Open Source: As Disruptive As the Internet
Open Source: As Disruptive As the Internet
January 3, 2006: Alex Lee, managing director for Lateral Minds, believes it’s about time we quit making comparisons between open source and more traditional software solutions. But can the software market truly survive without an open source model?
While other vendors might sit permanently on either side of the fence of the open source movement, Lateral Minds has somewhat of an each way bet when it comes to document management software. The Sydney based supplier provides the more traditional Documentum licenses, alongside support for runaway open source DM start-up, Alfresco.
While Lee can see the merits of both software models, he does believe there is an emerging change in the market affecting vendors and customers across the globe. “There is a growing concern that they (vendors) can’t survive on licence revenues and so they’re moving their business models around to survive on maintenance,” says Lee. “As a result, there is a lot of convergence going on where companies are buying companies and they’re not buying them for the products, they are buying them for the customers to support that maintenance model that they have to survive. It’s nothing to do with product features because it would be cheaper for them to build it themselves.”
Ultimately, Lee believes some of many of the larger vendors are struggling to survive on licence revenues. “There are not enough enterprise customers out there who are going to pay a licence fee to support them, to sustain them.” It’s a simple supply/demand conundrum that sees an overload of vendors attempting to fill a limited amount of enterprise customers. While one solution might be to approach the SMB market, the other could be to completely overhaul the original business model and supply a commercial open source alternative instead.
In a commercial open source model, business survives on servicing the customer. Give bad service and you could very well lose the customer, but keep them happy and they will probably renew the contract. “It’s not about selling licenses it’s about supporting customers so customers take on more CPUs or ensuring customers remain customers,” says Lee.
For many companies that are springing up offering an open source platform, it’s a matter of growing their own market. Because they can give it away for free and market their offering online, it’s far from impossible to compete with the big guns in the market who make their profit from actually selling the profit. “What’s happening now for organisations, is as part of their evaluations of new technology, they say ‘what are people blogging about? What new out there on the internet? Rather then saying ‘get me a shortlist of vendors,” explains Lee.
In the end, Lee believes open source is a disruptive technology. What will become of the market, no one knows for sure just yet. “It’s like, the internet is disruptive,” he says. “You have people whose entire business model was about sitting and the middle, taking a cut and they were just taken out. It was disruptive and open source is doing the same thing.”
Slowly but surely open source solutions are becoming a permanent fixture of the software landscape. For one, all Australian Government agencies are now required by AGIMO to at least consider open source solutions in software contracts. But even Lee admits it is not there will always be a place for the Microsoft’s of the world and the choice should come down to what the business actually requires. “In every situation more and more people are seeing that open source is an alternative,” he says. “It may not be the answer but it is an alternative.”
Read more about open source document management solutions in the January/ February 2007 edition of Image and Data Manager.