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August 14, 2006 10:38 AM Eastern Time 

IDC Reveals the Real Impact of Open Source: Sustaining Innovations and Extending the Useful Life of Software Assets

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Aug. 14, 2006--According to a newly released IDC study, the open source software phenomenon has spread far beyond Linux and is gaining enormous momentum. The study, which analyzed IDC surveys from over 5,000 developers in 116 countries, finds that developers worldwide are increasing their use of open source. The study declares that open source software represents the most significant all-encompassing and long-term trend that the software industry has seen since the early 1980s. IDC believes that open source will eventually play a role in the life-cycle of every major software category, and will fundamentally change the value proposition of packaged software for customers.

"The use of open source beyond Linux is pervasive, used by almost three-quarters of organizations and spanning hundreds of thousands of projects," said Dr. Anthony Picardi, senior vice president of Global Software Research at IDC. "Although open source will significantly reduce the industry opportunity over the next ten years, the real impact of open source is to sustain innovations in mature software markets, thus extending the useful life of software assets and saving customers money."

“The use of open source beyond Linux is pervasive, used by almost three-quarters of organizations and spanning hundreds of thousands of projects”

The study finds that of the 5,000 survey respondents, open source software is being used by 71% of the developers in the world and is in production at 54% of their organizations. In addition, half of the global developers claim that the use of open source is increasing in their organizations.

IDC identifies the following developments in the open source phenomenon:

-- Over the next ten years, open source will extract a toll on the industry in the low double digits, percentage wise, led by vicious price competition

-- Price effects are a less important impact of open source adoption than the effect of open source on the entire life-cycle of software invention and innovation

-- Despite the proliferation of open source license forms, only three business models are important from an industry and an individual vendor success point of view: the software revenue model, the public collective model, and the service broker model

-- Competitive success among vendors' open source markets will be determined by a different set of core competencies than those required to invent and market a new product

Picardi adds, "As business requirements shift from acquiring new customers to sustaining existing ones, the competitive landscape will move towards costs savings and serving up sustaining innovations to savvy customers, along with providing mainstream software to new market segments that are willing to pay only a fraction of conventional software license fees. Open source software is ultimately a resource for sustaining innovators."

The study, Open Source in Global Software: Market Impact, Disruption, and Business Models (IDC #202511), explores the growing role of open source among global software developers, and reaches conclusions beyond the hype surrounding the open source phenomenon. The study examines the future impact of open source in the software life-cycle, the emerging business models for open source software markets, and the potential for market disruption. The study also investigates the open source business models of Microsoft, IBM, Oracle, SAP, SUN Microsystems, CA, AOL, Amazon, and Perot Systems. Essential guidance is also provided, which includes a discussion of "networked intelligence" and the key ingredients of open source sustained innovation business models. The data presented in this study draws from the results of an IDC survey conducted in the spring of 2006 of over 5,000 developers in 116 countries, representing 38 developer networks.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

Contacts

IDC
Anthony Picardi, 508-935-4193
apicardi@idc.com
or
Jared Berezin, 508-988-6882
jberezin@idc.com
http://www.idc.com

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