North Bridge and 24 Open Source Leaders Announce 2010 ‘Future of Open Source’ Annual Survey Results at Computerworld’s OSBC

SAN FRANCISCO--(BUSINESS WIRE)--Today at Computerworld’s Open Source Business Conference (OSBC), a panel of top experts in the commercial open source industry, including executives from Acquia, Black Duck, North Bridge Venture Partners, Red Hat, and SugarCRM, announced the results of the North Bridge Venture Partners' annual ‘Future of Open Source’ survey. The survey results, collected from over 550 respondents including both vendors and non-vendors, highlight a range of significant issues continuing to impact the open source software landscape. Economic conditions, key market drivers and forecast for the coming year are among the topics taking center stage. The session will also gather real-time feedback from attendees via live text votes throughout the panel.

“Open source has moved into mainstream as people’s understanding and skills around it have matured. The question is no longer about proprietary vs. open source; it is how can open source be used across all tiers of the software stack”

“This year we opened up our survey to an even broader range of industry collaborators and a record number of participants including both vendors and non-vendors, and it’s clear that open source innovation is driving opportunities across all levels of the ecosystem,” said Michael Skok, General Partner at North Bridge Venture Partners. “Vendors are taking advantage of it and end-users are reaping the benefits. It’s a win-win and both industry players and open source communities are thriving as a result.”

Following are some of the key findings from the survey:

The survey found that economic and competitive factors continue to drive open source adoption.

Approximately 95% of respondents said a turbulent economy is “good” for OSS
As in prior years, respondents indicated that lower total cost of ownership and freedom from vendor lock-in are key drivers. In addition, this year the rapid pace of innovation is highlighted among the top three reasons OSS is attractive to businesses.

“We believe these factors are important to organizations who seek a competitive advantage. Communities are uniquely able to adapt the source openly and rapidly to meet changing needs,” said Skok.

"The open source development model provides an accelerator of innovation and distribution, disrupting the old proprietary business models,” said Dries Buytaert, creator of Drupal and CTO and co-founder of Acquia.

The survey also revealed that government/public sector validation is the leading “tipping point” driving adoption of open source software this year.

“For Drupal, the platform’s use for Whitehouse.gov has raised the level of awareness not only within government agencies around the world, but among private organizations as well,” continued Buytaert. “With the support of open source companies, we’re sure to see OSS continue its march into both the enterprise and public sectors."

The survey also revealed barriers to open source adoption.

Respondents listed unfamiliarity with open source solutions, lack of internal technical skills, and lack of formal commercial vendor support as the top three barriers to the selection of open source software.
As a result the survey also revealed that the business strategies predicted to create the most value for open source vendors include subscription based technical support and professional services and consulting.

"Much of the uncertainty that limited wide-scale open source adoption has evaporated as IT shops, constrained by tight budgets, are using more OSS to improve the efficiency and flexibility of the development process and realizing tremendous cost and time savings, said Tim Yeaton, President and CEO, Black Duck Software. "Lingering concerns about OSS use in many Enterprise IT shops remain, but that's natural and is diminishing rapidly as familiarity and the tools for managing OSS improve."

Overall the survey underscored the continued momentum of open source.

55% of respondents believe that more than half of their purchases will be open source in the next 5 years.

"Open source has moved into mainstream as people’s understanding and skills around it have matured. The question is no longer about proprietary vs. open source; it is how can open source be used across all tiers of the software stack,” said Larry Augustin, CEO, SugarCRM.

The reduction of venture funding in open source in 2009 in publicly disclosed funding deals down 37% to $375M, as cited by The 451 Group, also highlighted the impact new platforms have on open source vendors. The result is a reevaluation of business models, with vendors seeking new market strategies.

Over 75% of respondents indicated that either software-as-a-service and/or cloud computing will have the greatest impact on open source vendors

“As validated by survey respondents, cloud computing is one of the most significant advancements in IT today,” said Jim Whitehurst, president and CEO, Red Hat. “We believe that open source is a natural foundation for the cloud and is a great enabler of the expanded flexibility, scalability and cost savings IT organizations are expecting by moving to the cloud.”

The survey also highlighted WCM/CMS/social software as the sectors expected to be most susceptible to disruption by open source software in the next five years, moving ahead of traditional areas such as operating systems and databases.

Overall the survey found that from the community to customers to vendors, market growth is expected at all levels.

“In our view it’s a winning situation all around,” said Skok. “Customers want vendors to provide better visibility into new open source projects along with commercial support and services. That in turn is beneficial to the development communities behind those projects as they see greater adoption.”

Skok continued, “While we are as discerning as ever of our investments, those vendors that evolve to take advantage of shifts like cloud computing and look to provide leverage in their business model with things like electronic services can expect to attract funding from us. As proof of that we have already reinvested in Acquia’s continued rapid growth and closed three new deals in open source in 2009, including Akiban Technologies, Northscale and REvolution Computing.”

The 2010 Future of Open Source survey was developed collaboratively by North Bridge with input from 24 collaborators including Akiban Technologies, Olliance Group, Jaspersoft, Microsoft, Red Hat, Sand Hill.com, and the 451 Group, many of whom have contributed their views and vision to the Future of Open Source Forum. To see the full survey results visit: tinyurl.com/FOOS2010 and to view the Forum visit http://futureofopensource.drupalgardens.com/welcome-future-open-source-forum.

About OSBC

Computerworld's Open Source Business Conference (OSBC) is the industry's only forum for senior business leaders, C-level technical strategists, lawyers and venture capitalists to collaborate on emerging business models, strategies and profitability for open source software use. OSBC explores the legal, investment, vendor and customer risks, rewards and opportunities presented by open source software. The program will provide content-rich sessions from well-known thought leaders and industry executives on how open source technology is being used and will investigate the business implications of this technology. For additional details, please visit www.osbc.com.

About North Bridge Venture Partners

North Bridge Venture Partners is an active, early-stage venture capital firm based in Boston, Massachusetts and San Mateo, California, founded in 1994. With approximately $3.1 billion under management, North Bridge Venture Partners focuses on investments in the communications, software, new media, healthcare, and materials technology. Working closely with entrepreneurs, North Bridge adds value by providing strategic guidance, specific industry knowledge, team-building skills and an in-depth understanding of both private and public financings. North Bridge companies represented at OSBC include Acquia, Akiban, Mozes, NorthScale, REvolution Computing, and rPath. For more information, visit North Bridge's website at www.northbridge.com. North Bridge also has a growth equity arm in the North Bridge Growth Equity fund that invests in technology middle-market companies.