Subject: Re: Open Source Developer (Economics)
From: Ian Lance Taylor <ian@airs.com>
Date: 20 Mar 2003 09:56:05 -0800

"Julius Steyn" <julius@solutionstap.com> writes:

> The discussion I wish to initiate is based on various published reports that
> indicate the lack of OSS with respect to "business critical" or "Mission
> Critical" software that can effectively compete with SAP, ORACLE finance,
> ORACLE HR, SIEBEL,  to name a few examples.
> Why is it that OSS seems to focus mainly on server environments, web
> applications and firewalls? It appears from many reports that there is a
> potential demand in the business world for OSS to participate in these
> market segments with the intent to reduce the TCO of the companies.
> Could possible reasons be related to; Licensing, OSS Legacy environment,
> lack of appropriate skills, or an industry "norm" to avoid these market
> segments?

I think that ``server environments, web applications, and firewalls''
are easier for free software development in several respects:

* They are technically simpler than large scale business software, and
  require less programming effort.

* The design decisions to be made are largely technical decisions
  which can be easily made by the developers.  For large scale
  business software, the design decisions must be made by people with
  experience in large scale business.

* The problems they solve are problems which developers encounter
  directly in their business or personal lives.  Very few developers
  encounter the problems which are solved by Siebel.

I think it's entirely possible that an FSB could develop something
like Siebel.  But I don't think it's going to happen anytime soon.

I don't think any FSB is prepared to make the large initial investment
to develop something as large and complex as Siebel.  Siebel requires
extensive customization for each deployment, which would certainly
provide a future revenue stream for an FSB.  But you have to develop
the software in the first place.  A typical FSB approach in such a
situation is to wait for somebody to develop it for free, but as
developers do not encounter the problems solved by Siebel, this is
unlikely to happen (though not impossible).

Also, I don't think any FSB has the institutional knowledge required.
Siebel was developed based on Tom Siebel's experiences at Oracle, a
very large company.  Current FSBs are small.

In general, over time, there is a progression of computer applications
from complex and customized to well understood and simple.  Compare
writing a compiler in the 60s to writing a compiler today.  FSBs tend
to stay in the well understood and simple quadrant, where they can
take advantage of lower upfront investment and the easy pickings of
software available on the net.  I believe that software like Siebel
will follow this progression as well, but it hasn't yet.  (I believe
that some software will always be complex and customized, but Siebel
type software is applicable to enough businesses that I believe it
will become simpler and better understood.)

> If there is an opportunity for OSS to enter this market segment are there
> any specific aspects that we need to take into consideration that could
> either prevent, hamper, frustrate a possible entry
> Are we aware of any such initiatives (real quality) that are currently
> active that require assistance albeit financial, marketing, strategy or
> other

I think that the main obstacles are funding and access to a few large
companies for validity testing.  If an FSB had those, I believe that
this type of software could and would be developed.  But I don't know
where the funding would come from.

The canonical FSB answer would be an industry consortium of some
sort.  But I don't see any motivation to join such a consortium.
Well, I suppose you could form a pool from companies which have
already suffered through the enormous pain of installing Siebel, and
want something better.  But they have already gone through the pain;
do they really want to put more money into the same problem?

Ian