Feb 28 2010

Barriers to Open Source Adoption Have Fallen.

Industry leaders predict consolidation of recession gains in 2010

Survey introduction:
Continuing a tradition started by our colleagues in the Open Solutions Alliance (OSA), who merged with OW2 at the end of 2009, OW2 asked the CEOs or highest executives with responsibility for open source at OW2 and OSA member companies to make predictions about open source adoption perspectives for the coming year.

The Contributors:
• Miguel Valdés-Faura, Chief Executive Officer and co-founder, BonitaSoft
• Jean-Pierre Laisné, Open Source Strategy Manager, BULL S.A.
• Roger Burkhardt, CEO, Ingres
• Michael Grove, CEO, Collabworks
• Bertrand Diard, CEO, Talend
• Gabriele Ruffatti, Engineering Technical Director, SpagoWorld, an OSS initiative of Engineering Group
• Benjamin Mestrallet, Founder and CEO, eXo Platform
• Cedric Thomas, CEO, OW2 Consortium
Question 1: As the economy started to sink a year ago, many predicted that bad economic news meant good news for OSS companies. Did 2009 help or hurt the OSS industry? How did your company fare? What do you see for your company and the industry in 2010?
Question 2: Have the results of 2009 or expectations for 2010 caused any surprising changes in your deployments or perhaps even your business model?
Question 3: Given how open source adoption earlier in the decade paved the way for the excitement around cloud computing today, how do you see OSS and cloud computing interacting in the coming year?
Question 4: In 2009, governments worldwide changed procurement rules in ways that help with open source adoption. Have these efforts worked? Do you see the trend continuing? What more can or should the US, the EU, and other governments and agencies do to remove roadblocks and help OSS gain wider adoption?
Question 5: What new business challenges will OSS help address in 2010?
Optional Follow Up Question: What currently serving politician or other person of influence do you expect to be the biggest friend of OSS in 2010? Who will be the industry's biggest political enemy?
To see the full list of questions and answers, open the attached file

Survey report:
According to Bertrand Diard, CEO of Talend, "Adoption barriers and fears are history." He said that "2010 will be the year of growth and deployment acceleration." Diard was one of seven leaders of commercial open source companies asked by the OW2 Consortium about their expectations for 2010.

Miguel Valdés-Faura, CEO of BonitaSoft said, "2009 was one of the best years for most OSS vendors in terms of revenues … I expect 2010 to be even better." Jean-Pierre Laisné, Open Source Strategy Manager for system integrator BULL S.A. concurred. "2009 has been a good year for Systems Integrators, and an even greater year for FLOSS vendors" he said.

The most common explanation for the success of open source in 2009 was, as Gabriele Ruffatt explained, "mainly because of cost-reduction and increasing effectiveness." Ruffatti is Engineering Technical Director, SpagoWorld, an OSS initiative of Engineering Group. However, Roger Burkhardt, CEO of Ingres, chose to be more blunt. "The economy put a spotlight on the predatory pricing practices of proprietary software companies," he said.

On the other hand, Benjamin Mestrallet, CEO of eXo Platform, was a bit more sanguine. He modestly said, "We have been hurt less than proprietary companies because many customers have tried to spend less by switching to open source solutions." Michael Grove, CEO of Collabworks, also struck a sober note. "The economic news regarding OSS was mixed. Many OSS companies that were negative cash flow suffered. Some went out of business," he said.

Most leaders see 2010 as a year when companies and government agencies will use open source to cost-effectively address the backlog of IT projects that were put off in 2009 as a result of slashed budgets. Diard explained, "they will still be under pressure to provide fast time to value, and to leverage restricted budgets. OSS will help them be more reactive and efficient."

Again Grove struck a note of caution. "There must be real value contributed by the community and consistent execution to win commercially," he said.

By contrast, Mestrallet expects open source to be game-changer in the markets for "small hardware such as netbooks, phones and tablets." He predicts that "Open source operating systems for tablets will quickly find hardware providers to create products that rival the quality of the product Apple will ship."

Open Source and The Cloud
Most of the leaders see Cloud computing and open source as complementary. "Cloud computing leverages OSS software for its flexibility and cost effectiveness - it has no alternative," said Diard.

Burkhardt goes further. "Cloud computing embeds open source infrastructure once and then grows the usage at a geometric pace without any of the adoption hurdles and delays you see when you grow by adding new end users (skills, education, etc)," he said.

Laisne expressed concern. "We will have to observe how FLOSS will coexist with the proprietary applications of Cloud computing," he said, along with additional concern about licensing.

While also concerned with licensing - "the AGPL license is the right choice for cloud distribution because it requires that people who use the software have access to the code" - Mestrallet concurred that "The cloud is a good way for open source companies to diversify their revenues."

Government and Politics
Many of the leaders were quite encouraged by recent changes in government policy. "2009 was a milestone year for government open source policies as they moved from the aspirational policies of the previous decade ("open source is such a great idea… let's do it") to action-oriented programs that affect procurement policies directly," said Burkhardt.

Mestrallet added, "Many now advise their IT departments to use open source products if they are of the same quality as equivalent proprietary software. Some countries such as France and Germany have been very pushy."

Yet, some leaders are sceptical. Ruffatti said, "Governments can help OSS gain a wider adoption only by supporting a real political choice. "In 2010," added Laisne, "serving politicians will have to make the necessary changes in policies in order for FLOSS to fully demonstrate its power of wealth creation for the society as a whole."

Diard went for the realistic appraisal. "Government involvement in Germany and France has helped OSS in the past by providing a more fertile ground initially. But OSS in countries like the US and the UK did not benefit from this help, and this did not prevent OSS from going mainstream there too!"

Friends and Enemies
When asked about open source's biggest political friends in 2010, both Grove and Mestrallet pointed to America. Grove singled out the White House CIO, while Mestrallet expressed hope in the entire Obama Administration. Laisne pointed to OSS users, assuming they collaborate with OSS organizations such as OW2, EFF, FSF, and so on.

As for enemies, Ruffatti warned about OSS companies trying to emulate their proprietary rivals. For Grove it was simpler. "I worry about Oracle," he said.

Mestrallet focused on one issue at Oracle. "This is going to be controversial to say, but I think the actions of Monty Widenius, one of the co-founders of MySQL, will be more bad than good for open source. By trying to keep MySQL from being acquired by Oracle, he put a lot of fear out there that will lower the valuations of many open source companies, and that means less funding."

For More Information
To read the questions and all of the CEO and division leader answers, click here. Previous prediction surveys were conducted by the Open Solutions Alliance (OSA), which has merged with OW2. For previous surveys, visit http://www.opensolutionsalliance.org.