A recent blog entry by John Bennett posted the question, whether many open source vendors will continue to struggle, and some well-known vendors will shut down. This triggered some thinking on my side, as I hadn’t thought about this recently.

The question on whether companies can make money with open source has been discussed broadly and lengthy. And yes, there are many good examples of companies being able to make money and attract investors. We all know RedHat, JBoss, MySQL, SugarCRM, Alfresco, MuleSource to name just a few. Well, we do not know exactly how much money they are making, with the exception of RedHat of course. Many so called successful open source company actually just made money by selling the company. Obviously it takes more than a couple of developers, ideally working for free, and a good idea to come up with a convincing business model. And the current recession will even more clearly point out who the winners and who the loosers are. What is clear is that pure services revenue don’t drive very high margins and don’t create the interesting multiples VCs are hot on. What is also clear is that combining the open source and the proprietary software product model is a challenge. And, what we have learned the hard way is that sales and marketing is expensive and difficult to get right, even if we leverage all the cleverness of modern marketing 2.0 techniques. So, stay tuned. In 2009 and 2010 we will most probably see a major shakeout in this space. Only the strong ones will survive, not that different to other markets.

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What a year, how many surprises!

I wish all the Readers a Merry Christmas and a Happy New Year!

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2008 was an important year for Open Source and a successful one in addition. We have seen more adoption, more commercial success, more innovation, more collaboration and more options for the IT buyer. And it’s not the end, more success is still to come. The following paragraphs are summarizing what we have seen in the last 12 months.

Accelerated Adoption of Open Source
Open Source has clearly become mainstream for enterprises. Everybody from Gartner to IDC and to CIO.com published about the continuous adoption of Open Source by the Enterprises.
The financial crisis and the threatening recession helped to promote Open Source even more and position it as a recipe to deal with lower IT budgets.
Open Source adoption continued to be strong in Europe specifically. Germany, France and Spain alone can compete with the US in terms of adoption rates.
Security remained a major concern with commercial software and has driving adoption of Open Source alternatives such as Firefox on the cost of Microsoft’s Internet Explorer.
Finally forced the consolidation in the commercial IT world - e.g. Oracle buying BEA, acquisitions by IBM or OpenText in the ECM space, the consolidation in the business intelligence domain in general - many decision maker to rethink his technology choices and to look at Open Source alternatives.

Successful commercial Open Source
The leading open source vendors continued to prosper. Alfresco, SugarCRM, RedHat/JBoss, etc. all announced good progress and seemed to be continuously beating their business plans.
A quite large number of Open Source vendors have received additional funding, including OpenBravo, Alfresco, Optaros, DotNetNuke, SugarCRM, EnterpriseDB, GreenPlum, JasperSoft, Open-Xchange, Nuxeo, besides many others. The big question of course is for how long the cash injections need to last, given the difficult times in the economy.
For faster growth and more impact in the market, Open Source providers have acquired other companies and technology providers. Examples here are SpringSource buying Covalent or RedHat buying Qumranet.
Foundations continue to be a key driver for sustainable open source development. Outside of the well known established foundations such as Mozilla or Apache, the Django Software Foundation was established to foster the development of Python based web framework Django.

Open Source Enterprise Content Management of high interest
Even more than in the years before Open Source Content Management Solutions have been pushing back their commercial alternatives.
Web 2.0 and Enterprise 2.0 initiatives in large companies more and more involved evaluations of open source stacks (i.e. Alfresco, Liferay, Drupal, etc.)
The interest of IT decision makers can also be interpreted from the fact, that the top 3 technologies researched on EOS Directory in 2008 are all Open Source ECM solutions.

Innovation and pushing the envelope by Open Source
In 2008 we have seen a number of influential new releases of top ranked open source projects: Firefox 3.0 (8.3 million downloads in 24 hours), Open Office 3.0 (almost 18 million times downloaded in less than two months) to name just two.
Exciting new open source projects were launched, such as Google Chrome (browser) or DimDim (web conferencing).
The rise in interest in mobile business application can be clearly attributed to the success of Google Android and its proprietary alternative iPhone, that for whatever reasons is also loved by many Open Source geeks.
With the success of cloud computing a number of relevant open source technologies surfaced, such as Eucalyptus, Globus Nimbus, RESERVOIR, OpenNebula, etc.
It was a productive year with no doubt. More than 80% of all projects tracked on EOS Directory published new releases, many of them multiple times.
Open Source communities have continued to produce and invest, as a matter of fact twenty-three percent of all downloadable Open Source code was released or renewed in 2008 according to some research of Blackduck

Open Source and Open Standards
Open Standards have again received strong attention, are still rising in importance and are heavily supported by Open Source. At the same time Open Standards are driving interest for Open Source technologies: CMIS and the fast adoption by open source players such as Alfresco, Magnolia or Joomla is one example. OpenID was adopted by large players such as Google, IBM, Microsoft, VeriSign and Yahoo!. Microsoft finally decided to support OpenDocument format. New standards such as openAuth, DiSo, OpenSocial are generating more and more interest.

