Open source and customer choice

Open source and customer choice

Open source software has long been lurking in corporate infrastructure, often this is not known by executives outside of IT. It has gone through a long period of maturation, now providing a new range of applications in areas such as ERP and CRM, as well as fuelling the rush to cloud computing.

Open source is also becoming more visible. Though Linux has not achieved the success on desktops that some were hoping for, the great success of the Linux-based Android mobile platform may yet bring open source to consumer attention.

“IBM doesn’t provide its own Linux distribution, but we support the operating system on all our hardware platforms, and certify the vast majority of our software products on Red Hat Enterprise Linux and SUSE Linux Enterprise Server,” says IBM software group general manager, Stephen Elliott.

“These products include the Information Management, Lotus, Rational, Tivoli and WebSphere brands.) IBM also provides dedicated Linux hardware processors on mainframes for running Linux workloads.”

IBM’s own open source development efforts include WebSphere Application Server Community Edition (WAS CE), a lightweight J2EE application server built on Apache Geronimo technology. WAS CE includes open source products Apache Tomcat and Apache Derby and is provided without up-front costs, and with optional fee-based support.

Involvement in open source development is widespread, with employees being active on a large number of Apache and Eclipse projects as well as in other areas.

“Open source software is high quality, collaborative and inexpensive,” says Elliott. “With the current emphasis on cost reduction, the open source software market appears likely to grow significantly.”

IBM has also found the open source basis of cloud computing infrastructure as significant. It is the founding member and driving force behind the Open Cloud Manifesto ( which strives to ensure that no cloud environment turns into a ‘walled garden’ that prevents clients from retrieving their data.

“For vendors, open source software is an effective way to appeal to a broader developer base, allowing them to reach and influence beyond their traditional developers,” says Elliott. “It can also be an effective way to penetrate new markets and can improve time to market, potentially reducing development and SG&A costs.”

Resellers do need to understand that open source is a services based business model. Since anyone can download the software, the differentiator is the value-add services that go on top of that. IBM partners with RedHat and SuSE in both reselling their Enterprise range of products, as well as offering extended services based on those offered by RedHat and SuSE directly.

RedHat is a leading international open source development company, responsible for the RedHat Linux distribution as well as numerous products in the enterprise infrastructure area. “Business continues to grow briskly, per results from the past few quarters, and we’re not anticipating anything different,” says ANZ general manager, Max McLaren.

“Open source is associated with the requirements of cloud computing, pay as you go, and SaaS, that are dominant trends in the marketplace. Since Australia and New Zealand pulled out of the Global Financial Crisis last year, RedHat has been one of the fastest growing companies. The traditional source of opportunity has been from Unix replacement, and we are now seeing some post Oracle/Sun merger activity as customers move from Solaris to Linux.”

Customers move from Unix to Linux because of the value proposition, and because the two are very similar. The key criteria for the customer running an applications workload are issues such as certification, adequate performance, security, reliability, manageability, and so forth. “Now, customers can find in Linux the functions that they found in Unix – and then some,” says McLaren. “But Linux also provides ability to run on low cost commodity architectures, so the cost of hardware acquisition is lower.

In addition to Linux, JBoss middleware is an important part of RedHat’s offering, and this business is also taking off. A key issue is that the open source market is now being driven by the “late majority” rather than by the relatively small numbers of “early adopters” who drove open source adoption in the early years. “Companies are beginning to think that, if they can work with Linux as open source, then why not JBoss middleware,” says McLaren. “This is very exciting for us and for other open source providers.”

The open source association with cloud computing is also helping, as RedHat focuses upon Cloud infrastructure initiatives such as its DeltaCloud API. “Customers want to go to consumption based model,” says McLaren. “It is harder for proprietary vendors to migrate to that type of delivery, as the still need to protect their base. It will always be a struggle. Salesforce and RedHat base business on the recurring revenue value proposition of subscriptions. For customers this means there are only operations costs, with no up front capital expense.”

In the New Zealand market, RedHat has a 100 percent channel model, and focuses upon continuing to drive open source technology in the enterprise/SMB marketplace. Its business model is based on supplying high end support to customers.

