2. The Changing Nature
of Open Source
OW2con 2011
November 23-24
Paris
Cedric Thomas
CEO, OW2

3. 0> The freedom to run the software for any purpose
1> The freedom to study how the software works
and to adapt it to your needs
2> The freedom to redistribute copies of the
software
3> The freedom to improve the software and
distribute your improvements to the public
3

4. Open Source Achievement market share +- 50%
Apache server
Apache has been the leader
in web server platform since
years. It dominates with
over 50% of market share.
Image: http://www.chotocheeta.com/2009/03/06/apache-vs-litespeed-time-to-switch/
© OW2 Consortium 2011 www.ow2.org 4

5. Open source software market >$8b
9
8
7
6
5
Billion US$
4
3
2
1
0
Ligne 21
Source: IDC
http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090729005107&newsLang=en
5

6. Even VCs Like Open Source investments >$3b
VC
Since the first venture
investment in an open
source vendor in 1997:
$3.2bn has been raised
by 163 open source
vendors
through 378 separate
funding deals.
Source: The 541 Group, 2008
http://blogs.the451group.com/opensource/2009/04/08/the-past-present-and-future-of-vc-investment-in-open-source/
© OW2 Consortium 2011 www.ow2.org 6

7. And Red Hat Makes the S&P 500
NEW YORK, July 17
/PRNewswire/ -- Red Hat Inc.
(NYSE: RHT) will replace CIT
Group Inc. (NYSE: CIT) in the
S&P 500 after the close of
trading on Friday, July 24.
© OW2 Consortium 2011 www.ow2.org 7

8. Free Software Commercial Open Source
© OW2 Consortium 2011 www.ow2.org 8

9. Weblogic JOnAS
Websphere Jboss
Glassfish
OpenText Nuxeo
(Vignette) Alfresco
(Documentum) Drupal
Business Objects SpagoBI
InfoBuilder Jaspersoft
Cognos Penthao
Proprietary Open Source
Leaders MS Sharepoint Exo Platform Challengers
(Hummigbird) Liferay
(Plumtree) netNUKE
SAP Compiere
(Peoplesoft) OpenBravo
(JDE) Nexedit
(Sonic) PEtALS
Tibco Mule
IBM ServiceMix
IBM Bonita
Oracle JBPM
W4 Shark
© OW2 Consortium 2011 www.ow2.org 9

10. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
The Case for Open Source
Commoditization Process
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
© OW2 Consortium 2011 www.ow2.org 10

11. Free Software Makes Sense
© OW2 Consortium 2011 www.ow2.org

12. Open Source is
Economically Efficient
What you give
Software code
€
$
What you gain
£ Free expertise
¥
Experience
Market share
(if you are a software vendor)
© OW2 Consortium 2011 www.ow2.org

13. Open Source is
Technically Efficient
Quality
Peer review
Reliability
State of the Art
Global knowledge sharing
Frequent releases
© OW2 Consortium 2011 www.ow2.org

14. Open Source is
Strategically Efficient
For Vendors
Accelerates time to market
Business ecosystems leverage
For Users
Avoids vendor lock-in
Stability and auditability
© OW2 Consortium 2011 www.ow2.org

15. Open Source is
Socially Efficient
Grows local expertise
Promote local software
industry
Empowers the
commnunity
Reduce technology
lock-ins
© OW2 Consortium 2011 www.ow2.org

16. Open Source is Efficient
You can achieve...
More
Leverage resources
from the community
Better
Benefit from the ideas
and the experience
of others
Faster
Quick response from
the community.
Image: http://ara.footblog.fr/615924/1-ER-TOUR-GROUPE-C-ITALIE-FRANCE/
© OW2 Consortium 2011 www.ow2.org 16

17. Still a Challenge for Others
Quality not guarantied
Code is provided "as is"
Perceived legal risk
OSS license are unproven
No responsibility
Code perceived anonymous
Investment risk
Small vendor companies
Lack of stability
Frequent releases
Lack of roadmap
No strategic "owner"
Lack of internal competence
Self-training not a policy
Image: http://ara.footblog.fr/615924/1-ER-TOUR-GROUPE-C-ITALIE-FRANCE/
© OW2 Consortium 2011 www.ow2.org 17

18. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
Open Source Disruption
Commoditization Process
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
© OW2 Consortium 2011 www.ow2.org 18

19. Source:
Clayton M. Christensen, Innovator's Dilemma, Harper Business, New-York, 2000
19
Clayton M. Christensen and Michael E. Rayno, Innovator's Solution, Harvard Business School Press, Boston, 2003

