Farris: What CIOs should know about the open source revolution

CIOs can gain competitive advantages by taking part in the open source revolution, a movement that will shake up the power structure of the IT world, said Julie Hanna Farris, the founder of Scalix. Farris explains why open source is not a fad and how it will benefit the business world.

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What should CIOs know about the open source revolution?

Julie Hanna Farris, Scalix Corp.
CIOs should know that open source is not a passing fad. Open source has forever changed the software industry and is leading the way into a new era. It is changing the fundamentals of how organizations evaluate, purchase and deploy information systems. Why will the open source revolution have staying power?

At its most basic level, the open source revolution is about freedom and choice. The revolution has been fueled by the collective backlash against vendor lock-in. For CIOs, it means freedom from technology and licensing lock-in by any single vendor.

The open source revolution also represents a shift in the balance of power back to customers, giving them greater control over their destiny. This is good for customers and for the industry overall. Customers have greater leverage with their suppliers, while vendors are forced to stay nimble and innovative to compete. How is it transforming enterprise IT today?

Open source is accelerating the commoditization of technology and the adoption of open standards. We are seeing a shift away from monolithic, proprietary architectures to highly modular computing based on open systems and standards.

The open source revolution also represents a shift in the balance of power back to customers, giving them greater control over their destiny.
Julie Hanna Farris
Founder and chief strategy officerScalix
The result will be a highly interoperable IT infrastructure that allows customers to plug and play best-of-breed components. In essence, open source leads to greater flexibility and choice at all levels of the IT stack. How will it transform enterprise IT in the future?

Because anyone, including users of technology, can participate in the product development process, customers will increasingly play a more active role in the design, development and testing of products. This puts IT organizations in a stronger position to directly influence a product's direction. The result is that customer needs, not just vendor agendas, play a bigger role in how a technology evolves.

Over time, open source will make it easier to maintain and outsource systems, as commoditized functionality and skill sets will be increasingly available on a global basis. How will the open source revolution change the software and hardware sale models and vendor offerings in the future?

Open source is causing a business model disruption that most immediately impacts the software market. Any software category where a viable open source alternative exists, commoditization is taking place. The result is lower software prices. That erodes the margins of traditional software vendors.

The cost infrastructure of incumbent software suppliers makes it difficult for them to compete in a commodity market, while a new class of open source vendors have a lower cost infrastructure because they have effectively leveraged the open source model to lower research, development, sales and marketing costs.

The lower on the stack a software component is, the more vulnerable it is to a disruption by open source. Operating systems, Web servers, databases and application servers have all been impacted, and the trend is continuing to move up the stack to mainstream applications. Software innovations that are unique and differentiable, and where no open source alternative exists, will continue to garner a premium. What will vendors offer if the software is free or costs little?

A hybrid model where software vendors offer a combination of open source and proprietary software is emerging. There are a variety of areas where vendors can provide added value to open source. The suppliers that succeed will:

  1. Find a way to leverage open source to lower their cost infrastructure to compete in a commodity market,
  2. Deliver value added innovations and extensions to open source software,
  3. Provide comprehensive solutions that include support and services such as integration and customization.
Appliances that offer a turnkey hardware/software solution or application service providers (ASP) that offer hosted applications are other forms of comprehensive solutions.

In all cases, customer responsiveness, support and service is more essential than ever. The most successful vendors will excel in these areas. How will the open source revolution change the way products are brought to market?

With open source, bringing a product to market begins at the product development stage. In contrast to formally released commercial code today, it is an organic, grassroots process that is largely fueled by word of mouth. Free access to code means that "products" are often in the hands of potential buyers at an early stage and can be easily evaluated at any point in the development cycle.

"Word of mouth" momentum and community buzz are based on a product's tangible merits and reputation, as there is more transparency in product development, product roadmaps, bug lists and customer use of the software. The marketing hype and "futures" that often accompany today's commercial product rollouts have no place in the world of open source, and conversely will negatively impact market perception How will it change upgrade cycles?

Decisions about what enhancements are made, and in what timeframe, are the result of a more collaborative and open process that may better meet the needs of end user organizations, as it takes their ability to absorb upgrade cycles into account.

In general, upgrade cycles of open source code tend toward smaller, incremental improvements in the form of continuous upgrades. Customers also have more flexibility on when to upgrade because many open source products are distributed on a subscription basis, rather than on a more static user license basis. As always, there will be both major releases and minor releases at varying rates of speed depending on the product or technology involved. Do you think that open source will lead to less money being spent on marketing and sales and more on software development?

Today, open source companies spend less on sales, marketing and software development, because of the grassroots, word-of-mouth nature of the open source community. From a marketing standpoint, this has served as the fabric for gaining market momentum, awareness and "buzz."

As the industry matures and the open source marketplace becomes more crowded, this may change. In a sea of indistinguishable open source products, a trusted brand will become an important differentiator. Initially, this will be primarily driven by reputation of product and the community sentiment.

The sales model of open source products is a self-serve model. Customers are self selecting and self qualifying based on their own product evaluations and reliance on the community. This is a much lower cost model than traditional direct or telesales models. As open source moves up the stack to more complex applications, the need for supplemental support through direct or telesales resource will re-emerge, but it's unlikely that investment would equal that of traditional software vendors.

Software development costs are also reduced because of the participation from the community in the product development and testing stages.

This interview originally appeared on SearchEnterpriseLinux.com.

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