You know the economy is bad when...

A Fortune 50 opts out of longer-term deals because it is uncertain about its future. The recession is indeed very bad, which may be very good for open-source companies.

This past week, I have heard a few things from customers and competitors that tell me (as if I didn't already know) that we really, truly are in the midst of a recession.

For example, one Fortune 50 customer has been actively budgeting for a three-year deal with my company, Alfresco, but this week, it opted for a one-year deal instead, noting, "Our future as a company that far out is not yet certain."

Posturing a little to keep costs down? Sure. As John Willis noted to me through Twitter, "That's Vendor Management 101."

But this was something more. It was an about-face on a stated plan to purchase in multiyear increments to lock in a lower price and guarantee a longer term of service. It's an indication of just how bad things are, when even low-cost open-source software needs to be managed to pinch pennies.

Not that competitors with open-source companies have it better. In fact, Oracle's response to discovering that it had to compete with Alfresco on a deal with a top-10 financial-services company was to pull out of its bid, arguing that it could "not compete with an open-source vendor."

I've seen proprietary competitors dropping prices by 80 percent and still not coming close to the price tag offered by my company, as well as others in the industry that I follow, like MySQL. This is a very trying time for any technology company, but especially for those who depend on high-price sales teams to push high-price software licenses.

In other words, this is a great time for open source.


Disclosure: As stated above, I am an employee of Alfresco, an open-source content management and collaboration company.

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