Issue 4 Summer 008
Companies are already finding
themselves using open source software
at arms’ length, supplied by their
traditional IT suppliers – for example
buying Linux through IBM, Novell, or
Sun, and thereby indirectly supporting
the open source project
THREAT OR OPPORTUNITY? It’s not just the obvious examples like desktop and server
As might be expected, technology companies are software – businesses will have to justify why even core
aware of the threats and opportunities provided by systems should not be treated as commodities. For
open source. Google’s highly-profitable business is example, as banks are all subject to the same strict
built on a platform of open source software
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; IBM and regulatory regimes and have to be able to communicate
Oracle both re-badge open source software like the with each other, then it’s arguable that their business
Apache web server and Linux in their own products; processes will tend to converge. If so, it is hard to make
IBM and Sun Microsystems re-badge OpenOffice.org the case that basic processing systems somehow confer
as Lotus Symphony and StarOffice respectively. a strategic advantage.
Other vendors whose businesses rely primarily on There is some recognition of this in the marketplace: JP
selling commodity software see open source more Morgan Chase’s core development team open sourced
as a direct threat, and react accordingly by trying to its Advanced Message Queuing Protocol
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a few years
secure their customer base. No expense is spared to ago. It has since received backing from rivals including
make it as easy as possible for companies to continue Credit Suisse, Deutsche Börse Systems and Goldman
to buy software from their traditional suppliers. Sachs. However, competitive habits die hard, and it is
Microsoft, the biggest vendor of commodity software, likely to be some time yet before direct competitors in
spent $11.5bn on marketing in 2007 - over 20% of financial services jointly develop a new banking platform
revenue
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(it is not unusual for software companies to on an open source basis.
spend far more on marketing than R&D).
LIMITATIONS OF OPEN SOURCE
Vendors’ marketing teams also work closely with the There are other factors which make commercial
research companies such as Gartner who are used companies reluctant to adopt open source. Traditional
by blue chip companies in their IT decision-making software vendors usually offer some level of protection
processes. The resulting benchmarks have been from possible patent infringement or other intellectual
lambasted by John Suffolk for inflating costs in the property claims. Their legal teams may be prepared to
UK public sector
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. negotiate special licence terms if required. They may
offer service contracts, with SLAs, for responding to
If Carr is correct, paying a supplier £100 and then issues with the software. They may certify third parties to
allowing them to spend over £20 of that revenue supply the software, or offer support or training services.
to sell their product to you may not be sustainable Open source projects can offer none of these.
– sheer economics could eventually force even the
most reluctant IT department to find more cost- It should also be noted that for commercial users, using
effective ways of sourcing commodity software. open source software will not be completely cost free.
Google actively encourages new developers into open
 | Perspectives on technology
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