CBR has an insightful Q&A piece with Actuate CEO Pete Cittadini where he breakdowns his company's strategy as it relates to open source. A great deal of what he mentions is relevant to gaining a better understanding of open source as more than simply a development model. Increasingly we're going to see more and more companies go the Actuate route and adopt open source as part of their business models due to a amalgamation of market place demand and competitive pressures. I don't personally know anyone at Actuate but from what I've observed of the company, it seems like they really get it when it comes to open source.
Mr. Cittadini on the role open source plays for Actuate:
The cost of developing, marketing, and
selling enterprise software is becoming too high to be a sustainable
business these days. If we didn't do it our future wouldn't have looked
that rosy.
This is a key point. Open source is fast becoming a necessity as it relates to competing in the enterprise software arena. It's not just a cool new fad. The cold, hard realities of the software industry today makes open source a very practical choice. One which is set to become more commonplace.
On the Actuate business model:
We have a hybrid model that straddles between a traditional enterprise software company and channeling that software to a large community of developers via open source...BIRT lets us address that larger market with little or no cost. Once we're in there our enterprise software comes into play with revenue earning opportunities for deployment. So we aren't transitioning to a pure open source company. The primary purpose is get into companies that we didn't market to before and at the same time lower the cost of selling our licensed BI products to them. We're doing that by raising awareness and branding of our open source software.
Why more proprietary companies aren't doing the same and using open source as a funnel back to their closed source products is beyond me. More than a trivial number of companies could benefit from releasing a piece of their I.P. as open source and making use of the opportunities afforded by the community around it. Community momentum is becoming the new avenue into the enterprise. It's become very much cost intensive to sell into the enterprise using traditional methods. On the other hand, open source has emerged as the proverbial foot in the door. Where trial downloads attract trial users where some become paying users and others don't, the net effect for products without a large install base, is actually less than assembling a community of contributors and participants. And seeing how open source code has proven itself as a bonding element during the formation of a community nucleus, there is less reason to write it off.
The subject of TCO/savings realized through the open source model:
It's still early days to gauge how tapping into a 3 million-strong Eclipse BIRT development community will drag down the total cost of ownership of BI. We haven't calculated the overall savings, but it's something that we're working on.
Good point. Even more important than its effect on the TCO of BI, is what is to be gained from tapping into a 3 million-strong Eclipse BIRT development community. The value therein is immense, yet its proposition isn't very easily expressed. I've got some ideas about where to start and I'd love to discuss with others some of theirs.
About the blogger: Alex Fletcher is lead industry analyst at Entiva Group Incorporated, a research and analyst firm which specializes exclusively on the open source software industry. In addition to hisanalyst coverage activities, he advises organizations of all sizes on establishing governance, strategy and policy surrounding use of open source software as a competitive differentiator. Alex has prior experience as a consultant, software engineer and start-up founder. He can be reached at alex dot fletcher -at- entivagroup dot com.
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