How corporate America went open-source

August 16, 2010: 12:50 PM ET

According to recent surveys, more large companies are committing to open-source software. How the platform went from closet to corporate.Oracle open source

By Kit R. Roane, contributor

There was a time when open-source software was the domain of computer geeks and do-it-yourselfers with more time than money. But, as Oracle's legal salvo against Google highlighted last week, those days are long gone.

Oracle (ORCL), through its purchase of Sun Microsystems, has become one of the largest purveyors of open-source software in the world. Google (GOOG) makes the open-source and increasingly ubiquitous Android smartphone operating system. Their fight revolves around Java, a programming language Sun made predominantly open-source several years ago, but which Oracle's founder and CEO Larry Ellison now calls "the single most important software we've ever acquired."

Oracle's legal move lit up the blogosphere, with InfoWorld writing that "Oracle may ultimately create a chilling effect over the Java ecosystem and big open source projects throughout the industry," while ZDNet opined that Oracle "plans to sue its way to success." Google encouraged such views, calling the lawsuit a "baseless" attack on both Google and "the open-source Java community" that "works every day to make the Web a better place."

Whatever the truth, the legal dust-up has highlighted the growing importance of freely available open-source software to consumers of all stripes, in particular those making technology purchasing decisions in corporate America. For every nerd hacking an Arduino microprocessor to detect farts or brew beer, there is a well-paid technology buyer at a multi-national corporation looking to implement an open-source database, web server or business intelligence suite.

Rising tide lifts all boats

A Forrester Research survey of the business landscape in the third quarter of last year found that 48% of respondents were using open source operating systems, and 57% were using open source code, which are the building blocks of software. A similar survey of 300 large public and private companies conducted by Accenture this August found that half are committed to open source software, with 38% saying they would begin using open-source software for "mission-critical" applications over the next 12 months.

As Forrester Research analyst Jeffrey Hammond told those gathered at LinuxCon last week, "open source has crossed the chasm," adding that what was once the IT department's dirty little secret has now become "strategic adoption" in businesses both large and small. For instance, Amazon (AMZN) deploys open-source software for almost every task, Sabre travel network runs 32,000 transactions a second through it, Peugeot uses it on desktops and servers, and the New York Stock Exchange (NYX) bases its critical trading platform on the stuff.

Companies have become more comfortable using open-source as established technology companies, such as Oracle and IBM (IBM), have moved more aggressively into the space, often times improving the quality and heightening the profile of open-source options. Technology providers Novell (NOVL), Citrix (CTXS), Intel (INTC) and Yahoo (YHOO) have made robust open-source acquisitions over the last decade. Sun (prior to its sale to Oracle) raised eyebrows when it paid $1 billion to purchase the open-source database provider MySql in 2008. And, last week, when HP (HPQ) CEO Mark Hurd resigned, columnists opined that HP might finally embrace an open-source vision to grow its way out of its proprietary slump.

These established technology firms have also become active in nurturing open source projects. More than 100 of them, such as SAP (SAP), Nokia (NOK) and IBM, now work on the free distribution at the heart of one open-source development platform called Eclipse, and even open-source scourge Microsoft (MSFT) had tiptoed into the enemy camp, recently helping start the CodePlex Foundation to encourage open-source development and releasing 20,000 lines of its own proprietary code.

"This is one of the huge changes in open source over the last decade -- the move from mostly volunteer developers to corporate participation," says Jim Herbsleb, a professor of computer science at Carnegie Mellon University who has studied the open source movement. "It has provided a large infusion of resources. It has also created pressure for more discipline, for example in predicable release schedules, which makes open source more attractive."

Why it works in corporations

There are good reasons for these technology companies to participate; open-source doesn't necessarily mean free, after all. Just like printer companies almost give away the printer to sell the ink, open-source companies often give away the software platform, then make money by charging to install, configure, upgrade, troubleshoot, or provide additional bells and whistles for it.

The key benefit for the companies that coalesce around a particular open-source platform is that open-source encourages innovation and the rapid expansion of the market can lift all of their boats.

That market is growing, with open source software helping power everything from the engines of the original internet to the latest mobile phone operating systems and cloud computing platforms. Google's Android software — which runs a host of smartphones from Motorola, Samsung, LG and others — has surpassed Research In Motion and Apple's iOS to become the most-used software in smartphones sold to consumers in the United States; unable to compete in the smartphone market, the flagging Nokia just open-sourced its own proprietary operating system, called Symbian, a well-worn workhorse which is more than a decade old.

Economic malaise has certainly driven many companies to seek out open-source systems for a wider variety of applications, with some recent surveys showing tighter budgets to be behind about 40% of corporate migration to open-source software. But Accenture notes that budget constraints are not the only reason for the move, with many companies saying they think that open-source software now offers greater quality, more reliable and better security than proprietary systems.

Although an uptick in the economy could curb some of the growth, experts like Herbsleb believe open-source penetration in corporations will continue to accelerate. He notes that the demand for software is growing rapidly in every area, with the average car containing more than 20 processors alone, and industries from banking and insurance to medical care all facing growing technology needs.

Open source development provides an increasingly efficient and cost effective way to deal with those needs, while enabling customers to avoid being locked into one vendor or being forced to use its approved partners when they need service or support. Over the next decade, Herbsleb predicts such forces will drive the market for open-source software to "increase dramatically."

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