FOSS Reality Bites!

FOSS CIO predictions from 2003 now becoming a reality by 2010?

Christopher Koch predicted possible scenarios in the CIO Magazine
Dec. 15, 2003 Issue titled “The Future of Software” that by the year 2010,
the world will make a major shift towards Free and Open Source Software
(FOSS) due to the fact that government and enterprise Chief Information
Officers (CIOs) probably would find themselves hostage to a few monopolistic
vendors that keep software expensive and complex. Many of Koch’s predictions
are becoming a reality today and this analysis takes into account such
various emerging FOSS trends within both the Public and Private sectors

Koch presented the case that Free and Open Source Software will not
be the answer to integration problems and instead will drive down prices in
selected areas of the software infrastructure with the possibility of OSS
turning expensive databases such as Oracle and IBM’s DB2 into commodities by
2010. Today the scenario is relatively different since integration is no
more a dream in the FOSS based products and services ecosystem as platform
independence, virtualization and distributed services are at the forefront
of information technology strategies. It has also been seen major enterprise
vendors are introducing new FOSS products and services in today’s global
marketplace. A significant move has been made recently by Oracle Corporation
releasing its Unbreakable Enterprise Linux Support programme thus
commoditization of FOSS technologies and platforms by enterprise vendors are
hitting mainstream business activity.

It was also predicted that smaller vendors will move toward the FOSS
model keeping in view opportunities for low-cost market entry further
lowering marketing costs building a user base through word of mouth and then
sell services and add-ons thus simply giving it away. This too has been the
trend for the past few years and many Silicon Valley, European and South
Asian technology startups have adopted this FOSS model opportunity. FOSS
provides the opportunity to immediately enter target markets providing
consultancy, training and support services while the core product
development is carried on in parallel. This helps develop an adequate
customer base before actually releasing the core product into the market.

At the enterprise level, FOSS will enter into corporate
infrastructure and emerge as a major rival to existing dominant software
models if the integration issues are covered effectively and this too has
proven true with more advancement on the Linux front and major players Red
Hat, Novell, Canonical and even Google moving in towards providing
customization and integration with round the clock technical support and
training for Linux, this is also proving to be very valid. Moreover, for
developing economies or economies in transition, FOSS has appeared as an
alternative tool to combat software piracy encouraging protection of
intellectual property.

In terms of business and investment return issues, Koch predicted
that CIO’s at Enterprise level will find them stuck in an outdated economic
model for purchasing, installing and maintaining software and fewer dominant
vendors will do business at much higher prices proving fewer choices with
very high migration costs and increasing vendor lock-in. In light of this
concern, vendors will sell applications as specific, configurable components
that upgrade automatically and integrate with any type of system at no
additional costs incorporating minimal effort thus buyers would pay only
when employees use these applications. However Koch also stated that this
model would not prove to be a major revenue generating model for major
vendors and won’t buy in interest or stability on the Stock Exchange from
investors but it seems the other way around as the buy-as-you-use model is
now in practice widely and is also termed as the On Demand Services Business
Model widely employed by IBM and major vendors.

It was also predicted that CIOs focusing on establishing low-cost
infrastructure that would be easily maintainable and less reliant on a
handful of vendors to function will have the upper hand in price
negotiations with vendors and the ability to adopt innovative new solutions
more quickly and easily than those CIOs locked in to a vendor’s software
release schedule. This too has been made possible by companies investing in
the development of their in-house technical support teams employing the FOSS
model since updates are being made available for free and require reduced
vendor support for FOSS Linux distributions including the facility to
customize FOSS while benefiting from optimal IT infrastructure performance.

In the second scenario Koch predicted the possible Public sector
market responses towards vendor lock-in and open standards compliance that
by 2010, European and Asian governments will lead the way towards the
adoption of FOSS while American CIOs will be following their footsteps with
the risks identified that reliance upon a handful of vendors for their IT
would prove dangerous. Governments in Europe and Asia would shift their
purchasing and development dollars to FOSS and this has been evident within
the last three years with more joining in on the FOSS alternative. Once
again the most important risk mitigation will be seen towards reducing
vendor lock-in; defeating vendor dominance models, security of information,
compliance to open standards with calls for compliance to vendors should
they be interested to continue doing business with governments. Such a trend
would force vendors to comply towards creating FOSS within Open Standard

Open Standards compliance has been evolving at a very fast rate
including the prominent case of the Open Document Format and Massachusetts
scenario. A dominant company like Microsoft has now included Open Document
Format support within their office and business productivity tools due to
compliance and further similar activity is predicated from other vendors who
had ignored such issues in the past. The trend is to continue within the
Public sector sharing the surge with the Private sector where governments
continue to mandate FOSS for communication with vendors forced to comply
with the new FOSS market trends. It may also be possible that governments
and enterprise CIOs have had enough of endless complex licensing agreements
and upgrades on enterprise software and instead opt for FOSS alternate
licensing models turning everything they’ve paid for out to the market for
free. Such a trend has been seen recently on and
e-government websites worldwide where public and private sector
organizations are continuously making their FOSS technologies and platforms
available for free encouraging inspection of source code and extensive
testing before considerable use by stakeholders.

Koch’s prediction regarding Europe’s largest manufacturing companies
deciding to freeze all spending on enterprise software until vendors agree
on a standard set of truly open, free integration technologies to hook their
packages together also seems to be becoming a reality with the example of
Microsoft’s ban in the EU marketplace until it paid huge sums of fines and
made compliance to such standards as set forth by the EU. Adding to it, the
EU has been investing heavily into FOSS research and adoption by both Pubic
and Private sectors within all member countries and each of them making back
considerable contribution to the development of FOSS.

