Proprietary vendors lose US$60B to open source
Open source software is successfully displacing proprietary applications in many large companies and eating into the annual revenues of proprietary software vendors by US$60 billion a year, according to research.
According to the study from the Standish Group called Trends in Open Source, released this week, the losses of proprietary software makers are disproportionate to the actual spend on open source software, which is a mere six percent of an estimated worldwide spend of US$1 trillion per year. The researchers put this difference down to the fact that a large proportion of open source isn't paid for, an intended result of the open source licensing structure.
"Open source software is raising havoc throughout the software market," said Standish Group chairman Jim Johnson, in a statement. "It is the ultimate in disruptive technology."
The study, the result of five years of research, states that if open source products and services were calculated at commercial prices, open source as a whole would be equivalent to the largest software company in the world, with revenues exceeding the combined income of Microsoft, Oracle and Computer Associates.
The open source community's programmer-hours, if added up, would place it as the largest software employer in the world, the study said. The firm found that open source software, once used primarily for low-level needs, has moved up the chain. Open source is often brought in to cover a project's basic requirements; creating a "baseline", using the terms of the report. But increasingly often, no further proprietary software is needed to fulfill more advanced requirements, the report found.
"IBM is threatened by open source SOA (service-oriented architecture) tools as many of them meet the full requirements enterprises look for," Rosenberg said in a commentary for ZDNet.co.uk's sister site, CNET News.com. "This baseline notion is interesting as products like JBoss used to be considered just for development with BEA for production, but over the last two years or so that sentiment has changed, with lots of JBoss in production."