Novell continues its heavy involvement in open source after acquisition by Attachmate. It is the primary sponsor of SUSE Linux, which is managed by a separate company. The company also undertakes development in key Linux-related area, such as the open source Mono .NET development platform and Moonlight, an open source implementation of Silverlight, as well as being involved in open source products such as Gnome, and KDE. A product to watch is SUSE Studio, which makes it possible to create a complete VMware appliance, preconfigured to create servers, desktops or deploy applications. For resellers, this makes it possible to provide a unique look and feel that can be deployed to any number of customers.

“The New Zealand open source marketplace is mature and compact,” says applied technology strategist Paul Kangro. “People know each other, and things can move quickly. If one company or a government department does something, everyone can go in that direction. We are seeing a reasonable take-up of Linux. The next thing is to strip out additional cost. “

Egressive is a Christchurch-based open source implementer and developer. “We build and support Ubuntu-Linux based server infrastructure for businesses in NZ,” says director Dave Lane. “We also provide Asterisk-based VoIP phone systems, build bespoke websites either with Drupal for content management (CMS) or Ruby-on-Rails for customised applications.”

Lane notes that most open source software is being used today by both developers and general business, with most web sites hosted on the fully open source LAMP infrastructure (Linux/Apache/MySQL/PHP). “Generally, open source is quickly and quietly making inroads into just about every aspect of computing,” he says. “The widespread adoption of open source software tools and systems has the added benefit of moving more and more software towards open standards, since proprietary lock-ins would fill no useful purpose.”

Cloud computing is bringing further prominence to open source. Most software-as-a-service (SaaS) offerings are built on open source technologies. The entire infrastructure and development environments on which those solutions are build is often completely open source.

“We find being part of the open source community both necessary and fulfilling,” says Lane. “We are involved with various facets of the Drupal CMS, as contributors to various Drupal modules, including managing a number of module development projects, and working in areas like advocacy and community outreach.”

Egressive takes a service-oriented approach to the market. “We provide knowledgeable services,” he says. “We’re not unlike high-end auto mechanics, personal lawyers, or doctors. We build and fix things using knowledge and technologies that other people can use just as easily. We maintain a trusting relationship with our customers, understand their requirements, and look out for their best interest. Generally profit margins are lower than in the proprietary software game. With open source, customer satisfaction is everything, because customers can easily switch to other providers.”

Open source was helpful in recovery from the recent Christchurch earthquakes, too. It was used in a number of projects, including a resource map. It involved collaboration among open source developers around the city. “In addition to the infrastructure, issues, many of our customers who lost machines in the CBD were delayed in trying to find activation codes/license keys for proprietary software. Using open source eliminated that issue entirely. We also provided automated off-site backups for many of our customers at an affordable cost, making recovery a bit easier.”

Katipo Communications is a Wellington based website design and development company that is heavily involved in open source. “Products that we have led development on include the Koha Library System, Kete Digital Archives and the Kakama Rostering System,” says general manager Rachel Hamilton-Williams.

“Kete is open source Digital Archiving Software, for community built digital archives. We have just set one up for Lost Art Christchurch, aiding people to retrieve their artwork as part of the earthquake clean up. Kakama is an open source Roster Management System designed to manage casual rosters for events organisations. We also support a range of OS products including Joomla! CMS, OS Commerce, Dada Mail, and WordPress.”

In this country, Katipo finds that open source is a vibrant community. “We’ve seen it at it’s agile best in response to the CHCH earthquake,” says Hamilton-Williams. “I think we’ll see an upsurge in interest for DIY and open source IT as companies and organisations look for innovative, cost effective, tailored solutions that help differentiate them and give them a competitive edge. Android has had very positive effects. It is a ‘friendly face’ for Linux, and a real consumer product. It should give consumers a taste of open source and may encourage them to try it on their desktops.”

One issue holding further use of open source back is that much of it in New Zealand is supported by smaller vendors that can have trouble making it through the hoops involved in responding to complex RFPs and government tenders.

For resellers, Hamilton-Williams emphasises the service component. “You have to have really good service, because the option is always there for a client to look for a new vender or to support the product in house,” she says.

“We tend to push this as a plus for the client. They don’t need to feel locked in to one vendor, and should feel reassured that their business will not be taken for granted. Sales is sales; it’s not any different really just because it’s open source.

“It’s all about the right product for the right person at the right price. And you can’t generally beat service.”

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