Monday, June 17, 2024

The State of Open Source Business

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Open source business is gaining momentum and is no longer dominated by the
discussion about how to make money. At least that’s the view of Open Source
Business Conference (OSBC) organizer Matt Asay who now thinks that open
source has crossed the proverbial chasm.

“The issue is now how do you adopt and get the most out of open source and
less about how you monetize open source,” Asay said on a conference call
discussing the latest trends in open source business.

Asay noted that there has been $2 billion in open source investments since
1997, and he cited research that reported that high-quality open source
software would cost $16 billion to replicate.

He said end-user enterprises are realizing that they can invest a little bit of money into open source and get a lot out of it. In his view enterprises are not choosing open source for the “religion” but rather for the benefits.

Though Asay sees open source monetization as being less of an issue now than
in previous years, money still remains a large issue for open source vendors
and, more importantly, for users.

451 Group analyst Jay Lyman told listeners on the call that, according to a
survey conducted by 451 Group of 100 end user organizations, the No. 1 reason for choosing an open source solution is cost, cited by 43 percent of

The No. 2 reason from 21 percent of the respondents was reduced
dependence on vendors. Eighteen percent indicated
that flexibility was their reason for going with open source. On the low end
only 6 percent cited performance as a reason why they chose open source, 4
percent noted security and a paltry 2 percent noted that reliability was
their reason for choosing open source.

In another study conducted by 451 Group of over 30 proprietary vendors who
have done some amount of open source activity, Layman reported that the
primary reason for the vendors to go open source was competitive forces,
cited by 25.8 percent of respondents. The number two reason was first mover
advantage at 22.6 percent.

The most surprising aspect of the findings according to Layman was the
number three reason- customer demand, which was noted by 19.4 percent.
Layman said that it was a surprise to him to see that level of influence
from customers.

Andrew Aiken, managing partner at open source management consulting firm
Olliance Group, added further fuel to the fire of how business thinks about open

Aiken relayed findings from the recent open source think tank conference, which 102 leading open source business experts representing 81 companies from around the world attended. Among those findings is the fact that
there is a resource-constraint issue with open source due to increasing
demand and limited supply of skilled professionals.

Participants in the
think tank also noted that there are concerns about a lack of commercially
available support for certain open source efforts.

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