We are entering one of the most interesting periods in the history of software. The advent of open source has thrown current software business models up in the air.
Although fine for consumer markets, the licensing model has never really suited business, as supplier and business interests are far from aligned. Suppliers are keen to tie customers in to proprietary solutions, but this does not mean they don't support open standards. Open standards are great provided they can be used to pull more customers in to their web of "gotchas".
It is also generally in a supplier's interests to push the rate of upgrades, which help suppliers both to increase their licence revenues, and also to reduce support costs. Supporting old versions of software is a complex business. It is far easier to say "not supported - upgrade to the latest version", especially when there is a charge to upgrade.
Contrast this with the business need to maximise benefit and minimise cost and risk. Solutions need to be as open as possible to avoid undue exposure to any given supplier. Change needs to be managed to keep down costs and to avoid unnecessary risk.
Open source now offers a new model. In an open-source world suppliers can no longer threaten to "take the software ball away". Customers are free to choose support and integration from suppliers which match their needs, and change supplier when service is poor. I expect we will see the benefit of this in companies in the small and medium-sized enterprise (SME) sector which have traditionally had little say with the larger players.
Talented IT start-ups specialising in providing open source solutions are emerging. Their business model also lends itself to driving collaboration across multiple customers - the start-ups build their customer base, the customers get shared experience and safety in numbers.
Being a service- rather than product-based contract there is also no incentive for such suppliers to force unnecessary upgrades on customers. The last thing they want to do is break things, as they will be picking up the pieces. As a result business and supplier needs are much better aligned.
But what does open source mean for home-grown solutions? I suspect we have all struggled with the build or buy question. However, we also know that once home-grown solutions are started they can never end. A few months of development effort quickly turn into years of maintenance and upgrade. The off-the-shelf world catches up in the end, and sooner or later it makes no sense to continue with the home-grown solution. Little wonder there is so much pressure to buy rather than build.
At last, open source offers an alternative. Forcing an open source strategy on your development teams, potentially will put an end to this waste of human effort. By giving away most of what they develop smart companies will reap the benefits of broader support, and software which lives on well beyond the initial outlay of effort. For too long we have kidded ourselves that there is some strategic advantage in keeping our home-grown solutions secret. As we enter an era of Web-based collaborative commerce, nothing could be further from the truth.
IT industry is on the brink of upheaval. Open source has already succeeded but what remains to be seen is how fast it will take market share. Our systems will no doubt be a mix of proprietary and open source for many years to come, however my bet is that the uptake will be shockingly fast, particularly at the SME level. Alignment of business and supplier needs is long overdue.
Ed Darnell , a former IT director, may now be found at www.itmentoring.co.uk/