Post on 25-Dec-2015
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Helping Clients Navigate Open Source Challenges
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Why Your Future Depends on Open Source
IT Economics Will Drive Open Source Adoption
Bernard Golden
IT Visions Webcast Series presents
Helping Clients Navigate Open Source Challenges
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Today’s Topics
30k Foot View of Open Source
Trend #1: IT Budgets Drive Open Source Adoption
Trend #2: Commercial Software Companies Look Like Open Source
Trend #3: Competitors Drive You to Open Source
Open Source Recommendations
Helping Clients Navigate Open Source Challenges
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30K Foot of Open Source
Commercial Software– Closely held intellectual
property
– Bundled offering: explicit or implicit
– Active Vendor, Passive Customer
– Key Challenge: Selecting right vendor
– Key Issue: Signing right contract
Open Source Software– Widely shared
intellectual property
– Unbundled offering due to OS economics
– Active Customer, Passive Vendor
– Key Challenge: Selecting right product
– Key Issue: Assessing product maturity
Copyright © 2004 Navica. All rights reserved.
Helping Clients Navigate Open Source Challenges
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Trend #1:IT Budgets Drive Open Source
Adoption
Helping Clients Navigate Open Source Challenges
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IT Budget Trend Over Past 30 Years Information Technology as Percentage of Equipment and Software Capital Investment
1970 - 2003
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02
Source: Bureau of Economic Analysis
Helping Clients Navigate Open Source Challenges
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Future IT Budget Predictions
IT budgets will grow at no more than GDP expansion: 2 – 4% per year
Demand for IT will continue to grow: SarbOx, WLAN, RFID …
Corporate Management wants business functionality from IT
IT budgets are a zero-sum game, so …
Ask your question by entering it in the box to the right and clicking “Submit.”
Helping Clients Navigate Open Source Challenges
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Future IT Budget Predictions
IT MUST find a way to shift costs within software infrastructure
Commodity infrastructure shifts to open source
Investment focuses on business ROI
Innovation moves to the edge
Ask your question by entering it in the box to the right and clicking “Submit.”
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Helping Clients Navigate Open Source Challenges
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Trend #2:Commercial Software Companies
Look Like Open Source
Helping Clients Navigate Open Source Challenges
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The Future of the Commercial Software Industry
Some recent events in commercial software
June, 2003: Oracle announces hostile bid for PeopleSoft
“We’re going into a phase of consolidation …. You have to figure out who gets bought and who just evaporates.” – Larry Ellison
Source: Fortune.com
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Helping Clients Navigate Open Source Challenges
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The Future of the Commercial Software Industry
Some recent events in commercial software
May, 2004: Cost reductions come to the software industry
“Microsoft is reducing health benefits, vacation time, and employee stock purchase discount, as well as travel and entertainment spending.”
Source: CFO.com
Ask your question by entering it in the box to the right and clicking “Submit.”
Helping Clients Navigate Open Source Challenges
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The Future of the Commercial Software Industry
Some recent events in commercial software
June, 2004: Oracle/PeopleSoft Antitrust Trial
“Oracle offered discounts of up to 90% as a way to compete with rivals.”
Source: San Francisco Chronicle
Helping Clients Navigate Open Source Challenges
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The Future of the Commercial Software Industry
The Question of the Hour
July, 2004: Steve Balmer speaks to financial analysts
“Will software be a business that generates a lot of profit in the future? Is open source essentially a disruption that will cause the software business to be less profitable?”
Source: Information Week
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The Future of the Commercial Software Industry
Much lower margins Obvious gains: cheaper software Some not-so-obvious losses: free services,
advertising, white papers, sales engineer visits, analyst coverage
Commercial software increasingly will be an unbundled offering like open source
Implication: You will take on more integration responsibility
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Helping Clients Navigate Open Source Challenges
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Trend #3: Competitors Drive You to Open
Source
Helping Clients Navigate Open Source Challenges
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Examples From History: Automobiles 1900 – 1920
Helping Clients Navigate Open Source Challenges
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1913: Ford Invents the Assembly Line
Helping Clients Navigate Open Source Challenges
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The PC Industry
Manufacturer
Distributor
End user
1980s 1990s
Helping Clients Navigate Open Source Challenges
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Open Source Case Study #1
Merrill Lynch SOA– Goal: Make data from legacy systems available to new
customer-facing applications
– Original Solution: proprietary EAI product, budget $800K
– New Solution: Open Source Web Services
– Final Budget: $30K, 4% of original budget
Ask your question by entering it in the box to the right and clicking “Submit.”
Helping Clients Navigate Open Source Challenges
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Open Source Case Study #2
QuinStreet– QuinStreet: Online Direct Marketer
– J2EE-based application infrastructure
– Original Solution: upgrade to latest WebLogic: $500K license, $75K mtc/year
– New Solution: Migrate to JBoss
– Final Budget: $0 license, $50K mtc/year
Helping Clients Navigate Open Source Challenges
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Open Source Case Study #3
Sabre Holdings– Goal: Better understand online booking patterns by creating
1.2 Tb Data Warehouse
– Original Solution: proprietary DW software, budget $500K
– New Solution: Create DW with MySQL
– Final Budget: $50K HW/$0 license
Ask your question by entering it in the box to the right and clicking “Submit.”
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Helping Clients Navigate Open Source Challenges
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Recommendations
Helping Clients Navigate Open Source Challenges
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Running IT in an Open Source World
Plan for a steady-state, zero-sum world– Shift investment from infrastructure to business functions
Examine vendor portfolio– Trim vendor list
– Stick with leaders, avoid second-tier and startup vendors
– Share info with peers to gain negotiating leverage
Ask your question by entering it in the box to the right and clicking “Submit.”
Helping Clients Navigate Open Source Challenges
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Running IT in an Open Source World
Recognize that open source will transform competition
– Plan for unbundled world
– Seek open source pilot projects
– Jump before you’re jumped
Helping Clients Navigate Open Source Challenges
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More Resources
SearchEnterpriseLinux.com Succeeding with Open Source, Bernard Golden,
published by Addison-Wesley View “Open Source Beyond Linux” Webcast on
SeachEnterpriseLinux Questions: Post to follow-up forum (by using the
Ask a Question box on your screen) or direct to bgolden@navicasoft.com
Helping Clients Navigate Open Source Challenges
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Questions
Ask your questions now by using the Ask a Question box on your presentation screen.
Bernard Golden
Visit Bernard on TechTarget’s Expert Answer Center
(ExpertAnswerCenter.com), where he will be answering more questions on open source
alternatives and writing a daily blog from Nov. 8-21, 2004.