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Report: businesses going open-source

Software vendors under pressure

Two reports released this week show that open-source software is gaining adoption worldwide - to the extent that it is putting significant pressure on commercial software companies and their business models.

In a report entitled Going Open: Software Vendors in Transition, The 451 Group found that open-source software is increasingly affecting the business models of proprietary software vendors. These companies are now looking to open source as a way to increase distribution, improve customer participation and respond to competition.

The trend of proprietary vendors 'going open' has seen companies either shifting away from licensing fees as a basis for customer usage or releasing some code via an open-source licence.

Open source is changing the relationship between software vendors and customers, The 451 Group said. Smaller vendors and startups can more effectively compete for enterprise customers by providing code and a community for ensured long-term viability.

While services are often considered the most likely path for software vendors looking to generate revenues from open source, almost half of 31 vendors interacted with for the study indicated the greatest revenue opportunity was in commercial licensing.

Meanwhile, Evans Data, in its 2007 Emerging Markets Development Survey, found that developers worldwide are increasingly using open-source code.

In a survey covering developers in regions including Brazil, Russia, Eastern Europe, India and China, 69 percent of respondents said they are using open-source software, which is up from 59 percent six months ago.

The Eclipse open-source platform has had high adoption in countries such as India and Brazil. Linux development has increased in many emerging markets as well.

In the area of web development, 36 percent of developers in emerging markets are using AJAX (Asynchronous JavaScript and XML). The figure was 21 percent six months ago.

While open source is growing in popularity in these markets, all is not lost for commercial software. Forty-seven percent of Indian developers expect to be upgrading to Windows Vista as a primary or secondary host operating system next year.

In the security area, 87 percent of Chinese respondents experienced at least one security breach at their company in 2006.


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