I met with an executive at a Fortune 50 financial services customer of Alfresco's yesterday. As we talked about his plans to replace various (proprietary) software products with open source and SaaS products, he made the following interesting comment:
We're going with open source and Web 2.0-type products for a variety of reasons: Cost, flexibility, and speed of development. My users don't want to have to wait five years for the next iteration of a product. They don't want to be on the old version while competing products race ahead.
So, our strategy is to let the dinosaurs die. As new projects come online, we're going with open source or more agile proprietary products. We aren't overtly dumping the proprietary products: We're just letting them go extinct.
In this he is not alone. Alfresco sees rip-and-replace opportunities, but far more common is "hold-and-embrace" opportunities, where a customer holds on to dinosaur/legacy technology while embracing open-source solutions (or proprietary solutions that are more modern than decaying technology already in-house) for net new projects.
In this way, there is no immediate sell-off of the proprietary solutions. Just a gradual (but persistent) fading away....
Listening to him, unless proprietary vendors can find ways to keep up with the pace and flexibility of open-source development, I suspect they will go the way of the once formidable dinosaurs. Extinction never looked so good.