20. aturity
se r m
End-u
Performance
Time
 Source:
 Clayton M. Christensen, Innovator's Dilemma, Harper Business, New-York, 2000
Clayton M. Christensen and Michael E. Raynor, Innovator's Solution, Harvard Business School Press, Boston, 2003

20

21. Functionality, Reliability...
aturity
se r m
End-u
Time
 Source:
 Clayton M. Christensen, Innovator's Dilemma, Harper Business, New-York, 2000
Clayton M. Christensen and Michael E. Raynor, Innovator's Solution, Harvard Business School Press, Boston, 2003

21

22. Functionality, Reliability...
aturity
se r m
End-u
gs
rin ,
o ffe turess
ts ec m
tranrchit syste
e n a co
SSdular ss E
O o e
M usin
B
Time
 Source:
 Clayton M. Christensen, Innovator's Dilemma, Harper Business, New-York, 2000
Clayton M. Christensen and Michael E. Raynor, Innovator's Solution, Harvard Business School Press, Boston, 2003

22

23. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
Commoditization Changing Nature of Open Source
Process
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
23

24. Changing Nature of Open Source
OSS Offering
1980 2000 2020
24

25. Changing Nature of Open Source
OSS Offering OSS Awareness
1980 2000 2020 1980 2000 2020
25

26. Changing Nature of Open Source
OSS Offering OSS Awareness
1980 2000 2020 1980 2000 2020
OSS Experience
1980 2000 2020
26

27. Changing Nature of Open Source
OSS Offering OSS Awareness
1980 2000 2020 1980 2000 2020
OSS Strategic Ability OSS Experience
Passive OSS
Disruption
1980 2000 2020 1980 2000 2020
27

28. Changing Nature of Open Source
OSS Offering OSS Awareness
1980 2000 2020 1980 2000 2020
OSS Strategic Ability OSS Experience
Proactive OSS
Default
Disruption
Passive OSS
1980 2000 2020 1980 2000 2020
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29. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
A Profitable Strategy
Commoditization Process
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
29

30. Open Source is
a Strategic Decision
 For Users  For Vendors
 Avoids vendor lock-  Outsider's initiative
in  New rules weaken
 Investment leaders
protection
 Control

31. How do you make money
with free software?
31

32. Free Software Makes Sense

33. Generic Open Source Business Model
Add-ons
Product Solutions Suites
Packaging Service
Training
Certification
Consulting
Subscriptions Expertise
Systems
Support Integration
Insurance On-Line
Services

35. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
Commoditization Process Challenges
New
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
35

36. Leverage Business Ecosystems
Value Chain
 Downstream flow of
added value
 Vendor-Buyer
relationships
 Quantitative rationale
Efficiency – Differentiation – Customer Ownership
© OW2 Consortium 2007 36

37. Leverage Business Ecosystems
Value Chain Business
 Downstream flow of Ecosystem
added value  Value-added sharing
 Vendor-Buyer  Coopetition
relationships relationships
 Quantitative rationale  Qualitative rationale
Efficiency – Differentiation – Customer Ownership Network Externalities
© OW2 Consortium 2007 37

38. Leverage Open Source Sweet Spot
Proprietary
Models
Business
Heal t h
Competition
U t i l i t i es
Gover nm
solution
I nd ust r y
F i nance
Ret ai l
E t c.
ent
C ar e
Cooperation Infrastructure
Open Source
Infrastructure: Used by everyone, Shared by everybody
The bedrock of our information society
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39. OSS mostly following
2010
Cloud
Computing
OSS mostly racing
39

40. Leverage Cloud Computing Opportunities
Open Cloud
Requires OW2 to drive
Open Source
Open Source open source
for
Open Clouds innovation
Cloud
Architecture for open cloud
Requires
Innovation architectrure
40

41. Opportunities in Progress
 Industry
 Automotive, Aeronautics
 Embedded, R&D mutualization
 Government
 Economies of scale
 Public software (Brazil)
 Future Internet
 Base R&D
 Infrastructure
 Etc.?
 ...
41

42. Agenda
Commercial Open Source
Defining moments
OSS market growth
OSS efficiency
FLOSS became COS
Commoditization Process Thank you
Mature COS offerings
Commodities
Disruptive Innovation process
Open Source Opportunities
The nature of COS
Strategies
The OW2 opportunity
42

43. www.ow2.org
For more informations
Please contact
Cedric Thomas (CEO)‫‏‬
cedric thomas @ ow2
org
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