Burton Group: Open Source Software - Risks and Rewards
OSS is a threat to some vendors but a boon to others. It’s changing the business of giants such as IBM, Microsoft, Novell, and Sun, while offering new opportunities to startups such as MySQL and JBoss. OSS delivers new options while exerting pricing pressures on market incumbents.
There are several examples of OSS causing a market incumbent to change product pricing or packaging. For example, Microsoft offers Windows 2003 Server Web Edition for less than $399 to target the low-end web server market in which Linux and Apache have been quite successful. Microsoft also offers the Microsoft SQL Server 2000 Desktop Engine (MSDE 2000), a free, redistributable version of SQL Server for client applications. Microsoft has also been much more liberal in providing evaluation software, making it almost as easy to acquire Microsoft’s products as it is to acquire open source products. Macromedia recently announced a non-proprietary deployment license for its Flex server, which was driven, in part, by a competitor (Laszlo) releasing its presentation server under an open source license as OpenLaszlo.
Which vendors will survive the disruptive effects of OSS? To understand the impact of OSS on your vendors, it’s helpful to understand how they will compete in an OSS world.