WSO2Con USA 2015: New IT Business Models and Open Source Middleware Economic Value

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In today’s enterprises, IT takes a 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.

Technology

New
IT
Business
Models
and

Open
Source
Middleware

Economic
Value

Samisa
Abeysinghe

Vice
President
Delivery

WSO2

Why
use
Open
Source?

•  Build
an
echo-‐system
around
products
and
services

•  Grow
your
user
communiGes

•  Cost
advantage?

•  Quality
advantage!

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
innovaGon

Economic
Value
of
OSS

Labor

Economics

• ResulGng

from

personal

graGﬁcaGon

and

reputaGon

Direct
cost

savings

• Improved

pricing

ﬂexibility

Eﬃciency

• Technically

• Strategically

• Socially

Control
over

cost

• Get
the
right

and
quick

responses

IT
SoluGons

Services

SoWware

Hardware

•  What
have
you
got
to

pay
for?

•  OSS
drives
down

soWware
costs

–  Lower
overall

project
cost

Project
Economics
with
OSS

0

20

40

60

80

100

Project
1
Project
2
Project
3

Services

SoWware

Hardware

Value
ProposiGon

•  Since
soWware
costs
go
down
with
OSS

–  More
room
for
services

–  Can
provide
be_er
quality
services

–  More
value
to
the
whole
project

•  Faster
ROI

•  Broader
value
proposiGon

Integrated
Stacks

•  Saves
integraGon
Gme
and
component
costs
when

OSS
used

•  Replace
some
parts
with
OSS
if
not
all
to
lower
the

total
cost

•  When
you
sell
the
soluGon
to
other
BUs
the
demand

can
rise
if
your
price
is
low

–  Puts
more
price
sensiGve
customers
within
reach

•  Quality
of
OSS

–  SaGsﬁed
customers

Lower
Learning/Training
Costs

OSS

Availability

Advantage

Download

and
play

Explore
and

innovate

around
usage

Community

to
help

Contribute

back

OpportuniGes

•  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

Contribute
and
Inﬂuence

Commi_ers

Contrib
utors

Users
Beneﬁts

•  Faster
ﬁxes

•  Strategy
alignment

•  Employee

a_racGveness

•  Visibility
in
the

community

Conclusion

•  Control
over
cost

•  Overall
project
success

•  Eﬃciency

•  Quality

•  Inﬂuence

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WSO2Con USA 2015: New IT Business Models and Open Source Middleware Economic Value

1. New IT Business Models and Open Source Middleware Economic Value Samisa Abeysinghe Vice President Delivery WSO2

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

3. 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 innovaGon

4. Economic Value of OSS Labor Economics • ResulGng from personal graGficaGon and reputaGon Direct cost savings • Improved pricing flexibility Efficiency • Technically • Strategically • Socially Control over cost • Get the right and quick responses

5. IT SoluGons Services SoWware Hardware •  What have you got to pay for? •  OSS drives down soWware costs –  Lower overall project cost

6. Project Economics with OSS 0 20 40 60 80 100 Project 1 Project 2 Project 3 Services SoWware Hardware

7. Value ProposiGon •  Since soWware costs go down with OSS –  More room for services –  Can provide be_er quality services –  More value to the whole project •  Faster ROI •  Broader value proposiGon

8. Integrated Stacks •  Saves integraGon Gme and component costs when OSS used •  Replace some parts with OSS if not all to lower the total cost •  When you sell the soluGon to other BUs the demand can rise if your price is low –  Puts more price sensiGve customers within reach •  Quality of OSS –  SaGsﬁed customers

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

10. OpportuniGes •  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

11. Contribute and Influence Commi_ers Contrib utors Users Benefits •  Faster fixes •  Strategy alignment •  Employee a_racGveness •  Visibility in the community

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

13. Thank You

WSO2Con USA 2015: New IT Business Models and Open Source Middleware Economic Value

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