enterprise, India, Open Source, opensource, Startup, Startups

Does LAMP need its CASE – Open Source in Enterprise

Much opinions have been floating on each side of the discussion why Open Source is or isn’t a good idea for an enterprise. Usual suspect like long sales cycle, implementation challenges, support concerns, etc. are cited as the barrier to entry. While free/cheap, no lock-in concern, open source benefits, etc. gets cited as the reason to support Open Source in an enterprise.

So as in life there is no perfect answer. This one is no exception to that. It comes down to making choices that suits the organization net positively and help accomplish business goals.

In my opinion, Open Source enterprise offering can have some legs. Companies like Compiere or other upcoming venture stand a good chance to replicate say what Redhat has done to further the cause of Linux. At current level of Open Source Company’s valuation this remains a viable business towards a targeted market. Although, some shrewd venture folks may suggest it is a matter of time before Open Source companies starts to get valued as a Service company given the margins are closer to that than a product company.

I would think certain market say where audience has embraced LAMP (Linux, Apache, MySQL, Perl/PHP) should be supportive of Open Source enterprise product, if it can be successfully packaged, delivered, deployed, implemented and supported at no worse than the leading vendors. Thought process here, in some regard, is extending the open source stack to its preferred constituents and make it available at an acceptable total cost of ownership.

Figuratively speaking, does LAMP need to be in its CASE (CRM, Analytics, SCM, ERP) for a deeper adoption of Open Source within enterprise?

One example of Open Source friendly market is India. Lately, much news has come out suggesting how various state governments are favoring Open Source as the platform of choice.

Some may ask – Does the economic impact of software cost is more to companies in country like India? It all depends on how many companies can really afford $100s of thousands (after discounting) of software when earnings are not in hard currency? Also, different Enterprise structures adds to the discussion – like how many companies have revenue of $250M or more in India; need of larger number of seats (read more scalable software and support needs) as companies have more employees for a typical say $100M company in US; software cost impact to top line revenue depending on whether it hits operational or capital spending; etc. Some of these factors make Open Source more appealing to the market. One can add low implementation cost to this within domestic Indian market to make the overall implementation of Open Source enterprise software rather cheaper to accomplish.

A gating factor for Open Source success stories will be how it extends and matures the eco system beyond development community – to cover every aspect of value delivery. It is vital for the Open Source model to scale and instill confidence in enterprise customers about their investment in Open Source. Like having enough partners who can effectively implement, sell, support Open Source products in various geographies. Time will tell how successful open source will be in an enterprise market.

So what do you think – do you believe LAMP need to be in its CASE to make Open Source successful in enterprise market?


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