[LINK] Open source: 'World's largest software company'

[Richard Chirgwin]

I spent a couple of hours trying to work out the assumptions of the 
Standish analysis. Regrettably that's not available for public 
consumption. So there's my antennae twitching straight away: "secret 
sauce" analysis can't be independently tested.

Because of the secret, I have questions but not answers. How is the 
"lost revenue" measured? How do the researchers distinguish between 
"open source replacing in-house development" and "open source replacing 
off-the-shelf software?" What's the simultaneous impact on development 
services?

RC

Bernard Robertson-Dunn wrote:
> Open source: 'World's largest software company'
> "The ultimate in disruptive technology" is coming up strong
> By Matthew Broersma
> 22 April 2008 15:48 BST
> http://software.silicon.com/os/0,39024651,39201838,00.htm
>
> Open source software is successfully displacing proprietary 
> applications in many large companies and eating into the annual 
> revenues of proprietary software vendors by $60bn per 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 per cent of an estimated worldwide spend of $1tr 
> per year. The researchers put this difference down to the fact a large 
> proportion of open source isn't paid for - an intended result of the 
> open source licensing structure.
>
> Standish Group chairman, Jim Johnson, said in a statement: "Open 
> source software is raising havoc throughout the software market. It is 
> the ultimate in disruptive technology."
>
> The study, the result of five years of research, states 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 
> company 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". But 
> increasingly often, no further proprietary software is needed to 
> fulfil more advanced requirements, the report found.
>
> The study states: "In many cases, especially in infrastructure 
> software, the baseline is a fully developed and working system. Many 
> applications and service components are fully functional and can be 
> used immediately. Other applications and components provide a firm 
> baseline around which to develop a more elaborate system."
>
> The Standish Group found 11 per cent of all new commercial software 
> requirements are satisfied by open source solutions and components. 
> That figure doesn't include application service providers (ASPs) that 
> use open source to service their clients.
>
> Such findings are a telling insight into the ways open source can be 
> seen as a threat by large software companies such as IBM, according to 
> Dave Rosenberg, chief executive of open source start-up MuleSource.
>
> Rosenberg told silicon.com sister site, CNET News.com: "IBM is 
> threatened by open-source SOA [service-oriented architecture] tools as 
> many of them meet the full requirements enterprises look for. 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."
>
> Original article: Proprietary vendors lose £30bn to open source from 
> ZDNet UK
> http://news.zdnet.co.uk/software/0,1000000121,39397439,00.htm
>