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Open Source Business ModelsOpen Source 26 Mar 2008 5:57 PM
Tim Harvey from OSBC - Open Source at the Tipping Point by billm

Tim Harvey is at the InfoWorld Open Source Business Conference in San Francisco this week.  He sent me this note from OSBC to share with our community:

 Open Source at the Tipping Point?

This is my 2nd year attending the Open Source Business Conference. While much of what I heard last year was repeated again this year, I wondered while I listened to the various presentations has open source software crossed the chasm? Are we at the “Tipping Point”?

All of us that attended agree that open source software has and is providing great value to users and customers. It provides people with lower acquisition costs, access to a community, freedom from vendor lock-in and generally a more rapid pace of enhancements and contributions, so why isn’t everyone using it? I think there are probably several reasons but the reality is more and more people are and some don’t even know it. They use or purchase applications and systems everyday that were built using open source components. We have seen recent survey’s that prove open source software is growing in use and importance. However, when you look at Commercial Open Source Companies that have businesses built around open source projects, the largest one being RedHat (RHAT), its still only $500m in revenues. In fact, James Whitehurst the CEO made the point during a presentation that his budget at Delta Air Lines was bigger than the revenues at RedHat.

Can Open Source Software Companies grow with the growth of Open Source Software?
I believe the answer is absolutely yes. Now, they have to provide value and many of them are doing it in different ways. So, open source software is not only changing the world of software for the customers it is also changing the world for software vendors. Rob Beardon, the former COO of JBoss and now at Benchmark Capital made a point to say Benchmark would only fund software companies if they were either open source or software as a service (SaaS) providers. Open Source Software does provide benefits to both the customers that use it and the vendors that support it. We just need to make sure we understand how to make sure both win.  

I leave you with my final question; is this the year CIO’s, CTO’s and Organizations ask the question why wouldn’t you use Open Source Software for their next project, application or business initiative? Regardless of the answer, if the question is asked, Open Source Software has won and we have reached the “tipping point” .  



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