Traditional commercial vendors adopting Open Source
If you can’t fight them, join them. We have seen a number of acquisitions of open source companies by traditional IT vendors. Sun acquired MySQL and bought VirtualBox (Innothek), Novell acquired SiteScape, etc.
Many commercial vendors tried a hybrid strategy, among them Iona or Nokia who acquired Symbian/Trolltech), Microsoft putting more emphasis on Open Source with CodePlex and the (osi certified) Microsoft Public License, Adobe (opensource.adobe.com), BT (acquiring Osmosoft, striking a large deal with SugarCRM).
Some vendors were opening their software for enlarged market reach, i.e. Oxid eSales following the example of Ingres and many others before.

Solving the Support “problem”
Support, seen as one of the barriers for Open Source adoption in the past, has become less of an issue over time. With self support offerings, as promoted by Sourcelabs for example, new options for the IT buyer increase the already well established choices. New companies focusing on services around specific technologies receive both funding and customer interest, such as the company Acquia offering software bundles, extensions, support and professional services around the Open Source technology Drupal.

Hopes that remained unheard
Not all wishes were fulfilled in 2008. There is still no modular mainstream java based CRM platform, we still see no clear winner in the Content Management domain, actually there have been more options added during the last twelve months than removed. There’s no single leading technology visible to develop Ajax applications or to implement portals. And there are still too many choices for web programming frameworks the confused enterprise developer is confronted with. And, did we really need yet another internet browser? But choice is always better than monopolies, so let’s continue to be “open”.

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Doing some analysis of the EOS Directory listed projects and user feedback in terms of implicit popularity feedback (project page views) we came up with the following interesting correlation between Popularity and Excellence:

There clearly seems to be some correlation between the excellence/quality of Open Source projects and the popularity on EOS Directory.
So “being better” pays off in Open Source. Well, this is what you expect anyway, right. Interesting though is the category “business applications”. As analyzed in an earlier blog entry, business applications are clearly the most popular on EOS Directory, despite their partially less excellent ratings. However the need for alternatives to the incumbent proprietary technologies is so big, that enterprises more and more look for Open Source options here, pushing up the popularity of this category.

On the EOS home page the most popular five projects are listed, but this is basically the ranking since the creation of EOS Directory. But what are the most popular 20 projects of the last 12 months?

# Project
1 Nuxeo EP 5
2 KnowledgeTree
3 Alfresco
4 Pentaho
5 vtiger CRM
6 Darwin Kernel
7 Nagios
8 phpBB
9 Apache
10 Tomcat (Apache)
11 MySQL
12 PostgreSQL
13 SugarCRM
14 Drupal
15 Python
16 Trac
17 Lucene (Apache)
18 Java
19 Zimbra
20 Django

This list actually tells a lot. Not only represent these 20 projects almost one third of all the “project page views”, the popularity also shows the interest in specific categories and subcategories in EOS Directory. Clearly, business applications and in particular Enterprise Content Management and CRM are very popular. The fact that 40% of the projects are business applications clearly shows the interest of enterprises in deploying these in their business. This is clearly a change compared to 2006 or 2007. And of course the financial crisis and the recession “help” here. The three most popular projects are all ECM technologies, this is telling as well.

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Over the last week EOS Directory has been updated by adding the most recent learnings from projects and research. Never before an Open Source Directory for Enterprise usage has been more relevant and needed! EOS is THE resource to help enterprises make more of their IT budgets during the expected downturn.

EOS Directory has been around now for quite some time, exactly 16 months actually. In the last 12 months, over  249′000  projects have been investigated on EOS directory and there’s quite a bit of anectodal evidence that people find EOS Directory valuable as a research resource.

Today EOS lists over 350 projects (up 52 since a year ago), for example 8 application servers, 30 frameworks, 11 programming languages, 7 rules engines, 17 systems management tools, 24 CRM/ERP/eCommerce solutions, 28 ECM solutions, 7 ETL toolsets, 4 search engines and 6 business process and workflow management platforms. The category application development and infrastructure seems with 151 projects and an average enterprise readiness rating of 2.4 to be the most mature, 31 infrastructure solutions with an average enterprise readiness of 2.0 and 98 business solutions with an enterprise readiness of 1.9 document that here’s room to catch up. Interestingly the “business solution” category seems to be the most interesting one for the visitors, with more than 1′300 project detail views per solution since the beginning of EOS Directory.

