The commoditising of software
Published: 13 Feb 2004 11:35 GMT
Open source has become something like the invisible hand of the software economy, driving prices down and pinpointing those areas ripe for commodity status. While Microsoft continues to fight it, other companies have no choice but to embrace the technology, even though its long-term profitability remains largely unproven.
The largest software companies, including Novell, IBM, Sun Microsystems, Oracle and Hewlett-Packard, are raising their stakes in open source. Meanwhile, several smaller companies that work exclusively with freely available software -- such as Red Hat, JBoss, MySQL, Zend Technologies and Covalent Technologies -- have formed businesses around it.
The adoption of open source has been fuelled largely by cost-conscious customers, many of whom are still digging their way out of one of the worst periods in the technology industry's history.
Consider the case of Corporate Express, a Denver-based provider of office and computer supplies. Since installing the Apache Web server about four years ago, the company has steadily increased its use of open-source software, saving between $5m (£2.64m) and $6m over three years on proprietary-software licensing and gaining higher-quality products. Now, Corporate Express is pushing the use of open source in new areas, such as Java server software, databases and search engines.
To Andy Miller, the company's vice president of technical architecture, the old way of buying infrastructure software such as databases and application servers from big software makers just doesn't make sense. "Why should I pay for that stuff? It's just what I need to run my business applications, which is what really adds value," he said.
The same conditions that made low-cost hardware so common appear to be accelerating in the realm of open-source software. Travel-industry giant Sabre Holdings, for example, is moving its mainstream travel applications from IBM mainframes and Hewlett-Packard NonStop servers to several open-source software components that run on cheap, commodity hardware. The company intends to keep storing customer data on the high-end NonStop server and to use a farm of 45 Linux servers that run the open-source MySQL database to handle simple transactions.
Sabre expects open-source software to cohabit with proprietary products that offer more sophisticated features. But open source is the first choice. "We have to have our software costs down to a bare minimum," said Scott Healy, vice president of systems planning and engineering.
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