Open Source Software in the Enterprise Technology Market (Market Focus)

Content

• Overview
• Catalyst
• Summary
  • Table of figures
  • Table of tables
• Introduction to Open Source Software
• The History of Enterprise IT Shows That Oss Is Not A New Paradigm
• Commoditization of IT and Liberalization of The Intellectual Property Regime Underpins Oss
• Oss: A Licensing, Development, Distribution and Business Model
• Oss Licensing: Promoting Accessibility, Transparency and Freedom
  • Licensing is central to OSS as it determines the mode of engagement with the code
• Oss Licensing Promotes Distribution, Accessibility and Modification
  • Copyleft licenses: preserving the freedom of the open code
• Gnu General Public License Has Emerged as A Default Copyleft License
  • Permissive licenses: protecting flexibility and promoting adoption
  • The collective impact of the principal permissive licenses on the enterprise OSS market is considerable
• Oss Licenses Form A Spectrum Ranging from The Copyleft to The Permissive Approaches
  • Copyleft remains important but permissive licenses will gain in prominence as the constituency expands
• Oss Offers A Compelling Software Development and Distribution Model
  • Gratis enables lower acquisition costs and the pull adoption model
  • Unhindered distribution lowers the initial costs, enabling a pull-based acquisition model
  • The pull-model lowers the sales, marketing and distribution costs while reducing the risk of project failure
  • Liberal engagement with the code accounts for the unique benefits of the OSS model
  • The open approach to source code can deliver well-tested, modular, flexible and interoperable software
  • The ability to fork code lends the OSS model a degree of evolutionary resilience
  • Based on the twin pillars of gratis and libre OSS remains a compelling development model
• Oss Business Models
  • Not-for-profit organizations: volunteering and sponsorships
  • The pure OSS business model: services and other non-product revenues
  • Subscription services have emerged as a mainstay of the pure OSS business model
  • Service-intensive business models are better suited for complex systems
  • The hybrid OSS business model: the best of both worlds
  • Dual licensing model: the code is simultaneously available under an OSS and a proprietary license
  • despite the availability of the OSS version, a proprietary license may be preferred by some customers
  • The dual licensing business model has been successfully applied to IT infrastructure projects
  • The open core OSS business model: OSS core and proprietary extensions
  • The open core model is attractive but requires superb execution of community and product management
  • Permissively licensed enterprise applications are particularly suitable for the open-core business model
  • The open periphery model: proprietary core and OSS extensions
  • The proprietary core has to be large enough to support the OSS extension ecosystem
• Oss as A Business Enabler: Oss Embedded at The Core of A Business Model
  • Embedding the OSS in proprietary software is a possibility with permissively-licensed products
  • Purists' complaints aside, OSS could play a key role in enabling successful business service
  • despite some differences, the enabler approach closely resembles the classic services-based OSS model
  • The future of OSS is in enabling online services, including cloud computing
• Oss Is An IP Regime Enshrining The Freedom to Obtain, Inspect and Modify The Code
  • Customer Adoption Overview
  • The impact of OSS can be difficult to measure
• Oss Is Present throughout The Stack but Most Widely Adopted in The Infrastructure Layer
  • Commoditization and developer-led adoption are behind OSS' success in IT infrastructure
  • Systems management and middleware technologies also form a natural fit with OSS
  • Recently, OSS has been crossing the chasm and gaining traction in the applications market
• Oss Is Set to Thrive in The Enterprise Technology Stack, but Not without Creating Frictions
  • despite public sector focus, OSS is widely deployed across verticals
  • The public sector is a strategic market that validates the OSS approach and creates a potent network effect
  • The public sector has slightly higher expectations, but other verticals are just as optimistic
  • The link between national initiatives and OSS adoption is more apparent than real
  • Strong arguments in favor of the national adoption of OSS can be heard in certain parts of the world
  • Strong rhetoric does not always translate into enterprises' readiness to adopt OSS
