Companies needing to cut expenses will finally accept what open source has been offering, says database maker
The database market – currently at $18 billion a year (£12.3 billion) – will shrink substantially as the recession drives users to accept the open source message, according to open source database company Ingres.
Companies who now pay large software licence fees will finally make the move to open source software which costs a fraction of the amount, as their budgets are slashed in the recession, said Steve Shine, executive vice president of Ingres, at a round table in London entitled “The New Economics of IT”
“The database market won’t be worth $18 billion for long,” said Shine. “Since November 2008, the economic downturn has forced people to look at a different model.”
IT managers have been told to implement cuts of between ten and thirty percent, said Red Hat’s UK chief Phil Andrews, also at the event. This is an opportunity for open source vendors to pitch solutions with no licence fee and an annual support cost less than a year’s subscription to a proprietary solution.
“Ten percent is the magic figure,” said Andrews. Proprietary vendors charge twenty percent of the licence fee, as an annual support charge, he said. “If you charge ten percent [of the proprietary licence fee], who is going to say no?”
“It’s not about the technology, it is about destroying the enterprise sales model,” said Ian Howells, chief executive of open source document management company Alfresco. While proprietary software relies on phenomenal sales engineers on a long sales cycle, open source software spreads by word of mouth, and free trial downloads. “That only works if open source is much easier to use and install. If you say open source is too complex, you don’t get it.”
Analysts felt that some of the ideas presented were simplistic, and it might be harder for users to extricate themselves from licence-based software: “It is not important whether software is open or closed source, it is down to the levels of support and the level of standardisation – at the de facto level,” said Clive Longbottom of Quocirca, pointing out that companies with applications built on top of Oracle would have huge costs in transporting them to an open source platform.
Also, open source promoters tend to quote examples like Google’s search, or Facebook, which are large, but don’t require high integrity transactions, said James Governor of RedMonk: “Those are information servers, not transactions.”