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CIOs explore open source options

This year's Open Source Business Conference (OSBC), being held in Boston next month, is different from past years in that there is now a track for CIOs. Why? According to Matt Asay, conference director and director of Novell's Linux Business Office and Open Source Review Board, it's because open source has arrived -- in the executive suites. Asay recently took some time to discuss with what CIOs should know about open source.

Why did you decide to add the CIO track to this year's show?

Instead of just having the vendors up there, talking about their strategies in a vacuum, when we involve the CIOs, we are able to add some reality into the mix.

They are able to give feedback, saying 'You know what? That iteration of a dual-license model really wouldn't work in our case and here's why,' or 'The reason why we're not using open source applications is x, y and z, but if you solved those problems, then we would be happy to buy them.' So it made the conversation that much richer. 

Are there companies that just shouldn't use open source?

It depends. For example, if the company has Windows running everywhere and wants to use Microsoft SharePoint, it probably wouldn't make much sense given how SharePoint integrates with [Internet Authentication Service], with their database, with the range of things Microsoft offers. It probably wouldn't make much sense for them to go out and find an open source content management system like Mambo or some other alternative. But for companies that have a mixed environment, then absolutely, open source should appeal to them. Generally speaking, I think the answer is that open source does measure up and they should at least give it a look. The great thing about open source is that you can try [it] before you buy [it] and if it proves to be weak or not fitting for the company's needs, delete it and no money [is] lost. Time lost, but no money lost. 

Should SMBs do things differently than enterprises?

I think they should look at open source differently, definitely, because a company like Fidelity [Investments], which has a $2 billion a year IT budget, can obviously afford to tweak the code if they need to or play around with open source in a more experimental fashion. SMB buyers need to look at companies like SpikeSource and others that take a lot of the complexity out of using open source. I definitely think that they need to be looking for an integrator or an [enterprise application integration]-type vendor to make the open source adoption curve much easier for them. Is there a major trend that you wanted to make sure was included in this year's show?

It was four years ago when we saw the rise of the first wave of open source at the operating system level. A few years later, we're now in the middle of the second wave of middleware infrastructure; databases with MySQL and JBoss proving themselves and doing quite well financially.

OSBC CIO Panelists

General Partner, Matrix Partners

Managing Executive, JP Morgan Chase

President and CIO, Fidelity Investments


Vice President of Technology, NLG

CIO, CitiStreet

We are now on the cusp of the third wave and this is probably the biggest trend that'll be covered at this year's event, and that is the rise of open source applications. What's interesting about this third wave is we're no longer in the realm of successful open source projects that grow up to be enterprises, like Red Hat and Novell. Instead, what we're having is commercial entities, from the beginning, creating excellent code and choosing to release it as open source. It's just changing the way enterprises think about software and think about buying software, and I think that's a huge trend that will just continue and affect every single vendor in the world. There just won't be any vendor that can withstand the pricing and distribution pressure that open source will have going forward. So you're talking about these waves. 

What does the future of open source look like?

I think [the third wave] is going to be the big trend for the next five years. I think it's going to be the next five years at least as we see these new Bohemians and as we watch large established vendors try to turn their ships around and become like more open source companies. That's not to say that Oracle is going to open up its code tomorrow. All of this has little to do with source code itself and more to do with the idea of pricing on a subscription basis, and having a lower cost structure and distributing through the Internet rather with big, direct sales forces. 

What are three things that every CIO should be able to tell their CEO or CFO about open source?

I think they should be able to intelligently talk through real legal risks and opportunities around open source.

I think they need to be able to address TCO. It's shocking. Forrester [Research] did a report on TCO studies and found that most enterprises don't actually have any clear idea of how much any of their software costs them. They don't have the ability to compare what open source would cost them vis-À-vis their closed source counterparts because they don't really know what their close sourced counterparts are currently costing them in terms of manpower, etc. So I think the other thing that they need to be able to intelligently discuss is personalized TCO for their enterprise, have a grip on how much it actually costs them to deploy the software they have now.

The third thing would be migration costs. What would it cost to move from what they're currently on? As open source becomes more and more of an issue that the Wall Street Journal and The New York Times, etc., cover, the CIO needs to be able to answer the TCO and legal issues that surround it. [Because] the CEO is going to be reading about it all the time, going back to the CIO asking, 'Hey, I've heard about this. It looks big, JP Morgan is behind it, Putnam [Investments] is behind it, what are we doing with it and why aren't we doing more?'

For more information on OSBC and this year's show, visit their Web site.


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