For many years, pundits have anticipated seismic change from open source. Beyond the high-profile changes, the effects of open source can be seen everywhere in software development today. While still an emergent phenomenon, there are cost, revenue and intangible benefits for any company that becomes an active consumer and contributor to the open source community now.
Cost/Benefits of Consuming Open Source
Through open source, a wealth of frameworks, tools and other intellectual property (IP) are available. While not always free for commercial use, their cost is typically below that developing proprietary solutions. Clearly, the ability to apply code that solves part of a problem is going to save time and money by eliminating the wasted effort of repeatedly solving problems. For example, applying frameworks like Cocoon and Waffle allow companies to benefit from established architectures for web-based applications. Not only
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does this reduce the need to invest in the development of architecture, these frameworks engender low maintenance, highly reusable business code. They are also written to a very high coding standard and have been tested in a wide variety of situations, providing scalable, high quality components.
A less obvious cost/benefit is that open source frameworks, being widely available, will be in more developers' hands. This creates a population of developers familiar not just with the patterns and concepts (e.g., dependency injection) but the most popular implementations of those patterns (such as PicoContainer). Recruiting from a developer population fluent in existing code reduces both time and cost of onboarding developers.
Just as there are frameworks, there are a number of robust, industrial strength open source development tools, such as Selenium and CruiseControl. These tools enable best practice adoption (such as automated application testing and continuous integration), contributing to greater developer effectiveness. Once again, the open source nature of these tools puts them in the hands of a wide population, meaning greater familiarity; this, in turns, lowers the cost of onboarding new employees and lowers the cost of maintaining best practices.
In sum, the reduced time to onboard developers, the elimination of waste and the low cost of enabling best practices make a dramatic impact on IT agility.
Revenue Benefits of Contributing to Open Source
Beyond cost benefits, an organization can also enjoy new revenue streams from incubating open source initiatives. While not capitalizing or reselling intellectual property might seem anathema, for many companies there are significant revenue benefits to be realized.
Open source tools, frameworks and other forms of IP quickly achieve a critical mass in the market that a commercial tool cannot. For small firms, commercializing IP is not typically feasible: small companies aren't prepared to support and evolve a product, there is buyer reluctance from purchasing a proprietary tool from a small provider, and there is the lack of marketing and promotion. Open source, by contrast, stimulates rapid availability, leading to experimentation, and subsequently adoption of the IP and creates "updraft" for a fledgling tool or framework. For supplying companies, this sets the stage to drive revenue. While certainly an avenue for small companies, it is just as viable for the large: witness Sun choosing to open source the Solaris operating system.
With critical mass achieved, there are the obvious revenue streams of service and support packages, such as those available for JBoss and Linux operating system variants. Less obvious are "reputation-based relationships." Open source offers a channel to build business relationships that is less costly than other forms of marketing, specifically because it gives credibility to an organization responsible (or in strong support) of an open source stack, if not with buyers than with key influencers in a customer organization. Although confidentiality prevents disclosure, relationships with these credentials provide greater opportunity for high-value work than mass marketing.
In the same way, sponsoring open source initiatives also contributes to partnerships and alliances: a robust, open source solution becomes attractive to a variety of firms to build complex solution offerings. A notable example is the relationship between MySql and Business Objects.
In each example, the core piece of open source can drive strategic revenue opportunities aligned with the core competency of the progenitor that far outweigh any economic benefit lost around "opening" the core IP.
The Intangible Benefits
More features, greater transaction volumes and greater complexity are built into today's software. Despite advancement in tools and processes, development still comes down to people. As a result, the more critical software is to a business - a consumer, product vendor or consultancy - the more important it is to have the best core of developers possible. Open source contributes to attracting the "best and brightest" in two important ways.
First, challenging developers to not just consume but contribute to open source encourages them to abstract the work that they do. This drives out more robust solutions to complex problems and environments and, more importantly, has the effect of raising the bar for members of a development organization. This creates a training outlet and learning environment that reinforces "continuous improvement" as an organizational value.
Second, in a highly competitive employment market, organizations must offer more than salary and benefits and career objectives: they must be seen as fulfilling goals, such as improving the software development profession. By sponsoring and incubating open source initiatives, a firm creates opportunities for its employees to achieve these goals and positions itself as a destination employer, attractive to leading candidates.
SOA: The Open Source Economic Case Study
One area where this is particularly true is service oriented architecture (SOA). Conceptually, SOA is a target future state and not simply a messaging protocol or product stack. In making the change to this architecture, it is possible for a firm to enjoy the cost, revenue and intangible benefits mentioned above. Specifically:
SOA solutions can be built from relatively available open source components, giving organizations the ability to begin SOA prove-out and adoption with minimal infrastructure investment;
Companies that contribute open source components to the SOA community are able to position themselves as thought leaders amongst prospective customers; and
SOA is an emergent, interesting area of technology: being recognized as a thought leader in the SOA space will position an organization as a destination employer among top engineers.
The Legal Ramifications
Clearly there are legal ramifications which are not addressed here, most specifically the policies and practices which must be established and well communicated so as not to violate open source licenses or expose an organization to liability for code committed. Without oversimplifying the issue, such policies and guidelines are increasingly well defined, and easily and inexpensively implemented.
Conclusion
Many companies today can point to (and even quantify) the benefits outlined above, especially as they contribute to organizational agility through elimination of waste, continuous improvement and more efficient time-to-market. Think about the functionality in your portfolio that could be open sourced today, and where it could lead in short order: industry standardization and lower software costs, complex business solutions through partnership with companies not previously considered and being a sought-after employer. With organizational commitment, benefits are achievable by almost any company.
About the Author
Ross J. Pettit has over 15 years experience delivering complex development projects and managing multi-national operations as a developer, manager, and consultant. He holds a BS in Management Information Systems and an MBA. He is currently consulting to global clients implementing Agile practices as a Client Principal with ThoughtWorks.
