Linux and open source in their simplest forms, are software. In one instance an application, or a series of bundled applications with many names, under the umbrella of Linux. In the other instance, a concept applicable to software development. Despite popular opinion, this is nothing more than a methodology utilised for developing and delivering software applications and projects, one of which is Linux.
Having stated this, the open source software (OSS) concept is having a significant impact on the South African and worldwide IT markets. Existing software vendors are being forced to take a hard look at their licensing and revenue models. This, in turn, will have repercussions for the end user.
Establishing the potential impact of OSS on the local market will require further investigation in two areas: Linux, as SA`s most prominent OSS "project"; and OSS methodology and its effects on the SA IT services market.
Linux/GNU
Linux products continue to forge a unique growth path, from development through to enterprise, resulting in effective competition exists between products. Transitions that took place in 2003 and continued into 2004/5 have resulted in Linux repositioning. The software can now make a serious play for increasingly scalable tasks.
BMI-T`s analysis has uncovered that over the past couple of years, several mainline Linux distributors shifted from a high-volume, low-value product portfolio to higher-value, lower-volume products that clearly offer attributes that are far more in line with enterprise customers` needs. Linux continues to be attractive as a platform for basic infrastructure tasks, high-performance computing and Web-based applications. BMI-T has also observed increasing use of Linux as a platform for database and application server software, albeit constituting a small portion of overall Linux use.
The long-awaited head-to-head competition between Linux and Windows continues to be delayed, as Linux products nibble at the edges of the Windows world and, for now, have aligned themselves as the UNIX alternative in the server operating environment (SOE). Some evidence of a Windows to Linux erosion has started to appear, but this is confined to basic network infrastructure and Web deployments. BMI-T believes that mainstream, application-heavy Windows deployments continue to be fairly well insulated from Linux. This is due, in part, to the restricted and often confusing and conflicting information on return on investment and total cost of ownership metrics and how they are applied to the specific implementation requirements.
On the client side, an interesting scenario has developed, where the Linux desktop has become "good enough" and under some distributions, can even access native Windows SOE electronic messaging systems and printers. Installation tools have vastly improved, making it possible for a novice to install a Linux desktop successfully. However, as with the SOE market, applications continue to be the anchor that stops users from moving.
OSS and IT Services
The IT services associated with GNU/Linux, OSS and free software are some of the least researched. Much attention has been given to shipments of servers running Linux and on a small number of migration deals from UNIX to Linux. The services designed to support and operate these systems, however, have received little scrutiny.
The services ecosystem that surrounds open source and free software is greater than pure migration services. However, it remains a relatively small market when compared to the service opportunities offered by the proprietary platforms. BMI-T estimated the size of the OSS related services market in South Africa at R204 million in 2004. It is expected to reach R1 162 million by 2009. In other words, the market for services around GNU/Linux, OSS and free software is growing fast, but will remain rather limited in the foreseeable future when measured against the overall South African IT services expenditure.
Open source: is it software or services revenue?
Looking to the future, system integrators on the whole will remain cautious about open source, although a number of players have started building offerings. Large system integrators will play a role in the success of open source as they have strong relationships with their large enterprise clients. OSS options are being aggressively explored to satisfy the demands of customers.
Specialist service providers have emerged to meet the market`s demands for OSS and free software. They are innovative, pro-active and have a strong understanding of both free software tools and the nuances of the community.
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