The open-source industry is worth $60 billion
John Powell, CEO of Alfresco, has declared that the open-source industry is worth $60 billion, not necessarily because of its vendors' collective revenue, but rather because of the value of the cost savings for customers.
That's the right way to think about software: From the customer's perspective.
Open source is now the world's largest software industry....You measure it in the savings people are making in licence fees....Licence fees don't add any value to the product and are purely a transfer of wealth from consumers to software vendors.
Subscription-based business models are ideal for customers because they focus the vendor on delivering constant, consistent value. License-based businesses? Not so much.
As a case in point, Alfresco (Disclosure: I work for Alfresco) just closed a deal with a large US federal agency. The project is worth over $50 million, with Alfresco at the core. But if all of that $50 million were going into my pocket it would be a success for Alfresco and a failure for the customer. Why?
Because as it stands, most of that money is going to integrators to customize our software (and others' - it involves a few big proprietary vendors, too) to fine-tune it to the agency's needs. Our proprietary competition on the deal started the bidding at $2.5 million, and would have cost multiples of that to get it do what the agency actually needed, as the agency determined.
So, we shaved costs off the project, and allowed the agency to divert funds from license costs to system integrators to ensure a close fit. Perfect.
Open source tends to be less costly because of its $0.00 acquisition cost, but also because it is more easily customized and integrated with other systems, including proprietary ones. Open source, open APIs, open standards. They tend to travel together.
Matt Asay is general manager of the Americas and vice president of business development at Alfresco, and has nearly a decade of operational experience with commercial open source and regularly speaks and publishes on open-source business strategy. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.
- Topics:
-
Industry news,
-
Startups,
-
Number crunching
- Tags:
-
open source,
-
customers,
-
IT,
-
cost savings,
-
Alfresco
- Bookmark:
- Digg
- Del.icio.us
Coverity and SD times are conducting Free Open Source Webinar. Coverity in association with Department of Homeland Security has scanned lots of Open Source projects like Perl, Linux, Python, PHP, Firefox etc. In total, 250 projects are involved and 50 million lines of code are analyzed and more than 8500 defects have been eliminated by open source developers using this scan results.
Attend this webinar to learn more, Click on the link below
https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=107874&sessionid=1&key=41E3686F9B655D193F894D4A844EBBC6&sourcepage=register&partnerref=coverity
Coverity and SD times are conducting Free Open Source Webinar. Coverity in association with Department of Homeland Security has scanned lots of Open Source projects like Perl, Linux, Python, PHP, Firefox etc. In total, 250 projects are involved and 50 million lines of code are analyzed and more than 8500 defects have been eliminated by open source developers using this scan results.
Attend this webinar to learn more, Click on the link below
https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=107874&sessionid=1&key=41E3686F9B655D193F894D4A844EBBC6&sourcepage=register&partnerref=coverity