IDC confirms the expansion of OSS in EU

There were two thought-provoking findings in a recent IDC report based on a survey conducted on 625 western European companies. The first one is that open source software is eating into the market share of proprietary software products and gaining ground in mid-to-large sized companies in Europe. The second one is that these companies perceive software to be very important for their ability to succeed and compete.

If you combine the two findings you conclude that open source is becoming mature enough for these companies to trust it and use it to build software that is a key component of their success. The study talks specifically about database open source.

Some European countries are even are moving to legislate preferences for open source over proprietary software. The proposals range in strength from mild boosts to complete mandates. France has issued a government order which says that “we should implement open source whenever possible”. Four years ago French Prime Minister Lionel Jospin established an Agency for Technologies of Information and Communication in Administration (ATICA now called ADAE), which seeks, among other things to encourage the use of free software and open standards. Three years ago, German Interior Minister Otto Schilly announced that his department has signed a major contract with IBM to install Linux and other open source programs across a broad portion of his ministry's IT infrastructure. Last year Munich decided to switch to Linux, similar stories with Bergen in Norway and the city of Paris. The list goes on and on…

Note that most of these stories are limited to infrastructure software (operating system and database).

Orbeon Submits XPL1.0 to W3C

I am happy to report that Orbeon and W3C are making progress on XPL. Read this post on published by OASIS XML Cover Pages.

W3C has acknowledged receipt of a Member Submission for the draft XML Pipeline Language (XPL) Version 1.0 specification from Orbeon, Inc. The XPL XML Pipeline Language defines an XML vocabulary for describing a processing model for XML components. XML pipelining is an approach to processing XML where the inputs and outputs of multiple processing steps (e.g., XSLT transformations) are connected together using a pipeline metaphor. Orbeon has implemented an XML pipeline engine in Java that executes a declarative XML pipelining language called XPL.

Orbeon offers an XPL engine (that implements the XPL specification) with its open source XML Platform PresentationServer.

The advantage of writing XPL-based pipelines using declarative XML instead of writing procedural code is that you end up with flexible code and you increase significantly your productivity for tasks that require high volume or complex XML processing. XPL features advanced capabilities such as document aggregation, conditionals ("if" conditions), loops, schema validation, caching, and sub-pipelines.

Open Source Software: What's Next?

This is a big question; I am going to take a stab at it. It’s no secret that open source has conquered the lower layers of the stack namely the operating system layer with Linux, the App/Web server layer with Apache and JBoss, and of course the DB tier with MySQL and PostgreSQL. Some proprietary vendors have embraced open source to their advantage and sometimes used it to hurt their competitors (like IBM’s commitment to Linux to hurt Microsoft or SAP’s support for MySQL to annoy Oracle) while other vendors have a very hard time finding a new source of revenue such as BEA.

It doesn’t take a genius to figure out that open source’s next crusade will take place. The first obvious area is enterprise applications and some people believe strongly that the second one is IT management. Open source software usually thrives where systems take forever to implement and require big upfront software licensing fees charged by large proprietary vendors making it inaccessible to SMBs. I believe that CRM, ERP and PBX are definitely in this category. In that order there are strong open source projects that are trying to claim market shares namely SugarCRM, Compiere and Asterisk. I could have added the popular Nagios project for the IT management space which extended and supported by companies like GroundWork. Obviously, today these companies are no match for Oracle, SAP, IBM, Microsoft or Cisco but they are gaining ground every day and their popularity is a clear indication of where OSS is going next.

I also believe that the penetration of open source in the enterprise application world might be even faster than its penetration in the underlying layers simply because there is a big market opportunity for services and the open source community will be much more enthusiastic about developing enterprise applications to solve real world (sales automation, HR, billing, supply chain, health records…) problems for themselves and their clients than developing operating systems which can be boring at times.

An interesting debate would be: How can large proprietary vendors continue to make money and grow? My modest and personal answer is that, among other things, they have to invest heavily in R&D to always stay ahead of the curve and change their licensing model. IT buyers are much more educated, they are willing to spend money as long as there is a demonstrable and durable ROI. Salesforce.com is a good example; they offer more functionality than SugarCRM and they don’t charge licensing fees upfront. It’s an affordable monthly fee that customers pay as they go. By the time Siebel realized they had to offer a subscription-based offering, Salesforce.com was already public. It was too late.

This is a topic I would really love to get your opinion on, please post your comments. Do you believe open source is going to be big in the applications space five years from now? How do you see large proprietary vendors make a difference? Do they have to change their licensing model? Do they have to use their domain expertise to deliver services as their software revenues shrink?

Commercial open source: a magnet for venture money (part 2)

I read an interesting article this morning on CNET that complements a story I posted earlier this month. Here are some highlights to take away from it:

• It confirms that open source is driving the creation of start-ups that are attractive to VCs and the space is getting hotter by the day.
• It warns readers that it’s not all that rosy, we’ve seen in the past open-source companies go belly up and burn huge amounts of money. In 1999 and 2000, according to VentureOne, venture capitalists invested $714 million in 71 open-source companies. Most of those projects collapsed. A big difference between then and now is the increased adoption of open-source software by corporate users. In addition to that successful companies like Red Hat (with $125 million in revenue in 2004 and a market capitalization around $2 billion) bring some credibility and peace of mind needed to help the adoption of open source stacks in Fortune 2000 organizations.
  
• Marc Fleury (CEO of JBoss) is a bit worried that so many companies are getting funded without necessarily having a serious business; he said "I cringe a little bit when I see some of the companies that are getting funding. I worry it will give us all a bad reputation in a 1999, 2000 way."
• One of those companies is SugarCRM which offers a model like Salesforce.com with a free open source CRM system as well as a professional version for $249 a year per user. SugarCRM convinced 100 customers to sign up for the professional version. It would be interesting to see where they are in 3 years and if they threaten the Oracle and Siebel of the world (at least for small and medium businesses).

I have one observation related to Fleury’s comment. I am not sure what he meant by that. I personally see most open source based businesses no different from commercial vendors. There are good ones and there are bad ones. So many commercial software start-ups die everyday without necessarily affecting Oracle or IBM’s reputation? What do you think?