Open source has some specific advantages for New Zealand and in these recessionary times. It provides source code for free that can be modified, subject only to the provision these modifications must be made available to the public. For New Zealand, with its small market, this means customisation to meet regional differences can more easily be undertaken. For example, American zip codes can be changed to postal codes; VAT can be changed to GST; and numeric dates can be set in the correct order.
In an economic downturn, the elimination of licensing fees can also be attractive, although it should be noted open source is not really free – it needs implementation, customisation and maintenance, just like proprietary software. It is important to note, also, that open source represents a fairly broad mixture of quality. But excellent packages now exist for handling a wide range of requirements, including web servers, complete office suites, ERP, CRM, business intelligence, web development, project management systems, software development tools, presentation systems and numerous others.
For developers, an additional advantage for New Zealand is that open source makes it possible to get a product out into the world without enormous marketing resources, and to develop a community capable of improving the software, providing suggestions and fixing bugs – capabilities that would otherwise only be available to large and well-funded corporations.
Red Hat is a provider of infrastructure and middleware, primarily around Linux and associated products. “We have a fairly extensive portfolio of open source,” says Australia-New Zealand general manager Max McLaren. “We also have a strong services organisation around learning and professional services.”
Red Hat has seen a growing interest this year as economic conditions worsen. “We provide an opportunity for organisations to use an alternative to software licensing and maintenance fees,” says McLaren. “They can then use the released money for capital investments and to put in place new solutions.”
Red Hat has a variety of offerings, ranging from the openly available community products such as Fedora and JBoss to subscription products, where the base product has been migrated into a commercial offering. Commercial products provide software, updates and a range of support offerings from web-based service to 24x7 support. There is also a software insurance policy available for those concerned with intellectual property issues when using open source software.
“We have a strong value proposition for the channel,” says McLaren. “Customer satisfaction is good and most customers renew. That means there’s a good revenue stream with Red Hat and open source. You can now obtain a trusted solution. We can often outperform competitors in implementing a solution that solves the business problem at a lower cost than the alternative. There’s more money on the table for the partner to implement that solution, but less money required from the customer.”
Silverstripe is in the business of helping businesses build websites and web applications, and it also creates an open source software project called Silverstripe CMS. The company uses this product in creating websites for its customers. “We are one of the few New Zealand companies creating an open source product,” says director Sigurd Magnusson. “Most New Zealand businesses are taking open source products and tailoring them to specific needs. We are doing that, but also creating code.”
The Silverstripe content management system is a tool that enables developers to build websites more effectively and also makes it easier to update content. Ordinary workers can enter material directly for web publication. The product has had interest from a number of significant organisations, including the United States Democratic Party, which was interested in using it during the recent election.
“We’re seeing a lot more companies downloading and evaluating open source technologies in a way that is dramatically changing procurement,” says Magnusson. “When they’re satisfied with one solution or have established a shortlist, they’ll approach the vendors or creators of the technology to ask for features that can be implemented. We receive several such inquiries per day. Open source is well poised in the current environment, because companies want to be in control.”
Support for open source is slightly more complicated than for a proprietary package. As the developer, Silverstripe has a commitment to providing a level of free support to users, including forums, mailing lists and so forth. This is expected for any open source project. However, the company also provides commercial support, working with clients on projects that may involve tens of thousands of dollars, or providing mentoring or support on a subscription basis. Additionally, web development companies sometimes work with Silverstripe staff for a period of time.
“Open source was our best shot to go global,” says Magnusson. “We don’t have millions of dollars for marketing campaigns, nor do we know the CEOs of the Fortune 500. Open source provides an adoption-led scheme, magnified by the economic downturn. So far, it has been working marvellously. We also believe open source software is higher quality, because it has more eyes upon it. In our market, there’s another factor: because ours is a product for web development, our customers expect and demand the right to the source code.”
According to Magnusson, one of the main things holding open source back in New Zealand is a lack of coordination between professional open source parties. Companies interested in open source need to work together. While there’s a healthy quantity of open source evangelists and companies in New Zealand, they don’t leverage their abilities by coming together.
“The interesting thing for us is that open source is a viable way for New Zealanders to get their software out to the world,” says Magnusson. “For example, one of the hottest places for us is Germany. There’s a 12-hour time difference and we have no concerted marketing effort. But we have listened and responded to what’s going on over there and the result has been really good sales.”
As an integrator, Unisys supports and has expertise in a wide variety of open source products. “Our goal is to assist customers to choose the best solutions for their needs,” says open source enterprise architect Greg Dickason. “We use and integrate solutions that meet their requirements, yet also provide value. Often a solution for a customer will include open source products – and we ensure that the products they choose work for them and are backed by financially viable enterprises. Examples of the products we work with include operating systems such as Red Hat Linux and Novell SuSE; databases such as MySQL and PostgreSQL; middleware like JBoss; and enterprise applications such as Alfresco and Pentaho.”
Current economic conditions have affected the open source market positively. With businesses focusing upon minimising their costs, the open source model offers an attractive option. Many open source solutions are backed by well-funded companies with professional support organisations. The only difference to the customer is the price and customers are realising open source is now a real alternative with few downsides.
“We see the open source market growing at all levels of the IT value stack,” says Dickason. “Particularly, we see more interest in applications, as customers start to use open source provide business functionality – not just as an alternative in the datacentre.”
Linux is already the dominant operating system in the datacentre. Linux is also providing a platform for virtualisation, which is contributing to its growth at the present time. On the desktop, Linux remains a niche player, but there are encouraging trends. Virtual desktops, for example, require local PCs to have a robust, secure and lightweight operating system with minimal maintenance. This can be provided by Linux. The Linux desktop has also been progressing. Open Office both writes and reads Microsoft Office documents.
“Unisys has a number of people who contribute actively to the open source movement,” says Dickason. “The benefits are really twofold. By working on projects, a vendor maintains high skill levels and gains industry contacts from developers through to partners. Also, working on open source projects helps to drive innovation in our industry, and this helps keep employees motivated. Large IT services companies must integrate new trends quickly, while maintaining a focus on customer value. Often, having employees working for a customer and spending a bit of time on an open source project enables this naturally.”
For resellers interested in the open source market, Dickason offers the following advice: “Most importantly, get to know what open source products are out there and what value they can provide your customer. The beauty of open source is that normally, within one day, you can download a full working copy of the product, play with it and have a good idea of its strengths and weaknesses. You can then choose to partner with open source vendors that provide the products you see value in. “
Gen-i, Telecom’s IT subsidiary, has an open source team that has operated as a main part of the business for the past three years. Gen-i has open source capability across New Zealand, employing about 45 people around major centres. It also works with franchisees, principally in the major cities.
“As far as IT solutions are concerned, the recession is not making that much of a difference yet,” says open source solutions manager, Steve Osborn. “The open source model has changed, with major vendors now offering tiered service levels. Today, you can get support for open source applications, and can modify the code to suit requirements.”
According to Osborn, however, New Zealand remains something of a Microsoft shop. This means there is not yet a huge core of talent at the right levels supporting open source around the country. This is likely to change, though, as technology moves forward. The Novell teaming agreement with Microsoft was possibly the single biggest step towards opening up the market.
There has been a recent surge in interest in the desktop area of open source, based on licensing costs and cross functionality. Gen-i’s current challenge is using open source in a supercomputer context, working in areas such as security and auto provisioning.
“Our engineers are publishing to the community,” says Osborn. “All the engineers are aware of the code and rely on the community for input into challenges.”