Monday, March 23, 2009

CIOs Should Meet Open Source Half Way

The fourth annual Open Source Think Tank event, held earlier this month in Napa Valley, brought together some of the best ideas and thinking in open source software. While listening to the CIO panel, I stitched together a number of conversations I’ve had during the past few months – and realized the most vanguard CIOs (and IT organizations) recognize the real advantages of the open source software model and integrate these solutions into their businesses.

The CIO panelists emphasized that open source commonly suffers from misperceptions that prevent serious consideration of the products. The solution they offered is for open source vendors to spend more time and money courting them, much like the aged, proprietary companies with whom open source vendors, now more than ever, compete. While I agree with (and appreciate) their feedback, I disagree with their proposed remedy. And, here’s why.

About one month earlier, I received a call from the CIO of a multi-billion dollar technology company who nicely summarized the predicament facing all IT organizations. While lamenting the 80% of his budget dedicated to maintaining legacy systems, he was struggling to find ways to reduce costs and increase innovation. To make matters worse, he just received his annual maintenance bill from his long-time (proprietary) BI mega-vendor and the amount increased from 20% to 22% of his original license price, adding meaningfully to his “80% problem.” Subsequently, he offered his summary:

“I’ve come to realize that the traditional software industry pricing and packaging model is fundamentally broken. I spend huge sums on license fees, services and support in advance of even knowing if the complicated software is going to provide the return I’ve been promised. I bear all the risk.”

The transparency, greater simplicity and enormous cost-savings of open source software solves his business problem. CIOs and open source vendors have a complementary relationship because IT team’s can wade into the technology at their own pace, learn about a product‘s capabilities and even put it into use, before any money is spent on license, services or support. In this sense, the return on the prospective use of the open source product is known before any investment occurs (not including the time and energy of the internal IT team) – which fundamentally rights the upside down model we’ve become accustomed to during the past 40 years.

So, I’ll assert that commercial open source vendors are the most closely aligned with the IT organization and it’s time for CIOs to take proactive steps to learn more about open source alternatives. This is where I disagree with the suggestion of the CIO panel at the Think Tank event. If open source software companies ramp up sales and marketing to behave like the dated, proprietary vendors, the significantly higher costs would reduce some of the advantage we pass along to customers. Instead, I urge CIOs and IT staffers to make it their job to learn more about open source software and reach out to those vendors who are best aligned to help them reduce their 80% maintenance cost problem and finally get back to innovating, much like the CIO that contacted me.

Brian Gentile
Chief Executive Officer


  1. Amen and preach it, sir.

    We are slogging through demos by administrative enterprise system vendors now (SunGard, DataTel, Oracle, et al.) now. SunGard, in particular, brings up their own "community source" initiatives as a selling point.

    Barring a large and unexpected infusion of funds, I expect we'll be looking again at alternatives like OpenEAI and Kuali.

  2. Jeff,

    Good luck with the enterprise vendors (Sungard embeds Jaspersoft in some of its apps, btw).

    Depending on the specific functionality you seek, you may want to consider MuleSource for open ESB and some app integration capability as well as Compiere and OpenBravo for open source Financial Reporting and Management.

    Good luck to you.


  3. Insightful comments.

    I manage a consulting firm aimed at "freeing" our clients from enterprise vendors. One of the biggest hurdles is getting these companies to view open source as a viable alternative. They are so use to buying software via the traditional model.

  4. Kyle - yes, the mis-perceptions about open source still abound, unfortunately. We all need to work to overcome. Forrester's Jeffrey Hammond is interviewed today and provides good insight on open source progress in the enterprise:

  5. Correct! I spent 20 years in vendorland including CA, and did a lot of maintenance/ support pricing. The pricing model is definitely geared to the vendors' need to survive, not to value for the clients. Only once did I see a client return a box of mainframe tapes. The rest of the time they grimace and bear the annual pain. Just recently I project managed an open source implementation of a Learning Management System called Moodle. What a refreshing change. I need to know more about Jaspersoft for sure!

  6. David,

    Great that you found Moodle! We are big fans and have used it for some of our projects. Hope it all goes well for you.

    I invite you to learn all you can about Jaspersoft - and then give us feedback. We are surely trying to build better BI: more simply and more powerfully. Check out our Cloud BI announcement this week as the latest testimony: