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Open Source , the Business Model & Ecosystem

Filed in archive General by steve on June 07, 2005

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"According to Arthurlinks Schopenhauer, the 19th century philosopher, all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. Open source is now coming close to stage Three . It has recently gained momentum because it supports the immediate economic imperative to cut cost and has the potential to demonstrate a positive ROI on projects and increase predictability in measuring output."Sand Hill has an post titled the "the real open source revolution", in this the author very rightly indicates that the whole point of the Open Source movement is not free software , but the creation of a whole new business model in the software product segment and there fore the evolution of complete eco system around this model.

Some excerpts:

How pervasive is open-source software in the enterprise? In November 2004, InformationWeek Research published the results of a survey that sought to answer that question. After interviewing 420 business-technology professionals knowledgeable about their companies' IT systems, the team found the following:


  • Approximately 58% of businesses polled have been using open source products for at least two years
  • Two-thirds of the companies surveyed used open source products
  • An additional 16% expect to implement open source software in 2005

Many companies consistently cite cost savings (in terms of license fees and hardware) as one of their top reasons for implementing open-source software. For others, it boils down to a simple equation:

Open source = open standards = better interoperability = more resourcesThe open source ecosystem needs to be customer-centric to be viable. There will be a lot of unknowns on the way to the evolution of the ecosystem with a combination of products, services and business models. While the new ecosystem may shrink the time to market and open source software may present a compelling alternative to proprietary solutions, the migration will not be easy. The Darwinian process will ensure that those who add value to customers will survive. Those who do not, will not.

Prashanth RaiTags: Open Source




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