Enterprises: Embrace open source development or go extinct

Enterprises: Embrace open source development or go extinct

Summary: A Forrester analyst warns that enterprises must evolve their IT systems of record into systems of engagement which allow customers, partners, suppliers and machines to engage seamlessly with corporate data -- or fall prey to digital upstarts.

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Enterprises must embrace open source web technologies and development paradigms quickly -- or possibly face extinction.

That's a stern warning from a Forrester Research principal analyst, who contended during a webcast yesterday that the rate of innovation inspired by open source development is accelerating at such a dramatic pace that it could threaten the livelihood of any business that sits on the sidelines.

Jeffrey Hammond, principal analyst at Forrester, said much of the technological underpinnings of organizations that are revolutionizing their respective industries -- the way Amazon has altered publishing, LinkedIn has changed recruiting and NetFlix put Blockbuster out of business -- is built on open source, the cloud and software-as-a-service.

And the three are not mutually exclusive. According to Black Duck Software, which sponsored yesterday's webcast, "Mobility and the Open Web: Open Standards and Collaboration Redefine Enterprise IT," the number of mobile open source projects (and open source AGPL licensing, which governs cloud development) has been growing dramatically.

More than 10,000 new open source projects -- many dealing with application development -- were created in 2011, Black Duck Software reported.

Open source is changing the world and enterprises must change their IT strategy dramatically to compete, Forrester maintains.

"The traditional barriers to entry -- especially technology-based -- are eroding very quickly," Hammond said, noting that the old 10-year product cycle has been replaced by speedy innovation and the capacity of digital startups like the 13-employee Instagram to achieve a billion dollar market capitalization in no time at all, with little if any investor funding or internal resources.

Cost of innovation

Why? The cost of software innovation is about 90 percent less than in years past, he noted.

"Open source more than anything else has dramatically reduced the cost of innovation .... it lets bright people stitch [open source alternatives]together and create a resulting [software]service that scales readily without additional licensing costs.

All of the big trends -- big data, explosion in development tools and mobile frameworks --   demonstrate this and the quick shift in power away from traditional software suppliers to consumers and their developers.

"Rapid innovation and rapid integration are changing the way folks outside the firewall are thinking," Hammond said, noting that application development in the consumer space for mobile devices, such as iPhones, iPads and Android devices -- is leading the way but leading-edge corporations are following suit.

Developers no longer think of themselves as pure .NET or Java developers. Rather, they identify as polyglots -- developers who harness the best language for specific web applications, and many of them are open source, Hammond said.

Hammond estimated there could be as many as 1 billion smartphones in operation by 2016, or as early as 2014, and thousands of startups using new mobile, cloud and open source technologies such as HTML5, web APIs, public and private cloud platforms and open source communities -- to send established companies the "way of the dodo bird."

"Digital upstarts are using this [ready made] data center to compete with you," Hammond said, advising enterprises -- developers inside the firewall -- to jump on the bandwagon or risk obsolescence.

"We are seeing a shift in the center of gravity among development away from isvs and corporations and to communities that form around open source projects ... [it's the] github generation, the eclipse generation. Vendors are still important but they're moons encircling the planet, which is the community. They are not the center of gravity themselves."

The good news is that enterprises don't need the throw out their existing infrastructure or adopt a separate mobile strategy but "consider evolving systems of record and building on top of that a multi-channel strategy" from which multiple devices can access data.

Systems of engagement

That is, traditional companies must evolve their systems of record -- legacy databases etc -- into systems of engagement, which allow customers, partners, suppliers and machines, such as tablets, to engage seamlessly with enterprise IT. "Traditional companies are not ISVs [per se]... they're becoming solution providers and service providers."

Hammond pointed to companies innovating around this multi-channel concept such as Nike, which is spawning its own ecosystem of developers around its running software platform, and CBS Sports, which is exposing its Fantasy Football data to third party providers -- to build its Internet platform. Sears is doing the same, he noted.

IT organizations will continue to support and manage historical data "at rest" in SAP and CRM systems and those aren't going to change substantially, he said. What must evolve is a commitment to "provide data in headless form" in a new class of systems engagement platforms.

"Enterprises need to focus on development [and] how to attract the github generation and high performance development culture."

How should enterprises go about creating these new systems of engagement?

