Looking back on the Open Source year 2009 there are some clear trends and patterns that can be highlighted:

Governmental push and push back
We have seen US administration pushing Open Source in health care and we observed the Swiss government preferring Microsoft without even looking at (Open Source) alternatives.

Rise of new Open Source services players
Lucid Imagination has been formed around Lucene, Acquia continues to grow on the basis of Drupal. Thousands of new services players have been created around the world, some with, many without VC backing. Most of them are happy with their healthy pipelines despite the financial crisis and the recession.

Consolidation within Open Source has continued
Terracotta has acquired EHcache, SpringSource taken over multiple companies, many smaller niche technologies got eaten up. A lot of what is happening is not even transparent.

Commercial vendors have continued to acquire Open Source companies
There is a big appetite for Open Source in commercial companies, i.e. VMWare bought SpringSource, Oracle is taking over Sun (partially an Open Source vendor), to just name two well visible acquisitions.

The jury is still out on whether Open Source companies actually can make big money
Recent management changes, for example at SugarCRM, indicate that the climate is getting hotter even within the companies widely seen as successful. But outside of RedHat and a few companies that got cquired for good money, there’s still no proof that all that VC money will pay off. Which doesn’t mean that many of these companies are not making money. And, while the business case may not add up for the VCs, it certainly does for the Open Source user/buyer. According to most surveys they are happy with the cost savings and the won flexibility thanks to Open Source.

Open Source Business Applications continue to increase in importance
Pentaho just took the lead on EOS Directory, Open Source Business Intelligence is seen as a hot niche by Gartner, Open Source ECM and CRM are able to beat established commercial technologies. The number of reference cases is growing rapidly. But not just large enterprises are selecting Open Source, also the SME world is more and more convinced that Open Source is an alternative to established but often inflexible and expensive commercial offerings.

Linux has continued to increase its presence
Linux wins the consumer hearts through mobile phones and netbooks and continues to run on victory lane on the server side.

The battle on the client is won piece by piece
According to Statcounter Firefox 3.5 has a bigger market share than Internet Explorer 7. OpenOffice.org continues to grow, Chrome OS and Android are becoming real contenders together with Ubuntu to make endusers switch.

Open Source events are suffering from decreasing interest
Be it ApacheCon or many other Open Source focused conference, the interest of both the community as well as the enterprise buyer has decreased. This may have caused partially by lack of budget but mostly because of the growing experience and adoption of Open Source technologies.

Open Source projects continue to bring innovation to the IT landscape
Google presented Wave, Chrome OS, new ideas for better browsing rather come from Mozilla than Microsoft, Alfresco has been quicker in adopting CMIS than most commercial players, cross category integration is implemented faster within Open Source projects than outside.

Did we miss something? Don’t hesitate to add to the list!

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It was to be expected, after weeks and weeks of catching up with the previous most popular project/product on EOS Directory KnowledgeTree, Pentaho finally took the lead today. Business Intelligence is one of the hottest categories in the Open Source business solution space. Even Gartner acknowledged that this is an attractive niche. With Open Source Business Intelligence also smaller companies or less well funded departments can implement their own analytics solutions. So it’s not really a suprrise that Pentaho finally became the most popular business solution on EOS Directory. But let’s see what the coming weeks bring as Alfresco has been catching up as well over the last months.

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The 451 Group just has published their new CAOS report and the (free) results of a recent survey as well. The survey conveys a lot of good messages:

• 47.7% of the companies responding (from US, Europe, Asia, etc.) said that the current economic climate hasn’t changed their attitude towards adopting open source, 46.5% however said they are more likely to adopt open source
• Main reason for using open source is still to save cost (43.9%), but 26.7% also hope to increase flexibility
• Interestingly 38.9% of the people with experience using open source claimed to have an increased flexibility, while 30.6% experienced lower cost as primary benefit
• 58.3% indicated that their expectations concerning benefits were met, while 28.9% said that the expectations were exceeded. So, more than 87% actually are happy/very happy with their decision to use open source

So that’s really good news and should motivate all the ones that are still questioning whether using open source is a good thing.

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Do people actually need something like EOS Directory? This is a question I ask myself from time to time when I look at all the work in front of and behind me. Well, even the most recent surveys reveal that identifying and selecting Open Source technologies is still a major challenge. And looking at something like SourceForge doesn’t make the job easier. Enterprise people are used to work with short lists, and this is exactly what EOS Directory tries to offer: a selection of enterprise ready Open Source technologies in a number of software categories. And as long as I meet so many people who tell me that they found the (Open Source) technology they were looking for thanks to an entry in EOS Directory, as long we will continue to update and improve it. There’s no real alternative and the things missing in EOS Directory can be amended (and will over the coming months).

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When talking about consumers/end users and about Open Source most of the debate is on whether these user groups will eventually accept Linux on the desktop and OpenOffice.org as a replacement of the software they are using today (mostly MS Office). But in reality millions of consumers and end users are already using Open Source operating systems and software on their devices! One third of all the netbooks are equipped with Linux, the Android phones are selling like hot cake, and even the Mac and iPhone users have mostly Open Source foundations below their shiny Apple user interfaces. With Google Chrome OS yet another weapon enters the battle. And at the end of the day, consumers don’t really care, as long as the software is supporting their needs and look cool!

