\'Open source revolution will rock the IT sales model\'

By   |  November 18, 2004

The open source world is shaking the traditional IT world by its roots, not only through its non-conformist approach to licensing agreements and ownership of source code, but also through its broad-minded views on solutions implementation and its determination to crush the crippling concept of vendor lock-in.

One of the direct impacts of this revolution will be a complete overhaul of the software sales model in its current form.

The next 10 years will see the conventional IT sales model turned on its head, with the focus shifting from the implementation of products to form large, costly solutions that seldom deliver all they promise, to an emphasis on achieving real value and intrinsic bottom-line savings on relevant software without incurring the burden of annual licence fees.

It is incorrect for companies to market products under the guise of solutions.

A product is not a solution: a solution is an answer to a particular technology problem. You might be able to solve a problem with a product, but problems are never static. What might be solved today may be unsolved tomorrow, so it\’s critical to be able to adapt quickly. Open source technology provides the customer with the widest variety of choice. A product is a black box. It either works or it doesn\’t. Once you know it doesn\’t work, it\’s too late; you own it.

The new IT sales model will hinge on value-based selling and the delivery of actual value to the business.

Contrary to traditional thinking in the industry, total cost of ownership (TCO) cannot be measured using the current sales model. For too long companies have been led by their noses by a vendor that has monopolised the market. For years IT directors have been making technology decisions that are the result of vendor lock-in, influenced by time-to-market constraints rather than a variety of technology choices that should have been available to them.

With the maturing of the open source market and the quality of the open source software available, those days are over. True business value is dependent on how accurately IT investments are targeted and how they positively impact identified value drivers in the business.

The concept of open source means anyone can access, download, build and install its software. This being the case, open source software will affect the sales model by changing the way software is developed. Solutions implementers will be replaced by solutions experts who, rather than writing solutions from scratch, will integrate readily accessible solutions to suit clients\’ needs.

An integrator can add considerable value over a software designer. Having access to the source code of an application enables the correction of shortfalls without the headache of having to redevelop the entire program. The best components can be selected for the solution, so the process becomes a far higher level architectural design decision than a lower level, proprietary approach.

One of the challenges to the rapid migration to open source software is the size of the proprietary software sector. With a hold on more than 80% of the software market, Microsoft, for one, has commandeered the market. This is reinforced by the significant volume of Microsoft channel partners implementing Windows solutions in organisations large and small.

Microsoft is entrenched in the enterprise, as is the entire school of thought surrounding proprietary software. Large organisations tend to be cautious to try new concepts, afraid of the risks involved in change.

As a result, the change process is likely to be slow and arduous, but as the small and medium business sector adopts non-paid-for open source implementations of front- and back-office tools, so the shift to open source will gather momentum.

Large organisations enterprise will be slow to catch on, waiting for open source implementations to be tested and proven by the \’mom-and-pop\’ environment before taking the leap. We need to cut the corporate feedback cycle between Microsoft and its customers. Once large organisations see the bottom-line cost benefits of removing annual licence fees, and realise the benefits of quality open source software, the ball will start to roll.

The most significant challenge to industry\’s adoption of open source software is the issue of vendor lock-in and the kind of corporate kickbacks that take place as a result of large-scale policy decisions in organisations, such as global licence agreements in companies. Interestingly, the inevitable tearing of this megalithic noose around the market began in 2002, with the government of Argentina taking a policy decision to implement open source software over paid-for solutions, and opting to pay implementation houses monthly retainers rather than suffer the endless burden of exorbitant annual licence fees.

As business becomes more aware of the actual costs of vendor lock-in, so the value of the benefits derived from open source will become increasingly clear and gather momentum.

James Ainslie is MD of Clue Technologies (james at clue.bz)

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