1. Begin by dividing the development organization by systems of record and systems of engagement.

There are two different development processes and two different sets of tools to get each respective parts of the job done, Hammond said.  Customers expect data and application updates to be released three to four times per year.

2. Engage in open source projects. "A lot of people said we'd never contribute back to open source projects but [if you remain this way] you risk becoming extinct," Hammond said.

3. Adopt a multi-sourcing software model and a platform that mixes proprietary and open source software.

"From an enterprise [standpoint], you need to lower your cost of innovation and deploy prototypes to compete against digital upstarts or you risk becoming the next Borders or Blockbuster. It's happening in telco, retail and finance. You're at risk no matter what industry you're in," Hammond advised. "You can't lower your cost of innovation unless you take advantage of some of these technologies."

See also:

Topics: Open Source, Cloud, Data Centers, Ubuntu

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16 comments
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  • Innovation, open source & patents

    Innovation has been going geometric for awhile now. I can vaguely remember back in the 90s wondering if open source would ever make a difference in the enterprise. One of the big turning points, IMHO, was when IBM decided to embrace Linux as a way to break M$'s strangle hold on the OS in the marketplace. Look how that worked out - IBM is making [u]gobs[/u] of money on top of Linux.

    Software patents are the enemy of this process now. There was a time when 20 years was a short enough period that it didn't stifle market progress; now 20 years represents multiple generations of innovation (6 to 8 or more in some areas) and patents are the chains holding back efficiencies, lower costs and expanded choice. Can open source overcome the patent chains? By itself, no, but perhaps the [b]community[/b] can use open source tools to create "good enough" solutions which aren't the latest & greatest, but which get the job done. This is what the C-level guys had better watch out for. Innovative & quickly improving [u]ways to use[/u] available data & services can kill their market dominance, too.

    (... had no idea Instagram only had 13 employees. Wow.)
    ClearCreek
  • embrace communism or leech off of it

    Linux, freebsd, etc, came about as free or low-cost alternatives to the not-rich. Not to help big names profit at workers' expense.

    People volunteered to do work that helped the entire community... leeching off it helps nobody.

    Also, let us take another step forward: at some point companies won't be able to profit from such free work anymore. What then?
    HypnoToad72
    • Should you have had a '?' at the end of your subject line

      I think you are saying that rather than embracing the egalitarian ideals of open source, companies are just using results of the free labour to better their selfish purposes.

      The open source ideals do seem to represent the software equivalent of communism (in its ideal and ultruistic sense), but then we have the Richard Stallman view that has a more aggressive and repressive Mao Zadung interpretation (viz Cultural Revolution) of it.

      The real advantage being touted here for open source is the 'standards' nature of it, rather than whether the source is 'open' or not. Being a collaborative process tends to make it more likely for them to want to use standards, though it is NOT a requirement per se.

      The problem is that most so-called 'open' source proponents seem to miss that their beloved 'open' source's popularity may have nothing to do with being 'open'. Too caught up in their ideology.
      Patanjali
  • Enterprise dosen't make their money from software

    software is just one tool in the box used to build their products.

    I take most of these stories with a grain of salt.
    William Farrel
    • They make most of it from licensing and support

      Then again, given that Microsoft relied on MVPs, somebody did wrong because Microsoft cut the number of benefits and rewards MVPs got... that was a couple years ago, but it's proof that what they choose to place value on is what counts...
      HypnoToad72
      • I thought the term enterprise

        encompassed companies like Boeing, GE, HP, Dell, Disney, General Dynamics Electric boat ect.

        I don't think those companies using closed source software is going to force them into extinction.
        William Farrel
  • Forrester: Give sound advice or go extinct

    I did not hear the broadcast. However, SJVN's synopsis makes it sound like Forrester is implying that if enterprises do not engage in Open Source, they will go bankrupt?

    This is highly unlikely and dubious. Enterprises need to engage in Enterprise Architecture. Whether the solutions derived are propietary or open source is immaterial. Adherence to open standards --- not necessarily open source -- is sound.

