Open source enterprise software shakeout

Open source enterprise software shakeout

Summary: Businesses are subject to pressures that projects may not be. What happens to projects, and to software, as the enterprise open source market consolidates?

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While poring over reaction to Vignette's acquisition by Open Text, there was one dog that did not bark.

There was no gloating from the enterprise open source folks.

Why? Probably because the enterprise open source business, especially the content management end, has problems of its own:

  1. Vendors are under pressure to scale so they can pick off Vignette's old customers, not to mention those of Interwoven, which was acquired earlier by Autonomy.
  2. The same economic downdrafts that created the Vignette take-out are also hitting the open source space, in spades. After all, their "customers" don't have to pay, while Vignette's do.

Notice the word "vendors" in the first bullet point. As opposed to projects. Whenever a project sponsor incorporates and seeks profit it becomes a vendor, subject to a vendor's pressures.

Drupal can live on the kindness of strangers, in other words. Acquia can't.

This may explain why our own Matt Asay (above), instead of noodling over the opportunities Enterprise Content Management (ECM) consolidation may hold, is instead watching John Robert's exit from SugarCRM, and offering no discouraging words.

Matt is an executive with Alfresco, another open source enterprise software outfit. His loyalties lie in the corporate world, while mine remain tied to journalism.

Open source advocates, as opposed to businessmen, did once have a bone to pick with Roberts. The controversy over "badgeware" was eventually finessed through approval of the Common Public Attribution License, but for a while some were wondering whether SugarCRM was open source at all.

That is all water under the bridge now, but the question remains, how big can open source enterprise outfits get? It's unlikely that more than a few will be able to brave the current headwinds and scale their support operations to where big customers need them to be.

Will the rest of the pack then simply fade away? That's what happens in the real world of business. There is only room for a few big businesses at the top of the mountain.

And, again, Acquia is a business, just like Alfresco is a business. Businesses are subject to pressures that projects may not be. And when the business built around a project fails, or gets absorbed, what happens then to the project underneath it?

I have been asking that question a lot regarding Oracle and such projects as OpenOffice, but it's even more meaningful to business software projects than those in the consumer space.

What happens to projects, and to software, as the enterprise open source market consolidates?

Topics: Open Source, Enterprise Software

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11 comments
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  • No shake out here

    I see FOSS doing very well while M$ is 'shaking' thousands of jobs every quarter.
    The FOSS strategy is working!
    Linux Geek
    • You know nothing about business!

      MS's move is a dangerous sign to become stronger, while Sun is really the final result of over "open source".
      Gladiatorcn
      • You know nothing about Sun

        Sun was dying for years. It tried Open Source to save itself, but it never actually went all the way there and continued to bleed arterial blood every quarter.

        It's the end result of holding onto the high-end workstation and server market when that market has shrunk every year since the turn of the millennium. Sun went from a influential hardware company to a small hardware company to a buyout candidate.
        daengbo
        • What open source did for Sun

          It kept them from becoming Silicon Graphics.
          DanaBlankenhorn
  • I didn't blog it because...

    I couldn't. I have too much skin in that game. But if you check Twitter, you'll see that I had plenty to say. Vignette has been dying for years. We've hired the best of its sales engineers, and look forward to hiring more people from its ranks. Vignette had good people: it just had a crappy strategy (strand its V6 customers with a forced migration to V7 that many customers opted not to take).

    It's true I'm not an unbiased journalist. But this one was too close to home for me to be able to comment on for CNET.
    mjasay
    • I understand

      I refuse to comment on Katie Couric's hairstyles
      for the same reason.

      That's a joke. I understand the need to keep
      quiet about things that are close to you and let
      others take the lead.

      I have stayed away from writing about the
      business my wife works in for over 25 years.
      Except to say I know her work is very hard.

      I respect your decision in this.
      DanaBlankenhorn
  • RE: Open source enterprise software shakeout

    We spoke with John Roberts 3 years ago and he did not seem very open to us.

    The recent price hike at SugarCRM explains the increased interest in companies migrating to SplendidCRM. With a nearly identical schema, the migration is very easy.
    paul@...
    • That's called competition

      I love competition. The more competition the
      happier I am. I am happy that Splendid and Sugar
      are competing so fiercely.
      DanaBlankenhorn
  • Size of commercial open source companies has lower limit

    Compared to an old-guard proprietary company a commercial open source company aims to make 80% less revenue from 99% less of their install-base.

    Taking two companies with the same revenue - one proprietary and one commercial open source - the commercial open source company will have an install base about 500 times larger than the proprietary one.

    Taking two such companies with the same install-base, the revenue of the commercial open source company will be lower. That's the whole point.
    jimmyed2000
    • You may be right

      Trouble is that once the business model starts
      working people demand it. Consumers now
      understand that you don't have to upgrade your
      applications every few years, at $2-300 each
      time. And you don't have to upgrade your
      operating system, either.

      The only things being upgraded are anti-virals
      and similar security tools. Yet Linux doesn't
      even require these tolls...
      DanaBlankenhorn
  • The open source project continues on...

    One of the advantages of open source is that all the escrow issues that customers of proprietary companies have are not nearly as big an issue.
    jimmyed2000