NEW YORK -– Although Linux is making inroads into the infrastructure layer of Wall Street, does open source enjoy the same success beyond Linux?
The evidence is mixed, according to a panel discussion during the Linux On Wall Street conference here.
“Linux has proven that on the operating systems side, there is a comfort level with open source. The same can be said of Eclipse with developer tools,” said Monica Kumar, Oracle’s senior director of product marketing for Linux and Open Source. “Do customers have the same level of comfort when it comes to CRM or ERP? We don’t think so.”
It would have been easy to dismiss Kumar’s comments, given that her employer is a proprietary vendor of CRM and ERP solutions. But she did strike a chord with some panelists.
Omer Soykan, senior vice president of Jefferies & Company, talked about the balance the investment firm is striking with open source application adoption, such as with Customer Relationship Management applications.
“There wasn’t anyone that fit with open source,” Soykan said. “It depends on what the vendors tell us, what’s available in their product soup. We didn’t make a conscious decision to not choose open source. For CRM, it just wasn’t available.”
Venu Pemmaraju, senior investment manager for Intel Capital, also took a measured viewpoint on the adoption of open source applications beyond Linux.
“Open source is just a delivery method and at the end of the day it needs to solve a problem,” Pemmaraju said. “On infrastructure, enterprises are comfortable with open source but to get a Wall Street level of acceptance on applications they need to have more features.”
Pemmaraju is a venture capitalist investing in open source technologies. In addition to potential barriers to adoption on the end-user side, he noted that as an investor, his firm looks at key criteria when evaluating open source companies.
“The challenge is that with open source, there is a component that is free,” Pemmaraju said. “So the question is whether the non-free part is valuable enough that it’s a sustainable company?”
Then there is the question about potential legal risk of dealing with open source .
“Every time we deal with open source it has to go through our legal department almost twice,” Soykan said. “We have to make sure that we have capability to continue on with the product. It is an issue that we look at under a strong magnifying glass.”
451 Group analyst Raven Zachary noted that patents will become an even bigger legal issue for enterprises to consider once the next version of the General Public License comes out. GPL v3 will introduce new patent clauses that could serve to bring patent issues even more to the forefront.
“It’s naive for all of us to think that there isn’t code infringement out there today,” Zachary said. “Most cases are resolved prior to litigation but at some point there will be a US court case, quite likely we’ll see some case law after GPL v3 is out.”
In the final analysis, open source adoption on Wall Street is really dependant on support.
“At the end of the day who are you going to go after when you need support?” Soykan asked. “If the answer is a solid commercial enterprise then the open source application yes it’ll take off; otherwise it’ll move slowly.”