The 451 Group’s CAOS practice last week published its latest long format report: Going Open, Going Closed.
The report is the latest in a series from the 451 CAOS practice examining the impact of open source on business strategies. As previously indicated, it takes a look at a number of vendors that have successfully ‘gone open’, including WANdisco, JetBrains, SAP, Intuit, and VMware.
It also tracks the progress (or lack thereof) of the vendors profiled in our 2007 Going Open report, including Covalent, Hyperic, Ingres, Intalio, Jaspersoft, Laszlo Systems, Openclovis and Qlusters.
Finally, it also takes a look at vendors that have walked away from, or at least decreased their engagement with, open source licensing and development projects, investigating the reasons why they failed to gain the expected benefits from open source – or open source failed to meet their requirements.
The vendors that fall under this category include Calpont, GroundWork, KnowledgeTree, Symbian and SnapLogic. To be clear with regard to the report’s title , we would consider all of the following vendors to still be ‘open’ to some degree. As the report explains, however, they are not as open as, perhaps, they once were.
The report also includes more in-depth analysis of themes discussed in recent blog posts, such as the decline of ‘open source’ as an identifying differentiator, and the commercial open source window of opportunity, as well as a list of the best practices for software vendors considering an open source move and the lessons learned from those vendors that have had less successful engagements with open source licensing.
Our key findings:
- The trend of closed source companies adopting open source software licensing and development methods has continued apace since our previous report.
- Contrary to our initial expectations, however, there have been relatively few business-model shifts in the years following the publication of that report.
- At the same time, there has been an explosion in the amount of M&A activity involving open-source-related vendors.
- There is also a small but growing list of vendors that have backed away from open source licensing and development strategies, opting instead for ‘shared source,’ ‘freemium’ or SaaS-based approaches.
- The fact that closed source vendors are not dependent on directly monetizing open source software gives them the freedom to relax control and encourage community through more permissive strategies.
- Going open is not an either/or option for most companies, but a matter of applying the benefits of open source to their advantage while retaining an established closed source business, where appropriate.
- While early approaches to going open were based on new vendors exploiting licensing to disrupt the existing market, we have also seen the emergence of approaches that involve incumbent vendors maintaining the status quo and avoiding disruption.
- Shifting an entire business model to take advantage of open source licensing and development is a difficult process that is not to be taken lightly.
- By comparison, it is easier for existing vendors to acquire vendor-led open source projects, engage with an existing foundation, or encourage open source development that complements their closed source software.
- Open source is not a panacea. This is true of closed source vendors trying to reinvigorate a distressed product, but also of specialist vendors building a business around an open source project.
- Strategies for ‘going open’ have become more nuanced as both closed source vendors and open source specialists have come to better understand the benefits and limitations of open source.
The overall conclusion is that ‘going open’ is a complicated and difficult process that requires concerted effort and an understanding of best practices, as well as the lessons learned from companies ‘going closed.’ Overall, the report presents an impartial overview of the strengths and weaknesses of open source strategies, the successes to replicate and the mistakes to avoid.