Javier Soltero, CEO of open source IT management software vendor Hyperic, has garnered significant wisdom transforming open source projects into enterprise products and expresses keen interest in the need to match worthwhile open source undertakings with the appropriate business model. Here's how Soltero sees the open source movement evolving.
What do you see as the more pressing challenges and opportunities for open source given the current tech climate?
The biggest challenge for open source companies remains finding a scalable way of generating revenue while maintaining the openness and community focus that makes their business possible. Today's economic climate will put even more pressure on business models that are not sustainable because not enough value is being delivered to customers to motivate them to pay. The opportunity, of course, lies with the fact that open source companies have a much more cost-effective way to engage with their customers and prospects. This gives companies assurance that, in the face of slower growth, they are investing time engaging with prospects who are already using their products and are hopefully members of their communities. The economic model of traditional enterprise software companies, which do more "top-down" selling, is much more capital-intensive and inefficient than the "sell to users" model that is the foundation of commercial open source.
Where do you see open source heading in the next five years, especially with regard to development, community, and market opportunities?
I've always believed that open source will soon become the "price for entry" for any emerging software vendor and an increasingly attractive alternative for mature vendors with the guts to embrace it. The reason for this is based on the "historical baggage" of how commercial software vendors have treated their customers in the past. Expensive, up-front costs coupled with business models where the vendor held most of the cards and could bank on a good salesman to close the deal. Customers are educated into the art of procuring software and are demanding a process that starts and ends with them in control. Open source affords this by allowing those customers to evaluate and consume software under their own terms and engage with the vendor around the points of value that are clear to them. This trend depends on the creation of a community of users -- who can otherwise be regarded as empowered prospects -- who participate in the use, development, and refinement of a product.
In less than 5 years, in fact, starting even in 2008, vendors will not be able to bank their futures solely on them being "open source" and instead will have to use the benefits described above to drive the same degree of innovation that powered the first 25 years of the commercial software industry.