  • The UK is frequently singled out as an OSS adoption laggard
  • Rigid, protracted and vendor-focused procurement processes continue to inhibit OSS adoption in the UK
  • Mundane concerns can play a far greater role than bold public statements
• Oss Competitive Landscape
  • The OSS competitive landscape consists of a patchwork of providers
  • Red Hat has emerged as a clear front-runner among the OSS IT infrastructure vendors
  • Red Hat's performance during the last 12 months has been exemplary but a few challenges remain
  • A diversification strategy led Red Hat to expand into adjacent middleware and virtualization markets
  • Reluctance to confront the database layer illustrates Red Hat's future predicament
  • Whether Red Hat escapes the gilded cage of its Linux business depends on its diversification strategy
  • Novell and Canonical both offer viable alternatives to Red Hat in the infrastructure market
  • under Canonical's leadership Ubuntu is expanding from the desktop into the cloud
  • Novell remains a formidable competitor, particularly in the mainframe, desktop and SAP segments
  • The competitive landscape for OSS middleware and applications is dominated by hybrids
• Wso2 and Mulesource Show That Different Business Models Could Be Adopted in The Same Market Segment
  • Several OSS application vendors have proved able to compete with the entrenched proprietary incumbents
• Ibm and Oracle Have Pragmatically Adopted A Hybrid Approach to Oss
• Ibm Has Recognized The Role of Oss as A Part of Its to Services-based Transformation
  • Oracle continues its long-term strategy of embracing OSS with a dose of ruthless pragmatism
  • following the take-over of Sun, Oracle will control more OSS assets but will not change its stance
  • The threat of negative community reaction will safeguard the future of Sun's OSS assets
  • Google's complex relationship with OSS points to the future of the paradigm
  • Google consumes, hosts and develops prodigious quantities of OSS code
  • Google's business model offers a unique insight into the OSS model of the future
  • Google's strategy portends the shift of emphasis away from the code in favor of transparency and APIs
  • Software foundations are set to continue to play an important role in the OSS market
  • Eclipse: a wonder of collaborative product management
  • Apache Software Foundation: guarding the future and archiving the past
  • following years of hostility, a fragile Microsoft-OSS d?(C)tente is on the horizon
  • Microsoft's interoperability agenda marked the first step but many larger strides have followed
  • Controversial as it may be, the Novell deal marks a watershed in Microsoft's attitude to OSS
  • Having hosted and contributed GPL code Microsoft should be considered as a hybrid OSS vendor
  • Microsoft's motives can be debated but should have no bearing on the significance of the move
  • amidst the d?(C)tente, Microsoft remains selective in its adoption of a conciliatory stance
  • Microsoft's attitude has transformed from vehement opposition to selective self-motivated collaboration
  • Datamonitor Opinion
• Oss Has Won Its Place in The Enterprise IT Market but Many Challenges Remain
  • The OSS genie is out of the bottle and there is no way to put it back
• Oss Has Become An Integral Part of The Enterprise Technology Market
  • in order to compete with the proprietary model throughout the stack OSS needs to learn new tricks
• Appendix
• Definitions
• Methodology
• Further Reading
• Ask The Analyst
• Datamonitor Consulting
• Disclaimer
• List of Tables
  • Table 1: List of OSS vendors in IT infrastructure, middleware & enterprise application market
• List of Figures
  • Figure 1: Summary of the basic open source license principles, according to the OSI definition
  • Figure 2: Map of the principal OSS licenses along the copyleft/permissive spectrum
  • Figure 3: License adoption shows a long tail of permissive licenses behind the copyleft GPL
  • Figure 4: The two principal elements of OSS freedom
  • Figure 5: Relying on a pull model, OSS alters the traditional push-driven software acquisition process
  • Figure 6: Enterprise OSS adoption across the IT infrastructure, middleware and application stack layers
  • Figure 7: Public sector institutions perceive OSS very positively during the downturn
  • Figure 8: despite the absence of mandated adoption, enterprises in the US remain bullish on OSS
  • Figure 9: A simplified OSS competitive landscape framed within the enterprise technology stack
  • Figure 10: Red Hat stock price has outperformed its competitors during the last 12 months