    However, SJVN's synopsis does not give any nuance. Should an enterprise engage in Asterisk instead of Lync just because Asterisk is open source? That is silly advice and is counter intuitive. Why should GM waste its valuable resources into making Asterisk work with its suite of collaboration tools and "contribute" back to the open source community.
    Your Non Advocate
    • Paula Rooney wrote this piece

      nt
      Rabid Howler Monkey
      • Good catch

        It read like an SJVN article, but without links. I would love to see the actual transcript. I have my reservations that an analyst would have made such blanket statements as described in this article.
        Your Non Advocate
      • More than a few, including yours truly, have done the same

        I think that there's room for both proprietary and open-source software. What's used in individual situations depends on requirements, internal IT skill set, etc.

        In addition, there is no single open-source business model. In some cases, the software is completely open-source and services provide the revenue source. In other cases, a less feature-rich version of the software is open-source and the feature-full version is proprietary, meaning that it contains some proprietary bits. And in this latter case, revenue can be sourced by software sales either with or without services.

        Nor is there a single open source license. In fact, there is much diversity among the various licenses.

        Saying that the end of proprietary software is at hand is nothing more than zealotry.
        Rabid Howler Monkey
      • Black Duck Software's products include the following:

        o Black Duck?? Suite???
        o Black Duck??? Protext
        o Black Duck??? Protex SDK
        o Black Duck??? Export
        o Black Duck?? Code Center???
        o Black Duck??? Code Sight
        o Black Duck??? Transact

        As near as I can tell, they're all proprietary products. So, supporting Black Duck Software's business model, which is a [u]very reasonable business model[/u], and simultaneously cheering the end of proprietary software is, shall we say, inconsistent. Software license management is important for virtually all organizations, whether they use proprietary software, open-source software or both. And as was reported in a recent piece by Paula, failure to keep tabs on the software components, proprietary and open-source, comprising one's applications can expose security vulnerabilities if security updates are not applied in a timely manner.
        Rabid Howler Monkey
    • Before you slag - maybe you should listen to what was said.

      What I said in the broadcast is that a combination of factors (consumerization, social collaboration, open source, scale out hardware, "X" as a service, and developer self provisioning have combined to make software innovation cost a fraction of what it used to just 10 years ago.

      Listen here: http://ht.ly/asN7m

      I also said that the millions of dollars that traditional enterprises and start-up companies spent to buy their own hardware and software outright creates less of a barrier to entry to new "digital upstarts" than ever. In fact this "legacy" is now becoming a boat anchor that keeps large firms from moving nimbly to compete with a new generation of entrepreneurs.

      If the enterprise does not begin to understand how to compete on the same plane, with the same tools, then they should not be surprised when digital upstarts take them down, like Amazon did to Borders, and Netflix did to Block Buster etc...

      Sure you may want to continue to invest in proprietary software, but don't be surprised if a "good enough" OSS solution allows a smaller company with less capital to invest to deliver a capability that satisfies your customers at a better price point.
      Jeffrey Hammond
  • Yah Right !

    What experience does Jeffrey Hammond from Forrester have in the Enterprise ? Please. There is nothing wrong with paying for good software. Who do you call exactly when you need support for open source stuff ?

    The sky is falling ! more adsurd predictions that will never materialize.

    After buying an Android tablet I have more appreciation for Windows. It's fun and portable but for doing serious work I will go on my desktop.
    pizzaman7
  • Been there done that

    GitHub? Crap.

    Eclipse? Crap. (though Flex Builder is less crap than most).

    TFS? Does the job and doesnt cost an extra 10 hours per week holding its hand.

    Visual Studio? What can I say? If you are not using Visual Studio are you even a Pro?
    ggibson1
    • Really

      I like TFS - it's a really good product.

      You may think GitHub is crap - I don't. They have already acquired more users than most other commercial SCM products that have been around for years. They have a great brand and a very loyal following of developers. There is a reason that many projects that deploy to PaaSes like Heroku and CloudBees use GitHub - it's because it makes rapid deployments easy. Checked their valuation lately?
      Jeffrey Hammond
  • Funny this.....

    As memory serves Forrester posted that Open Source was not a factor in business development -- http://blogs.forrester.com/mike_gualtieri/11-10-25-mobile_proliferation_killed_linux_hopes_for_world_domination

    Funny that, the big fish runs under Linux. Everday more servers run Linux. Yet Forrester is hedging its bets that Linux/Open Source is not a factor.

    I keep having less and less respect for Forrester consulting.
    maruadventurer