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Demand at the Fount of Open Source: A Primer Based in Demand Trends

Written By: josh chalifour
Published On: December 30 2005

Introduction

This article provides an overview of Free and open source software (FOSS) concepts for both enterprise software clients and vendors that would like to be let in on the buzz resonating from the FOSS-related change in the software industry. I will address FOSS concepts in two parts. The first concerns the FOSS origin and rapid evolution as manifested in global customer demand trends. The second reviews reasons that enterprise clients and government organizations generate this demand as well as why it should push software providers to continue to meet it.

A Basic Background

Let me note a couple terms used in this article, source code and project. These may seem obvious but to the majority of people the terms are not exactly commonplace. Source code refers to a software programmer's art. The programmer writes code, which becomes the software we use. Source code is what people modify to fix problems (bugs) in a program and create new versions of the program. The second term, project, as used in this article refers to open source projects. Open source software is generally developed from a core project managed by a person or team and there may be multiple offshoots from that project. For example, a team may start a project to develop an open source content management system but will also form a business entity to support users of that software project. The business itself is not the core project but it is based on the project and will likely be a participant in the project.

Free software (referred to in this article with a capital F) is software accessible via a license that grants users permission, in perpetuity, to copy, modify, study, and distribute the software's source code. It is a philosophy about the development, distribution, and accessibility of software, namely the freedom involved to that end—Free does not refer to price. Open source is a pragmatic argument favouring the use of Free software. The open source argument promotes the cost savings, security, stability, and efficient development generally associated with Free software.

Maturation of Free and Open Source Software

A growing contingent of enterprise software vendors now support Free and open source software. Though the concept of Free software may extend (in a variety of ways) further back in time, it formally began when the Free Software Foundation (FSF) formed in 1985. One of the most well-known results is the operating system known as Linux (often referred to as GNU/Linux), which was born in 1991. Another widely-used open source operating system is FreeBSD, which was born in 1993 (1979 if one were to trace its ancestors). Finally, an organization called the Open Source Initiative (OSI) began in 1998. These dates highlight the persistence of several significant organizations and projects, though there are other high-profile names that have been and continue to be integral parts in developing the FOSS movements.

The point is that the FOSS community has had time to learn from its mistakes and it has matured its practice. It is no longer a question of will open source software be adopted—it's already in widespread use by businesses and government organizations, at least in aspects such as server operating system and database, and now there are a number of communities creating specialized open source enterprise solutions. Next, let's explore the growth of demand for enterprise products that are based on open source platforms.

There are at least two shifts gaining ground in the software industry fueled by FOSS. The first shift reveals a notion, which seems to be a favourite lately for those that would like to call attention to FOSS successes. This notion stresses that anyone grading success just by peering into the desktop application market is missing the significant new area in the industry, namely Internet-based applications. Articles on the topic always cite Google and Amazon as the stars of "getting-it" because these companies' products are rooted in open source software and methodologies, and they prove those roots help them outperform their competitors. The application these companies provide is basically a trustworthy, easy-to-use, and pervasive point of access to an incredibly complex and vast pool of information, goods, and services; and they do it for an extremely diverse and massive user base—anyone accessing the Internet.

The second shift is the perspective from which software is developed and distributed. Practitioners and users of FOSS view their software more as the basis for a service-oriented relationship. That is to say, communication between the various roles (users, VARs, consultants, vendors, developers, etc.) is necessary for determining and developing the requirements, flaws, and direction of the software. At first glance this might not appear very different from a closed-source software vendor, which certainly must listen to its users' demands in order to be successful. But it is different because in the open source case, the features of the software may literally be developed by a party other than the one that originally provided the software and that development may actually be incorporated into the original source of the software itself. This means that if, for example, a company needs something from its open source software, which is not supported it can then develop or sponsor development for that functionality in the product. The functionality can further the growth of the product as whole. Thus the software's entire user base can benefit and the primary development team of the software may not have to devote as much in the way of resources to creating new functionality on its own. Companies sponsor such development because they have the opportunity to get what they need at a lower cost, and via an efficient process. This development process signals a shift in how the software industry does business.

Both shifts are frequent cause for debate. The proprietary religion practiced by many software vendors often seems at odds to the spreading atheism of open source. This is changing however, and many of the most faithful (Microsoft) even experiment with bits of open source. Why should the situation change? Even if pragmatic arguments for open source don't feel convincing (I'll pose some of these for consideration in the second part of the article), look at the demand trends from a global base of enterprise software customers.

Any vendor that does not take into consideration the type of demand fomented at the forges of FOSS communities is missing opportunities.

How do I know? Technology Evaluation Centers (TEC) publishes The TEC "Q" Report, which tracks and reports end user (enterprise software decision makers) demand trends every quarter. Reviewing information from the report in the graphs below, we can gain insight on some open source demand trends.


