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Enterprise software is dead - just ask Silicon Valley

Open source keeps enterprise software flowing.

For some time now, many of the best and brightest minds in Silicon Valley have been focused beyond enterprise software. The New York Times carries a feature today on Silicon Valley's efforts in solar power, coinciding with a steady drumbeat of news on Silicon Valley and Green Energy.

Add to this the dominance of consumer-facing players like Google and the push of Software-as-a-Service vendors like and you have what appears to be a complete rout of the traditional enterprise software market. Selling upfront license fees for millions and dinging enterprises on an annual basis is sooooo 20th Century.

All of which begs for the rise of the IT department again.

Why? Well, because the need for software hasn't dissipated. Enterprises still need to track their supply chains, manage their financials, build and deploy their websites, etc. How we deliver the software to do so has changed, but the need for that software definitely has changed.

Asresearch from IDC shows, enterprise IT departments are increasingly the new software "vendors." Building off open-source components, these enterprise IT staffs are finding great success in serving their own needs rather than shoveling dollars out the door to big vendors with one-size-fits-all value propositions. This is the 21st Century's response to the 20th Century's pillaging of enterprise IT budgets by the big proprietary vendors.

Open source. Where IT doesn't matter, use proprietary software. Where it does, use open source (and hire a development team that can match your need for innovation. The day of the order-taking MCSE is dead.)

For some tasks the software can be offloaded to a SaaS vendor. There will be a lot of such software because, as Nick Carr rightly notes, "IT doesn't matter" least, not all of it. Some IT matters to a particular organization much more than others. This software will be open source because it allows the enterprise to take ownership and control of its destiny. Proprietary software secures an iron umbilical cord between the vendor and enterprise IT and refuses to let go.

Silicon Valley has largely moved on from the enterprise, but open source has not...fortunately for the enterprise.