Open source seeks the top of the stack

The combination of service, maintenance, and enterprise revenue streams is what will make open source profitable in the enterprise application market.

One of the big open source stories of 2006 is the move beyond base applications to the top of the enterprise application stack.

Adaptive Planning, for instance, is using open source and free software techniques to gain traction against rivals like Business Objects and Cognos.

At LinuxWorld this week it announced it would start giving away an Express Edition of its Business Performance Management software at Sourceforge.

This is fully GPL software, CEO Bill Soward told me.  "We wanted to make it as open as possible for the community. We also expect to have people develop around our corporate and enterprise editions, so this made sense."

It's also a complete application. "The download version is an integrated stack on Linux Apache and the Oracle Express Edition which will actually support a lot of users. It's a one-click install."

The Adaptive Planning business model  is software as a service, Soward said, which is the next step for many open source companies. "The challenge is always converting downloads to money, and to buyers a year later. When you do it as a service, with updates, along with maintenance and support, that's where this is going."

The combination of service, maintenance, and enterprise revenue streams is what will make open source profitable in the enterprise application market, Soward says.

In the case of Adaptive Planning, for instance, you're talking about a tool which sits on top of a Business Intelligence (BI) engine, which in turn sits on top of a database, and which in turn sits on top of an operating system. That's a tall stack.

Reaching the top of the stack, and maintaining an open source business model, is the opportunity Soward sees going forward.

"We announced a partnership with Pentaho, a BI company, pre-integrating for a one-stop solution with BI and the application. We want to build a cohesive stack, and be an application vendor with a complete solution."

In the past this required a commitment to six-figure checks and very limited numbers of seats. With this open source business model, however, Soward thinks he can extend the benefits of BPM throughout the enterprise. Adaptive Planning will benefit, but so will its customers.

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