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Many people have compared leading commercial proprietary software offerings such as SAP, Siebel or Filenet with Open Source alternatives (such as OpenBravo, SugarCRM or Alfresco). The conclusion often was that the Open Source option can’t compete on features and breadth. But the fact is that in many cases enterprises don’t need this scope in reality. I have seen so many companies implementing large scale commercial package solutions such as Siebel resulting in a pretty basic application with fairly little functionality. Independently of the outcome though the costs for these projects were high. IT decision makes often underestimate the cost coming with the complexity of a widely configurable and adaptable package solution. In these projects you not only configure what you need, but also a lot what you actually don’t need, just to make the solution work. Given this problem in many situations an enterprise would be better consulted to use a narrower (Open Source) technology and spend a bit of money to adapt and customize it. I can guarantee that the overall costs still will be way lower than the “big” solution. I have often observed companies being tempted to by a “Rolls-Royce” because it was offered at a “Volkswagen” price point, not because it was needed. It looks like a low risk decision. But it isn’t. Maybe in the end it is the right thing to do, but at least an attempt should be made to model and quantify an alternate solution (using Open Source). It may cost you a few dollars or a bit of time, but your arguments later will be that much stronger whenever the decision is challenged. And I am sure, in many situations, “less is more” when all the complexity, maintenance and support cost is fairly factored in.

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There have been many discussions about the benefits of Open Source - the usually mentioned cost reductions and reduced dependencies, or the positive impact on development and implementation speed (as just mentioned in a blog post by Jan Lyman from 451 Group). A key question though is who actually has really profited from the fact that since roughly 10 years with have viable Open Source technologies that can be used as components or as replacement of commercial software.  In my eyes it’s three groups that benefited the most:

1. Startups and internet mega players - without Open Source Google, Youtube or Facebook wouldn’t be were they are today. Think about the license money they would have had to play to Sun or IBM.
2. Enterprises - with the rise and success of Open Source technologies competing traditional commercial software had to lower prices substantially. Just look at the prices for content management or databases.
3. Software companies - with Open Source development speed can be increased and the cost for new features has been going down thanks to the possibility to integrate Open Source software

Commerical Open Source companies are not (yet) on this list, as in my eyes only a few have been really successful (yet) and the amount of money they are making is certainly neglectable in comparison with what Google or IBM are pocketing.

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The US DOD just published a memo on how to deal with Open Source software. And they make a good point that Open Source software should looked at the same ways as any other software. But is this really possible? Do governmental and commercial organizations really create the ground for a fair comparison?

Most organizations look for software by submitting RFIs and RFPs. While commercial proprietary software companies (and to some extent commercial open source players) can hope for the license and subscription money to cover the costs for filling out RFIs/RPFs a true Open Source community doesn’t have this possibility. And Open Source projects like Lucene, Plone, Drupal or Ruby don’t have sales people and marketing to deal with RFIs/RPFs or to make sure they actually receive them. In some cases services players (i.e. Acquia, Lucid, Wyona, etc.) may jump in and fight for the business, but in many cases there’s nobody. That’s why many purchasing officers think there’s for example no alternative to Microsoft Office.

So here’s what I think needs to be done. If an organization really wants to find the best option then they hire a consulting/integration company with the right skill set to substitute the commercial organization between the buyer and the software as such. The results of their work can be compared with the answers of the commercial software providers. What is important though is to look at all the costs involved with a software acquisition. Also the costs that usually are not looked at, like support/maintenance costs, replacement cost, etc.

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Actuate published its 2009 Open Source Survey. What is interesting is the adoption rate in specific countries. Here’s what Actuate’s press release summarizes:

• China reveals high adoption rates with a large majority of those surveyed (80.3%) using open source software. In all regions surveyed the main perceived benefit of open source software is no license costs. However access to source code was uniquely given a 72.6% rating by Chinese respondents.
• In North America two-fifths of respondents are already using open source (41.0%) with close to one-tenth of respondents either in the process of adopting or planning to adopt.  The proportion of respondents who feel that the benefits of open source software outweigh the inhibitors (56.8%) is nearly seven times higher than the proportion that disagree (8.4%). These results are even more positive than in the previous survey.
• Europe continues to capitalise on its early recognition of open source software’s potential, in particular France where over two thirds (67.0%) of the respondents already use open source software and Germany where the proportion using open source software has increased this year to 60.6%.  This contrasts with the UK at 42.1% adoption

What should this be telling us?

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 Many enterprises have two main application technologies settled in their IT landscape. Everything what has to do with office, client infrastructure and local productivity is typically Microsoft. Everything that has to do with enterprise resource planning (ERP) is supported by SAP (or maybe Oracle). Both technology vendors (Microsoft and SAP) are strong market players and leaders in their markets. But both players also try to enlarge their footprint, be it by adding applications or infrastructure elements. There’s no total overlap of the capabilities yet, but Microsoft has been adding more and more ERP/CRM/Workflow/… type functionality over time and SAP has been extending its portal stack. Many companies are concerned by this duopoly type of situation in their IT and are looking for additional vendors and technology platforms. Open Source can be an excellent choice here. Open Source is typically integration friendly, so connects well to SAP and Microsoft products. With Open Source you can better decide what pieces you want to use and what not, so the overlap with already existing applications can be minimized. And with Open Source you only pay what you use, if you pay at all. More and more companies are recognizing these advantages and have started to implement Open Source technologies and products and to build the needed skill base to cope with it. And, it’s not totally unthinkable to actually reduce the footprint Microsoft and SAP are having in the enterprise, by moving functionality into the Open Source stack.

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