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Open Source Software: Enabling Enterprise IT Innovation

[NOTE: This research is the first of a two-part series of research looking at how open source software is having an impact on both end-user companies and vendors. Part II is Open Source Software: Reshaping Vendor Business Models.]

Premise: Open source software has been widely used since Internet Service Providers (ISPs) and SaaS companies attempted to reduce costs after the dotcom bubble burst. Since then, a large number of individuals and companies have actively participated in open source communities to help build the technologies defining cloud, mobile, social, IoT, and big data. But there is a new wave of participation in open source communities as end-user companies in many industries are now starting to actively help shape new software, as well as contribute new projects.

This new trend of participation is primarily being driven by three critical factors:

  1. Digitization of business. More and more companies need to transform elements of their business to enable digital engagement with the marketplace. These transformations will build upon a Digital Business Platform, and the pace of innovation required to succeed is better aligned to open source community projects than many vendor roadmaps and timelines.
  2. Seeking modern IT efficiency. As end-user expectations change, more enterprise and government companies are trying to emulate the internal (IT operations) and external (UI/UX) experiences being delivered by web-scale cloud providers. These web-scale companies heavily leverage open source software, and enterprise and government organizations are seeking to use similar types of technologies to solve their mobile, big data and IoT challenges.
  3. Attracting superior technical talent. Many enterprise and government organizations realize that they need to hire a new generation of developers to help them solve a new generation of challenges. These modern developers want to work with open source software, as well as actively contribute to the communities surrounding the open projects. enterprise and government companies realize that they can use their participation as an active recruiting tool to hire these new generation of developers.
Figure 1: Two Key Influencing Factors - Open Source and Public Cloud (Source: Wikibon, (c) 2016)
Figure 1: Two Key Influencing Factors – Open Source and Public Cloud (Source: Wikibon, (c) 2016)

Establishing the Culture to Support Open Source Software

As the old open source community saying goes, “There is free like beer and free like puppies.” While open source software can be a little of both, for the most part open source “free like puppies”: costs nothing to acquire, but lifetime costs can be very high. While the benefits of working with open source communities can be very useful to the business, there are also a number of internal changes and challenges that must be understood and managed by IT organizations and developers.

Figure 2: The Pace of Change is Rapidly Increasing (Source: Wikibon, (c) 2016)
Figure 2: The Pace of Change is Rapidly Increasing (Source: Wikibon, (c) 2016)

The first challenge is cultural. Working with open source software is a distinct departure from relying on vendors to provide software for the IT organization or developer teams. Organizations must understand the evolving organizational dynamics required to work successful with more agile, cloud-native applications. The pace of change of software updates and the organizational structure of a the development and operational teams are likely to be significantly different than is in place now.

The second challenge (and cost) is finding the talent to work on open source projects. As the 2016 Open Source Jobs Report highlights, open source skills are in high demand but it can be very difficult (and costly) to find individuals with those skills. The struggle to find and retain those skills are often sighted as the reason why many IT organizations are willing to work directly with companies that package and support open source software projects (e.g. Cloudera, Docker, Hortonworks, IBM, Pivotal, Red Hat, etc.). This is also why many IT organizations leverage public cloud resources instead of trying to design, deploy and operate open source technologies with internal teams.

The third challenge (and cost) is understanding the legal aspects of open source software. While many people believe that open source software is primarily focused on cost ($0, free), it’s actually a set of licensing models that govern consumption, contribution and redistribution. IT organizations and developers must understand the nuances of the licensing model being used for any given project – and associated dependencies. Misunderstanding these licenses could potentially put a company’s intellectual property at risk, and even expose the company to lawsuits.

The fourth challenge is closely related to licensing – code contributions. By accepting code or contributing to an open source project (e.g. pull requests, patches, merges), the contributor is bound to the licensing of the project. This is typically accomplished through a Contributor License Agreement (CLA). It is critical for the legal department of any company to understand the terms and conditions associated with a CLA and how an individual contribution or acceptance could legally impact the business. Moreover, company developers that want to contribute must be fully versed in the compliance rules set in place by legal.

Examples of the New Open Source Companies

While open source has always been driven by communities and governed in foundations (e.g. Linux Foundation, Apache Foundation, etc.), many projects were often lead by large technology vendors such as Google, Intel, IBM, Red Hat, etc. Recently, as new wave of projects and contributions is being driven by companies that traditionally have not identified as a technology vendor, but are quickly shifting their business focus to be more technology focused. A great way to get exposed to these new efforts and companies is to attend the DevOps Enterprise Summit, which has emerged as the industry’s premier event to share and learn about commercial open source contributing.

Leading “non-tech” companies have not only been active in open source communities, but they have also been actively recruiting developers at major events and minor meetups all over the country (and globally). Their presence at events, from breakout session speakers to technology booths to event sponsorship, is often on-par with major technology vendors. Each of them realize that developers are critical assets as they continue to evolve their companies towards a technology focus. Here’s a partial list of example contributing companies in a variety of vertical industries:

Every one of these companies have not only been active in open source communities, but they have also been actively recruiting developers at major events and minor meetups all over the country (and globally). Their presence at events, from breakout session speakers to technology booths to event sponsorship, is often on-par with major technology vendors. Each of them realize that developers are critical assets as they continue to evolve their companies towards a technology focus.

  • Netflix – https://netflix.github.io/ – The streaming media leader publishes many of their infrastructure, operations and scalability projects under the “Netflix OSS” brand.
  • Capital One – http://www.capitalone.io/open-source/ – The credit card and financing company has begun open sourcing several of their internal operations tools, including a DevOps dashboard called “Hygieia”. In addition, Capital One runs internal innovation days and hackathons to generate new ideas.

  • Target – http://dev.target.com/ – When retailed Target looked at the future of their business, they realized that they needed to have a different model in place to integrate with new technology. Target has placed a heavy focused on open source software, DevOps and modernizing applications.

Action Item: As more companies embrace open source software as the core technology for their digital transformation, more and more of their stories and projects are becoming visible to open communities. The opportunity to learn from these companies or collaborate on projects has never been greater. Any company looking to engage with open source technologies should study their transformations of these companies and directly engage with them or the communities in which they are actively developing new software projects. IT organizations and developers that want to modernize development and applications — and use open source software to get there — must engage and learn from both the successes and failures of vanguard open source companies.

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