Please post feedback if you are aware of any category of commercial software that has experienced a partial or total collapse due to the creation of a free source project?
If you don't know of one today, what are the top 3 categories that you think are the most vulnerable?
Please reply as soon as you can.
Cheers,
Michael.
Elsewhere in my blog I'm asked questions about the new competition Parallelspace faces in the area of content migration tools for Microsoft SharPoint Product and Tehcnologies and this has open my eyes big time to the world of free/open source, its threats and opportunities.
Totally coincidental to the events of the last 2 weeks is the two-day Open Source Business Conference being held in San Francisco today and tomorrow. I'm not attending but very much wish I was there. Checkout http://www.osbc2004.com/live/13/events/13SFO05A/keynotes (don't be confused by the “2004“ in the url.)
For those of us that have been staunch believers in the traditional commercial Microsoft ISV model (myself for 2 decades), I think the software industry is well into a huge inflection point brought on by the encroachment of free source projects into virtually every category of commercial software. They're community-based and not going away. They're here to stay and will continue to grow and spread to every facet of commercial software.
The early effect: driving down prices and most likely, eliminating traditional software licenses as a reliable source of revenue. When Bill asks “Who will want to buy free castrated software?“, he shouldn't be surprised by the answers.
Cheers,
Michael.
In*flec"tion Point
n. A moment of dramatic change, especially in the development of a company, industry, or market.
The American Heritage® Dictionary of the English Language, Fourth Edition
.
From: http://blogs.zdnet.com/BTL/index.php?p=1241&tag=nl.e539
This morning kicked off the Open Source Business Conference in San Francisco, where a mixed crowd of IT enterprise customers and vendors, lawyers, and venture capitalists rubbed elbows as they contemplated open source market strategies.
In his keynote, Larry Augustin, CEO of Medsphere, left everyone with no doubt that the next frontier for open source software development is the applications space. Augustin talked about four successful models, each representing a different application category: sugarCRM, Compiere, Asterisk, and VistA (the technology his company first deployed to the private sector) and looked at what they had in common to come up with six rules that identify a ripe opportunity for open source: (1) Look at heavy applications that are traditionally a big expense and take years to implement. These include, CRM, ERP, PBX, and EHR (electronic health records). (2) The presence of big proprietary traditional competitors with big upfront software licensing fees that make it hard to get started. (3) A large, enthusiastic free user base so you don't have to spend a lot of time educating them and the market about what you are doing, giving you sales leverage. (4) An enthusiastic developer ecosystem--you have a community of people that participate in some way. (5) There is a big enterprise market opportunity: for healthcare, the market is to grow to $25B IT market by 2007. (6) You have a big under-penetrated SMB market opportunity.
Augustin then gave two drivers for the next wave of open source. The first is developer interest. He said that applications give fodder for the next generation of developers looking for a new challenge. "They're not going to build Linux again," he said. The second reason is that the traditional enterprise software model is broken (long sales cycles, expensive, inaccessible to SMBs, etc.). He said that 76% of new license revenue today goes to sales marketing, pointing out the irony that vendors are charging customers to convince them to buy their software.
After a line by line comparison showing how Siebel's financials wouldn't take that hard of a hit if the company ditched its upfront licensing fees, Augustin justified the theoretical scenario and showed how lower cost is in part derivative of a lower cost to sell and market the software. And lower cost means broader market availability.
He concluded his talk recapping the advantages open source has over proprietary enterprise software: a shorter sales cycle, you don't have to pilot, the install time is shorter, there is nearly no enterprise license fee, and you have a large user base to work on.