Slide 1

Bailing Out Your Business with Open Source

Open Source Forum 2009

Matt AsayVP, Business DevelopmentAlfrescowww.alfresco.com

First, the Bad News

Times are tough

Moats to clean...

Duck houses to be maintained...

Horse manure to buy...

Helipad hedges to cut...

Dogs to feed...

Christmas trees to trim...

Second home payments to make...

And more....

2008 was bad;
2009 may be worse

Getting worse (Gartner 2009)46% of CIOs chopped their Q1 budgets 90% of these cut by at least 7%

Mostly head-count reductions and vendor renegotiations to achieve cost targets

Server sales dropped 25% in Q1 2009

But all is not as it seems...

The economys silver lining

Open source interest is growing

69% maintaining or increasing open source investments.

Less money (means more open source)

Source: GartnerNumber of respondents = 274; Mean summary: Three responses allowed.Survey Question: Select your organizations top three most important reasons for using open-source software. Respondents were asked to select the top three most important reasons for using OSS software. This slide contains a summary of those results.Consistently across all eight countries, lower total cost of ownership (TCO) and reduction and development of cost-prohibitive projects were major factors for selecting OSS. This clearly indicates these areas are highly cost-sensitive. Another strong reason for using OSS was that it makes it "somewhat" easier to embark on new IT projects or software initiatives. This, too, was indirectly driven as part of cost arbitrage.In interviews and conversations at various events, many attendees indicated that they also use OSS as investment protection against a single vendor "owning" the entire IT department. Managers use several vendors by design; however, with the large number of acquisitions during the past few years, many multivendor IT shops now include only one vendor. Most managers agreed that a single-vendor IT shop was a bigger risk than using OSS alternatives, even in mission-critical applications.Respondents also indicated that the major business reasons for using OSS projects and components were faster time to market, with reduced R&D costs (with no need to reinvent the wheel). Users indicated they are able to locate quality components to address niche problems quickly and easily. This faster time to market better positions them to meet the unique demands and requirements of internal and external customers and, in many cases, provides the ability to avoid complex procurement rules and procedures.

Why? Because open source
works as advertised

87%92%86%82%84%82%91%

But Isnt Open Source a Fad?

Open source is now a question
of how, not whether

The question is: What will you do with it?Whether measured in terms of lines of code added or new projects,open-source growth is phenomenalSource: Dirk Riehle, SAP

Open source is mainstream

Source: Gartner 2008Number of respondents = 274; Multiple responses allowed.Survey Question: Do you use, or plan to use in the next budget year, an open-source project or product as an alternative to commercial software?

Across product segments, 100% of enterprises will use open source by 2010.

Better quality, more innovative
software at a much lower price

Open source software solutions will directly compete with closed-source products in all markets.

85% of enterprises currently use OSS (The rest are lying)

45% use OSS for mission-critical applications (Continues to grow)

Why?

65% say open source has sparked innovation inside their companies

67% for lowered costsLower TCO and flexibility to launch and develop cost-prohibitive projects continue to be top reasons for using OSS

81% for better quality software

Sources: Gartner (2008), CIO Insight (2006), IDC (2006)Open source produces better software.

24/07/06

Open source handles
the important workloads

Open source is becoming the heart of enterprise computing

This Is Open Source's Market

Open-source business models
are right for 2009

Global support (24/7/365)

We handle serious mission-critical applications and scale

We respect customers' time

Only ECM experts in support

We respect customers' money

We deliver value or you dont pay1/10th the cost of Documentum;

1/3rd the cost of SharePoint

Simple per-CPU pricing

We fairly allocate risk

Subscription model

Try before you buy

Benefits of open source without the obligations

The open-source model lowers risk

Most IT projects fail

Open source de-risks software acquisition:Try before you buy

Stop your subscription if the vendor stops providing value

Dramatically lower cost

Worst case:Project dies and youre out $xx,xxx or $xxx,xxx, not $x,xxx,xxx

IT project failure becomes less probabilistic and less painful

This isn't to say you're on your own

Time Who has time to write (lots of) free software?

Answer: Those that are employed to do so

InterestWho will take out the trash?

AptitudeThe higher up the stack you go, the fewer the developers

Familiarity with projectPoor documentation makes it hard to understand a project

Monolithic code base takes time to learn (Most wont bother)

So what will this do to your proprietary vendors?

Their response? Less choice

IBM acquires FileNet

Oracle acquires Stellent

Sun aquires MySQL (only to be acquired by Oracle)

Autonomy acquires Interwoven

email | matt.asay@alfresco.com

twitter | twitter.com/mjasay

blog | cnet.com/openroad

09.06.09

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