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

“The biggest 'sea change' driving the new market growth that IDC forecasts is the mainstreaming of OSS products in the mind of customers. To them, it's all just software after all, and buying decisions are made simply on product functionality (esp. ease of use), price, and the likelihood of quality support going forward. This mindset change plays right into the wheelhouse of OSS, and represents MAJOR progress and opportunity for open source vendors. Microsoft obviously is aware of the threat, given their recent flailing regarding patents!"

- Bob Walters, CEO, Untangle

"The IDC numbers are a nice proof point for what we've been seeing around the globe and support what we're experiencing with our own business - an increase in adoption in both the Alfresco community and with subscription customers that has resulted in a 300% increase in revenues. We're also seeing that enterprise open source adoption is strongest in the United States with community and government partners thriving across Europe. In the UK, where Alfresco is headquartered, it's a bit different. Open source software deployments are fewer in number but with more offerings from companies like our own and these latest IDC predictions, we would expect that to change."

- John Powell, CEO, Alfresco

"IDC's latest open source software research is further proof that open source is simply a better way to fulfill customer needs. While Linux has been a touchstone for the success of community-developed software, this research shows the wide and deep reach of open source software of all types. IDC's latest research tells us that Linux and open source software will continue to outpace proprietary alternatives."

- Jim Zemlin, Executive Director, The Linux Foundation

"The IDC numbers reaffirm for us something we all know - open source software is growing because it solves real problems for customers. But to achieve the numbers IDC predicts and to push them even further, interoperability among open solutions must be paramount. The OSA has made this central to its mission and we're seeing the need for and benefits of addressing interoperability through increasing involvement in our projects. We're looking forward to being a part of the next level of adoption for open solutions."

- Dominic Sartorio, President, Open Solutions Alliance

"The IDC report shows what our customers have been telling us - the horse is out of the barn for open source software. Open source software and licenses have bypassed procurement and spread rapidly throughout enterprises due to freely available downloads. Our enterprise customers are already using an average of 75 open source packages that cover a wide range of product categories. With the rapid spread of open source software, companies are now looking for ways to safely acquire, support and control open source software. Their desire to gain the rewards of open source, while managing risks, will be a key element in driving open source revenue in the next five years."

- Steve Grandchamp, CEO, OpenLogic

"IDC's latest data is hardly surprising. No major barriers remain for deploying open source on a mass basis. I expect that the IDC predictions will be widely surpassed, as open source moves beyond early adopters to mainstream users looking for openness and value. Funambol is accelerating the adoption of open source by providing wireless carriers around the world with mobile email for the masses that is better, faster and cheaper than proprietary alternatives."

- Fabrizio Capobianco, CEO, Funambol

"JasperSoft agrees that opens source software is in a significant growth stage. We know that successful open source projects, like JasperServer and JasperReports, are seeing enormous traction in the market and are multiplying their revenues each quarter. One reason is that open source can take advantage of emerging global channels and reach markets that proprietary solutions simply cannot."

- Paul Doscher, CEO, JasperSoft

"The IDC numbers reflect a realization by the market that open source software is addressing the long-running frustrations customers have with proprietary software. A good part of the explosive (and non-stop) growth is due to the fact that the OSS model wasn't designed to help a single company, but rather an entire ecosystem: IT execs, CFOs, developers and end users. IDC calls this an immature market. Well, we've already seen the disruption this immature market has had not only on the software industry, but also on the industries it serves. Open source has the momentum of a freight train -- one I'm glad I'm on and not standing in front of like my proprietary competitors."

- Gerald Labie, CEO, Open-Xchange

"Obviously the IDC numbers are indicative of the overall upwards trajectory of open source software. This is great news and helps to spread understanding about the strengths of open source. I'm concerned, however, that by focusing on 'standalone' software, IDC has missed what I consider to be perhaps the hottest growing segment within open source software: Software as a Service (SaaS). Call it 'on-demand,' call it 'portals,' call 'ASP,' even. This type of open source software usage is harder to measure but is having a dramatic impact on small- to medium-sized businesses, both for management that assesses and buys software and for end-users taking advantage of browser-based app use and development. I hope and expect IDC to cover open source SaaS in future reports."

- Tad Gordon, CEO, Lumen Software

Copyright © 2007 IDG Communications, Inc.

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