Analysis: Open source experts reflect on how open source is transforming how we buy and sell IT.
Open source technology is understandably controversial, not least because it has massively eroded the software licensing revenues of established IT players.
At a panel hosted by Rackspace, entitled ‘Open source is eating the world: Building on open source for enterprise’, participants disagreed over what was driving the production of open source, but not over the scale of disruption it had brought to the industry.
The name of the event was a twist on the quote by tech investor Marc Andreessen, who said that “software is eating the world”.
“This meant that there is a rise in companies for whom technology is central to how they create value,” explained Alexis Richardson, CEO of Weaveworks, at the event.
“This is very different from traditional IT, which is a cost centre that you might want to outsource, which is still the prevailing view in bricks and mortar UK. The point is that they are saying that there is a disruptive force of companies that are using technology to create competitive advantage.”
He cites Airbnb as an example of this kind of company.
Richardson said that another development is that, in turn, open source is ‘eating’ software.
“The opportunity to make license revenue in the way of Oracle has been massively disrupted,” he said, adding that revenues, profits and margins had “collapsed” due to open source.
This amounts to a value transfer, which has gone back to the end user.
Open source technology is software with source code that any user can inspect, modify, and enhance.
Household name programmes include those produced by the Apache foundation, such as OpenOffice, as well as Mozilla Firefox. The mobile operating system Android is also open source.
Advantages include the fact that it is free and customisable.
It also brings significant security advantages. Frank Weyns, Director of OpenStack International at Rackspace, explains that the sheer size of the community helps ensure security.
“For security, the sheer number of people reviewing is important: in the tens of thousands. Proprietary software is only reviewed three times.”
He says that the advantage of such exposure outweighs the disadvantage of having the attacker being able to access the code. When a security issue is found in open source code it can be sent to distributors before it is publicly disclosed.
This does not mean that adoption of open source will be or has been completely without obstacles.
Richardson highlights that many companies are concerned when using open source that the producer of a piece of software might give up and stop working on the product.
“They want to know who will be supporting their use of the software in 10 years’ time.”
These factors are linked to the proliferation of open source and give some indication of how it is going to transform IT more widely.
Mat Keep, Director, Product & Market Analysis at MongoDB, explained that revenue was moving away from the products themselves to services.
“The perpetual license model is dead or dying pretty rapidly,” he said.
He cited Amazon Web Services, which has been built on open source software and “has launched millions of start-up businesses that would not have had access to that compute resource.”
“That’s why so many companies are embracing the cloud, because companies will increasingly buy services rather than software.” Keep said.
“Marc Andreessen also lamented that the best brains in Silicon Valley have been focusing on how to get people to pay for free software. The opportunity from a commercial side is how we get more people to pay for services.
“The ultimate convenience that developers want is to be able to plug something in and use it as a service.”
Keep said that this shift was a way for open source companies to monetise the developer hours. Essentially, open source is taking value out but it is unlocking huge values for non-technological applications.
Ultimately, though, just as software is eating the world and open source has eaten software, open source may be consumed itself, according to Richardson.
“Open source is being consumed by cloud in turn,” he said.
He envisages a possible shift towards companies buying what they need as cloud services. This could simply be cloud APIs.
Ultimately, open source is not just a new type of software, but may change the very way that IT is sold and consumed.