@2004 Copyright Technology Evaluation Centers Inc.

Based on the server operating system (OS) demand graph above it is hardly news that the proprietary Microsoft Windows OS is the market leader. Over the course of 2004, demand seems to have had a very slight decrease for both Windows and Linux. It is interesting to see however, that both operating systems saw demand ultimately rise in the year for Q3 2004 compared to Q3 2003. Specifically, Linux demand in Q3 2003 made up 9.5% of TEC's global total, while in Q3 2004 it made up 10.8%. The other OS leader, Unix, visibly decreased in demand, both as a trend for 2004 and in a comparison of Q3 2003 to Q3 2004. If one considers again that Linux was born in 1991, its share of the demand pool, which is now close to that of the venerable Unix, is impressive.

Server operating system is one important area to track demand, another is database platform. In 2004, database platform demand has gone through a more interesting change than server operating systems. In particular, FOSS communities are beginning to present a grave challenge to the proprietary likes of Microsoft and Oracle.


@2004 Copyright Technology Evaluation Centers Inc.

The database platform demand graph above shows that the open source MySQL saw its demand increase in Q3 2004 compared to Q3 2003 and continued to increase quarter by quarter for 2004. The same can be said, though to a lesser degree, of the open source PostgreSQL database. Demand for MySQL made up 2.4% of the global total in Q3 2003 and increased to 8.7% in Q3 2004. Demand for PostgreSQL came in at 1.6% in Q3 2003 and increased to 2.1% in Q3 2004. On the other hand, both Microsoft and Oracle have been stuck in a trend of declining demand quarter after quarter for the year and have even dropped below the demand levels they enjoyed in Q3 2003.

Over 59% of the approximately 5,000 global decision maker inquiries that TEC analyzed came from companies with annual revenues of less than 5 million up to 200 million. This means that a majority of these inquiries come from what is commonly known as the small and medium enterprise (SME) market. This market is often targeted (though not exclusively) by open source enterprise software providers. Often, vendors basing products on open source platforms can make strong justifications for their solutions to SMEs based on qualities like affordability (something vendors selling on proprietary platforms may not be able to compete against).

That information tells one side of the story. Namely, we can see that for a couple key technology components, the configurations that enterprise decision makers are seeking. Let's compare this demand to the reality of what enterprise software vendors are offering.

TEC researches detailed software functionality within more than twenty categories of enterprise solutions. By analyzing approximately 500 products from just our ERP, CRM, SCM, PLM, and EAM knowledge bases we can get an idea of which products support open source and proprietary platforms. The following chart shows the percent breakdown, as of November 2004, with the open source platforms in boldface. Note that many products support multiple platforms.

OS and Database Support by Enterprise Application
Combined ERP, CRM, SCM, EAM, and PLM ERP
Server
Linux 15% 13%
Unix 18% 13%
Windows 32% 25%
Other 35% 49%
Database
IBM DB2 11% 10%
Microsoft SQL Server 29% 22%
MySQL 3% 4%
Oracle 22% 16%
PostgreSQL 1% 1%
Other 34% 47%

@2004 Copyright Technology Evaluation Centers Inc.

Legend (Research Area with Product Count)
Enterprise Resource Planning ERP 136
Customer Relationship Management CRM 94
Product Lifecycle Management PLM 68
Supply Chain Management SCM 120
Enterprise Asset Management EAM 40
Total Products Analyzed 458

@2004 Copyright Technology Evaluation Centers Inc.

Apparently enterprise software providers are putting some effort into supporting Linux as a server operating system. Relatively few vendors however, support the open source database platforms, MySQL and PostgreSQL. Perhaps these vendors need to pay more attention to user demand. In particular, user demand for MySQL is approaching parity with IBM's DB2, yet vendor support is nowhere near close to being equal.

It may simply be that DB2 has a longer commercial history (DB2 has been around for about twice as long as MySQL) and thus is more likely to have a range of current and legacy products supporting it. In addition, there may be issues regarding the functional capabilities of one system compared to another. It is not the point of this article to review functional characteristics of database systems but keep in mind that these are open source systems so it may be possible for the vendors to contribute toward the open source system's functionality.

At least some vendors are already able to support these systems; perhaps they will be the most likely to win business from the population of customers seeking benefits from such open source-based solutions.

This concludes Part One of a two-part note.

Part Two will review reasons that enterprise clients and government organizations generate this demand and why software providers should continue to meet it.

About this Article

TEC's Free and Open Source Software (FOSS) Evaluation Center provides impartial analyses of enterprise solutions that support FOSS platforms such as Linux. To complement the evaluation center, TEC is augmenting its research coverage of Free and open source service providers and solutions.

Please send comments or inquiries to the author, Joshua Chalifour, at jchalifour@technologyevaluation.com.

 
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