Another successful prediction presented a strong case for enterprise
level availability of FOSS technologies and platforms by 2010 emerging from
all corners of the globe with major vendors backing and supporting such
solutions. Key factors would be customer unhappiness combined with FOSS
based commodity threats forcing major vendors to completely revamp their
licensing, pricing, sales, installation and technical support models. Many
vendors have already initiated the process of releasing two models of
software, one freely developed and distributed by FOSS communities and the
other as enhanced derivations from the latter. As an exception in some
cases, some vendors are also making available older versions of their
software free-of-cost while selling paid support.

The predicted services model is also present today where smaller
vendors are also making money by selling paid supplementary consultancy,
training, deployment, migration and technical support services around FOSS
technology and platforms developed by larger enterprise vendors thus an Open
and Inclusive open standards based ecosystem is in evolution. This is also
helping CIOs changing their role into architecture experts taking hands-on
roles creating cheap, standards-based IT infrastructures building highly
customized IT-enabled business processes based on FOSS standards as
predicted by Koch. The “Don’t pay for the software but pay only for
services” business model is in full play today.

Nick Gall, SVP and principal analyst for Meta Group has also
predicted that “Open source and commoditization is a bottom-up process. It
will move slowly up over the next 20 years to the top of the stack. It will
be a slow, painful process for vendors.” This may also be true since no one
model for FOSS business fits all and every entity has to explore which
services model suits its product. Some FOSS business models have not made
money with respect to pay for service and instead have relied on Venture
Capital supporting their sustainability. It has also been witnessed that
many online businesses provide all sorts of services free to their members
but make money out of targeted opt marketing strategies.

Koch also predicted an emerging market for FOSS based ERP and CRM
solutions opposed to the expensive ERP solutions from major vendors but the
fact remains there are only a few FOSS based ERP solutions in the market.
This prediction is still valid and very beneficial in terms of ERP solutions
being developed under FOSS and open standards complying with international
GAAP, financial, electronic data interchange and transaction procedures. The
market may prove to be really big and fruitful. Various companies that have
attempted to use FOSS based ERP and CRM solutions have invested in custom
development projects to add functionality to these packages freely
incorporating the new code into future releases as a contribution back to
the FOSS development communities.

As already mentioned, Koch also referred to the individual software
developer or developer groups that they would be paid for coding as well as
servicing and supporting their work thus if their clients decide to make
such code available for incorporation into a FOSS package for
redistribution, they will be able to sell services to other companies that
adopt that distribution. FOSS will develop into an immediate preference for
startups, small and medium enterprises as well as Venture Capitalists and

So what does it take to get out there and cash from the FOSS
ecosystem? According to Jeremy Allison, developer of Samba software, “All
you need is one good set of code out there” to act as a foundation for
building the complex software systems. FOSS avoids the biggest barrier to
entering the software industry: marketing and sales. FOSS needs no sales and
marketing budget, only a good development leader, quality software and word
of mouth for adoption. The FOSS enterprise software is not free, but it is
cheaper, and services vendors that install and run it for customers are
happy to contribute paid developers to the cause.

He further adds that innovation will flower because it will be much
easier to get new projects going and to sell add-ons for existing open
source. To separate the promising software from the bad, good CIOs will be
more in demand—and more valued—than ever! 

The above information has been analyzed on a non-commercial basis
for information purposes only from an article written by the author
Christopher Koch published in CIO Magazine online dated Dec. 15, 2003 titled
“The Future of Software, A Land Where Giants Rule” at the website address thus proper copyright
attributions as informed by CIO Magazine should be made where necessary. The
author takes no responsibility whatsoever of the views and material
presented within the references provided and readers are encouraged to
research the facts on their own where deemed necessary.  

Online references for further reading:

Koch, C. “The Future of Software, A Land Where Giants Rule”, CIO Magazine.
(Dec. 15, 2003)

Ohloh: Explore Open Source. Mapping the open source world by collecting
objective information on open source projects. 

Source Forge Free and Open Source Software Foundry

FOSS in South Asia

European Working Group on Libre Software

E.U.-Funded Project to Test Open-Source Viability

IDABC Website, dedicated to Free/Libre/Open Source Software to encourage the
spread and use of Best Practices in Europe

Oracle Unbreakable Enterprise Linux

Canonical and Ubuntu Linux

RedHat Enterprise Linux

Suse Enterprise Linux SLE

The Economic Majority against Software Patents

Starting with Linux ZDNet

Microsoft Vista gets criticism before its launching in Europe

EU threatens Microsoft with Vista ban –
Free Software Foundation

Could the EU ban the Windows desktop from Europe?

Adobe and Symantec seek EU ban on Vista bundling – ZDNet UK News,39020396,39283555,00.htm

Open Source Initiative

UNDP-APDIP-IOSN International Open Source Network

International Free and Open Source Software Foundation iFOSSF

BytesForAll Network South Asia

FOSSFP: Free and Open Source Software Foundation of Pakistan


9 Responses to “FOSS Reality Bites!”

  1. Aamir Ali Bhutto: FOSS Reality Bites! | TuxWire : The Linux Blog Aggregator Says:

    […] Go here to read the rest: Aamir Ali Bhutto: FOSS Reality Bites! […]

  2. Brad from BitBot Software Says:

    > Koch presented the case that Free and Open Source Software will not
    be the answer to integration problems and instead will drive down prices in selected areas of the software infrastructure with the possibility of OSS turning expensive databases such as Oracle and IBM’s DB2 into commodities by 2010. Today the scenario is relatively different…

    I don’t think he was wrong, quite the opposite. The fact these issues are no longer pressing means he was correct, with the advent of the ‘cloud’ and widespread use of open-source enterprise software, these things are no longer interesting. Remember that Oracle just bought Sun, a huge open-source vendor.

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