Mobile ISVs face open source pressure
Independent software vendors (ISVs) in the mobile space face increasing pressure to build business models around open source, but need to weigh risks in adopting a suitable strategy, says analyst firm Ovum.
The likes of Nokia and Google are adopting an open source model for their mobile platforms, putting pressure on ISVs in the mobile space to move toward a similar strategy, Adam Leach, Ovum's principal analyst, said in an e-mail note Tuesday.
"ISVs need to be familiar with open source environments to be able to respond to demands to integrate customers' solutions into those environments," Leach explained. "In addition, OEMs (original equipment manufacturers) and operators will start to expect similar levels of transparency and collaboration on key areas of interest for them. As a result, ISVs will need to evolve their business practices to meet these new expectations, in some cases embracing an open source business model."
In adopting such strategies, ISVs would use an open source component or adopt an open source license for the product, he said. According to the analyst, ISVs looking to pursue an open source businesses model must consider their revenue generation and weigh the risks involved.
Leach noted that companies such as Google, Sun Microsystems and Nokia, derive their income not from software but from advertising, servers and handsets, respectively. As a result, making products open source pose fewer issues for these companies and little reengineering is needed.
"Adopting an open source license for an entire product development for a company that does not derive its main revenues from software royalty involves less risk," he said. "For a pure software vendor that derives all of its revenues from software licensing, the move toward a complete open source strategy has a greater amount of risk associated with it."
In addition, vendors that evaluate open source components for commercial development need to apply due diligence to assess the software and licensing conditions, said Leach. Such evaluation should include "detailed product analysis to determine if the software meets functional and non-functional requirements", he said. The ISVs must also benchmark their applications against tools from other open source and proprietary suppliers, he noted.
Support and indemnity are also important considerations, the Ovum analyst pointed out, adding that open source projects typically lack indemnity and provide limited support--in the form of forums posts by community members.
Depending on the importance of the open source component, as well as the level of expertise of their software engineers, companies could choose to engage specialized service providers or embark on open source projects themselves.
"If the component is of low value to the overall [application] or if there is limited technical knowledge of the domain, then a professional open source company should be considered to provide these value-added services," said Leach. "However, if the component is strategically important to the product, and there is sufficient technology knowledge of the domain within the company, then a direct approach should be considered by getting involved with the open source project and contributing to its ongoing development."