To add some statistics: During the last 12 months 64 new projects were added, 11 were removed (Celtix M2A, Centric CRM, ERP5, Ferret, jEDit, JFreeReport, Majordomo, OpenFTS, OpenRico, PostNuke, Xfire). 288 are still the same as 12 months before and 254 of these (88%) developed further (changed release number). 61 projects have a higher overall rating than before, 52 a lower one, 14 improved their “trend rating”, while 31 received a more negative trend rating than before. We list 19 4-Enterprise-Readiness-Stars, that’s 5% of all projects and includes Apache webserver, Tomcat, MySQL, Python, Java, PHP, Hibernate, Jboss AS, Spring, RedHat and Suse Linux, Firefox and jQuery.

So, let me end this message, saying THANK YOU to all who helped making EOS Directory a valuable resource and keeping it updated! And this includes both the consultants at Optaros, industry experts with valuable input and feedback, as well as the visitors and users of EOS Directory.

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While EOS Directory is an online resource, many people like offline resources and easy to consume “catalogues”. For the last three years we have published the Open Source Catalogue on an annual basis. We started with 250 projects, the latest 2009 edition now lists more than 350 projects. The ratings and descriptions (translated) are taken from EOS Directory of course. The Open Source Catalogue 2009 also includes an introduction on how Open Source is influencing Enterprise IT. As said it’s written in German and available as downloadable PDF document.

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Many WordPress bloggers, myself included, have been eagerly awaiting the impending release of 2.7. It’s already in its third beta release (the current 2.7 Beta 3 was released on Nov. 15th) and should be ready for production release toward the end of November.

Jane Wells posted this video to show off some of the features coming in 2.7, including a significant dashboard redesign:

The WordPress community and Automattic have always done a great job of getting behind the project not just with code contributions but also with “marketing” contributions, helping spread the word about new releases and new features.

What if every significant new release of an open source project came with an embeddable, distributable video screencast walking through the new features? Might lead to better upgrade activity across the community.

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During the last five years Open Source has made an inroad into the modern Enterprise IT and many companies can’t imagine living without it anymore. The Open Source eco system has continuously developed making it easier and easier to identify research and introduce Open Source technologies. Optaros has just published a White Paper “Open Source in the Enterprise” that summarizes the history of Open Source and the reasons why Enterprises have adopted many of the technologies. It also gives Enterprises a quick overview on what makes Open Source so powerful and what it means to leverage the benefits of Open Source.

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The news is full of reports on the financial crisis, recession fears and economic downturn symptoms. CEOs and CIOs are preparing for a serious negative impact on their business. Initially the problems were with financial institutions only, but more and more the issues are hitting larger audiences. Will IT buying centers and business managers cut investments in IT in general or how will they deal with the crisis?

Let’s start with some facts and hypotheses:
a) Internet usage has increases continuously over the last years and the probability that consumers will cancel their broadband subscription and/or reduce their time spent online is very low. The contrary will happen, more bandwidth and more time in front of the browser, to more carefully select the right products to buy, to find jobs, to network with colleagues and friends, etc.
b) Companies recognize the importance of the online channel as an information, communication and transaction mean. To cut cost here and to not invest anymore seems to be a very dangerous strategy. Even more enterprises will want to shift activities from the offline into the online world to save costs. This will ask for more, not for fewer investments. And this is not really optional, it will be mandatory in many industries, as if you don’t do it somebody else will run faster.
c) IT budgets in general are expected to grow next year, according to recent research from Gartner. This makes sense, as IT isn’t any more a supplement to business, it’s often the business itself! But even if IT budgets grow more time more brain power will be spent on how and where to spend the money. And for some markets the budgets are expected to shrink even.

Now, where does Open Source come into the game here?
Firstly, Open Source technologies are defining the pace in the internet arena. Not just Google, Yahoo or YouTube are betting on Open Source, also more traditional enterprises in the telecommunication, pharma or media sector are voting for Open Source for internet solutions. Content management is almost dominated by Open Source technologies such as Alfresco, Drupal or Typo3. enterprise portals are often built with JBoss or Liferay these days, programming languages/frameworks such as PHP/Symfony, Ruby on Rails or Python/Jango are the base of many of the websites people use everyday.
But there’s more. Open Source components are offering an enormous potential. Business solutions can be assembled in short timeframes at low costs, the investment focus can be put on the functionalities that really differentiate the company in the market or make a solution really efficient to use. With implementation approaches such as the Optaros Assembly Methodology (OptAM) agility and “perpetual beta” can be brought to the enterprise and existing systems and platforms can be integrated just like other components, preserving previous investments and delivery business benefits quickly.
Don’t make the mistake to associate Open Source only with “free” and “low cost”. Yes, substantial cost savings are possible, but even more, new initiatives can be started without large upfront investments and pilots can be implemented rapidly to test markets or customer reactions.

If you haven’t thought about Open Source based business solutions yet, it may be a good time to reconsider. Specifically in these days, agility, cost efficiency and time-to-market pay off – for the company, but also your own career.

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It was a big week for the Drupal project last week.

First, Acquia Drupal came out of beta and publicly launched. Second, Angela Byron announced the first release of Drupal 7.0-unstable.

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