success
• Efficiency
• Quality
• Influence

22. Thank You