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The State of Open Source Business - InternetNews.
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The State of Open Source Business

Open source business is gaining momentum and is no longer dominated by the discussion about how to make money. At least that's the view of Open Source Business Conference (OSBC) organizer Matt Asay who now thinks that open source has crossed the proverbial chasm.

"The issue is now how do you adopt and get the most out of open source and less about how you monetize open source," Asay said on a conference call discussing the latest trends in open source business.

Asay noted that there has been $2 billion in open source investments since 1997, and he cited research that reported that high-quality open source software would cost $16 billion to replicate.

He said end-user enterprises are realizing that they can invest a little bit of money into open source and get a lot out of it. In his view enterprises are not choosing open source for the "religion" but rather for the benefits.

Though Asay sees open source monetization as being less of an issue now than in previous years, money still remains a large issue for open source vendors and, more importantly, for users.

451 Group analyst Jay Lyman told listeners on the call that, according to a survey conducted by 451 Group of 100 end user organizations, the No. 1 reason for choosing an open source solution is cost, cited by 43 percent of respondents.

The No. 2 reason from 21 percent of the respondents was reduced dependence on vendors. Eighteen percent indicated that flexibility was their reason for going with open source. On the low end only 6 percent cited performance as a reason why they chose open source, 4 percent noted security and a paltry 2 percent noted that reliability was their reason for choosing open source.

In another study conducted by 451 Group of over 30 proprietary vendors who have done some amount of open source activity, Layman reported that the primary reason for the vendors to go open source was competitive forces, cited by 25.8 percent of respondents. The number two reason was first mover advantage at 22.6 percent.

The most surprising aspect of the findings according to Layman was the number three reason- customer demand, which was noted by 19.4 percent. Layman said that it was a surprise to him to see that level of influence from customers.

Andrew Aiken, managing partner at open source management consulting firm Olliance Group, added further fuel to the fire of how business thinks about open source.

Aiken relayed findings from the recent open source think tank conference, which 102 leading open source business experts representing 81 companies from around the world attended. Among those findings is the fact that there is a resource-constraint issue with open source due to increasing demand and limited supply of skilled professionals.

Participants in the think tank also noted that there are concerns about a lack of commercially available support for certain open source efforts.

As an added concern, CIOs apparently feel that proprietary solutions still have an edge over open source solutions when it comes to on integration and interoperability.

Fundamentally, open source must stand on its own merits in order to be successful as a business.

"The fact that a solution is open source is nice, but it doesn't give a free pass," Aiken said. "The application still needs to compete on features and functionality."