IBM's open source expansion could speed up IT commoditization

Summary:IBM announced at LinuxWorld in San Francisco that it is extending its support for open source business models in eight key initiatives. I spoke with Dan Frye, who heads up IBM's Linux Technology Center in Portland, Oregon.

IBM announced at LinuxWorld in San Francisco that it is extending its support for open source business models in eight key initiatives. I spoke with Dan Frye, who heads up IBM's Linux Technology Center in Portland, Oregon.

"Our experience with Linux and open source has shown how disruptive the business model is, and we want to extend that business model into other open source projects. The disruptive force of open source affects us all, and we want to make sure that we can move rapidly and innovate," said Dan Frye.

The eight areas are: From IBM LinuxWorld press kit.

o         Web Application Servers - Based on Apache open source projects like Geronimo.
o        Development Tools - Built on the open source Eclipse Integrated Development Environment.
o        Client-side middleware - Supporting the Eclipse Rich Client Platform project for hosting cross-platform applications.
o        Data Servers - Building on the open source Apache Derby, with IBM Cloudscape, and free no-license fee IBM DB2 Express-C.
o        Systems Management - Including open source Aperi projects.
o        Open hardware architectures - Community-driven collaborative innovation with and
o        Grid Computing: Expanded support for Open Grid Services Architecture and the Globus Alliance.
o         Business Consulting and Technology Services - Enabling customers to innovate with open source-based solutions and development models.

This is an aggressive move by IBM which could speed up the commoditization of the IT sector and benefit its massive IT services business groups. But IBM  has a lot of proprietary technologies that are in the path of the open-source steamroller, and the trick will be to figure out which ones to develop further and which ones to leave behind.

IBM is good at moving up the value chain, it will sell large business groups, such as hard drives, PCs, once profit margins drop to low levels. And it can take the same approach towards its IT enterprise products.

In the case of the open source communities, it has been contributing a lot of IP and patents. This helps accelerate commoditization trends in IT, and it impacts smaller rivals that don't have the scale of IBM's IT services business groups to provide them with revenues from helping customers integrate open source technologies.

Mr Frye said that large corporations are increasingly using open source in mission critical applications. For such important projects, IBM's IT services can provide customers with an important level of assurance. IBM can reduce costs by integrating open source solutions instead of commercial applications from rivals, which means more money is available to pay for IBM consulting and services.

It's all part of the industry-wide transition to a services based business model in which companies pay a monthly/yearly fee. This means that it won't really matter to customers if open source technologies are being used, all that matters is that they receive an IT service at an appropriate price and performance level.

To that extent, the more open source technologies IBM can cram into its IT services offerings, the better because it reduces its costs. The open source communities carry the burden of testing and maintenance rather than IBM.

It has to be noted that IBM is considered a good citizen, it contributes more than any other company to open source projects, and it has the most to gain from the success of those projects.

Topics: Open Source


In May 2004, Tom Foremski became the first journalist to leave a major newspaper, the Financial Times, to become a full-time journalist blogger. He writes the popular news blog Silicon Valley Watcher--reporting on the business of Silicon Valley. Tom arrived in San Francisco in 1984, and has covered US technology markets for leading comput... Full Bio

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