The commoditising of software
Published: 13 Feb 2004 11:35 GMT
Penguins coming home to roost?
Linux servers were the first open-source product to become a mainstay of corporate data centres, but other types of software, such as databases and applications, are quickly gaining viability. And although the rise of Linux has been most threatening to Microsoft, the extension of open source's reach could take proprietary software business away from many other companies as well.
IBM, which was central to spreading the open-source movement beyond its grass roots and into the corporate setting, is another major player that is taking the dual approach of selling proprietary software while offering open-source services. Executives acknowledge the possibility that emerging open-source products will catch up and match the functionality of Big Blue's commercial line.
"There is a risk there," said Doug Heintzman, director of technical strategy for IBM software. "But frankly, it's a waste of energy to overtly try to stop something with a life of its own... The market will always win."
After ditching its own Web server software in favour of Apache in 1998, IBM now invests millions and employs about 1,000 people in open-source projects. Involvement in these communities helps IBM advance industry standards, such as those for grid computing, which help unify Big Blue's disparate products. IBM's commercial products, such as its Eclipse-based development tools, offer richer features than the software available for free.
HP, which recently reported $2.5bn in revenue from Linux last year, launched a consulting service around an open-source software "stack," which includes the MySQL database, the JBoss Java application server, the Apache Web server, Linux and other freely available components.
The service offering could strain HP's partnership with BEA Systems and Oracle, but the company still sees a good business opportunity in open source, even if the use of proprietary software continues to grow, said Mike Balma, chief Linux business strategist at HP. "There is some obvious overlap... [but] there's enough room in the market for everybody," he said.
As such larger, established companies search for a balance, several purely open-source operations have emerged to challenge the incumbents. Red Hat and SuSE Linux, which Novell acquired last year, hitched on to Linux's rising fortunes in the operating system market, but companies are also seeking business opportunities in other software categories.
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