CEOs Weigh in on Latest IDC Open Source Research

Last Thursday, IDC announced estimates that revenue from standalone open source software will reach $5.8 billion by 2011. In other words, according to Matt Lawton, program director of IDC's Open Source Software Business Models research program, the market is still immature ($1.8 billion in 2006) - and will see accelerated growth over the next five years.

I reached out to a number of CEOs who head up open source companies (or at least utilize a lot of open source in their technology) as well as some leading open source associations to get their reactions and insights regarding the IDC research... and what a great response I got! By the way, pardon any advertorials - there is some meat on these bones.

"The IDC report on Open Source software growth is a great indication of the overall strength in open source sales. Obviously, we at Sugar are true believers. What we see, however, is a significantly stronger demand in the enterprise for commercial open source software than indicated in IDC's numbers. Our own sales figures indicate a much more radical pull than this report suggests, and I'm willing to bet we're not the only open source company in this situation. The so-called 'next-gen' open source software products -- applications above the infrastructure stack directly touching the end-user -- are showing significant demand both domestically and internationally. Don't be surprised to see IDC revise its figures upward by this time next year."

- John Roberts, CEO, SugarCRM

"In enterprise middleware, we're actually seeing open source entering a next phase in its evolution. The advantages of open source development and distribution methodologies are transcending the initial 'low cost' discussions and actually delivering features and functionality beyond what's available from proprietary vendors."

- Dave Rosenberg, CEO, MuleSource

"Top tier analysts seem to agree that the stars are aligning for open source - not only from an adoption and revenue perspective - but as a serious threat to legacy proprietary players. First, in April Gartner released a report titled "Big 4 Management Software Vendors Face Competitive Threats" saying that HP OpenView, IBM Tivoli, CA Unicenter, BMC Patrol are being threatened by open source systems management vendors mainly because the 'Big 4' do not provide enough additional value to justify the magnitude more cost relative to open source alternatives. And now IDC's research indicates other interesting reasons for growth including 'financial backing from venture capitalists, more comfort with subscription revenue as a business model, and increased interest in OSS within larger enterprise organizations.' Incumbent proprietary players can no longer ignore or give lip service to open source - the writing is on the wall."

- Ranga Rangachari, CEO, GroundWork Open Source