In today’s enterprises, IT takes center stage in an organization’s business model. They consist of interrelated architectural, co-operational and financial arrangements designed and developed to achieve its strategic goals and objectives. The products and/or services the organization offers, or will offer, are based on the arrangements that are built on the IT infrastructure. Open source software (OSS) is capable of bringing down average IT expenditure of companies. Cost reduction isn’t only about spending less on software licenses but also about increased efficiency in an organization’s IT setup. For example, the real value is higher, mainly because reused OSS code tends to be of higher quality when compared with equivalent proprietary. In this session, we will discuss the economic value of open source middleware for achieving the objectives set forth by the new IT business models.

1. Impact of Open Source
Samisa Abeysinghe
VP Delivery
WSO2

2. Why use Open Source?
• Build an echo-system around products and services
• Grow your user communiAes
• Cost advantage…
• Quality advantage!

3. Just beIer soJware isn’t enough to transform
an industry.

4. Cost vs Other Benefits
• Most assume OSS to be cheap
• It is not just about financial value
• Culture
– Is what OSS is all about
– Community driven with respect and ethics being the corner
stones
• Results in quality and security aspects
• Foster innovaAon

5. Open Source as engineering process
• Model for effecAve massively-distributed collaboraAon
• Leverages extensive base plaVorm of technologies
• WriIen with sharing and reusability as fundamentals
• Slashes feedback cycle (beIer fit)
• Accelerates release cycle (faster evoluAon)
• Crowd-sourced quality control (many eyeballs improves
security)

6. Open Source as an OrganizaAonal Model
• Convergence of the technical problem – fit, quality,
support
• Breaks down siloed department thinking
• InsAlls shared responsibility for saAsfacAon – enabled
flaIer org structures
• Distributed governance and meritocracy pracAces
propagate throughout the business

7. Economic Value of OSS
Labor
Economics
• ResulAng
from
personal
graAficaAon
and
reputaAon
Direct cost
savings
• Improved
pricing
flexibility
Efficiency
• Technically
• Strategically
• Socially
Control over
cost
• Get the right
and quick
responses

8. Open Source as a Customer Value
• Ease of AdopAon
- Permission-less, for any purpose
- Amenable to prototyping, failing-fast, iteraAng, evolving
- Fully transparent
- Standard legal terms (minimize review burden)
- Transcends corporate history and stability (escrow)
• Cost effecAve
- DramaAc downward pressure on prices
- Allows Ame/money tradeoffs

9. IT SoluAons
Services
SoJware
Hardware
• What have you got to
pay for?
• OSS drives down
soJware costs
– Lower overall
project cost

10. Project Economics with OSS

11. Value ProposiAon
• Since soJware costs go down with OSS
– More room for services
– Can provide beIer quality services
– More value to the whole project
• Faster ROI
• Broader value proposiAon

12. Integrated Stacks
• Saves integraAon Ame and component costs when OSS
used
• Replace some parts with OSS if not all to lower the total
cost
• When you sell the soluAon to other BUs the demand can
rise if your price is low
– Puts more price sensiAve customers within reach
• Quality of OSS
– SaAsfied customers

13. Lower Learning/Training Costs
OSS
Availability
Advantage
Download
and play
Explore and
innovate
around usage
Community
to help
Contribute
back

14. OpportuniAes
• Break the barrier to entry
– Try out the new projects/pilot projects with OSS for free
• Move on or throw away decision based on success
• Risk is less even if you fail
– Provision, maintenance and support will cost
• but later
• when the project is up and running

15. Open Source as a RelaAonship Equalizer
• Technology becomes a shared resource –contribuAon,
parAcipaAon, evoluAon
• Reduces informaAon asymmetry, cuts out the middleman
• Encourages collaboraAon, educaAon
• Maintain constant demonstraAon of clear and present
value (the lock-in problem)

16. Open Source as a RecruiAng Vehicle
• AIracts and retains top talent
• Widely used in educaAonal insAtuAons and research
projects
• Extends community beyond corporate boundaries

17. Contribute and Influence
CommiIers
Contrib
utors
Users Benefits
• Faster fixes
• Strategy alignment
• Employee
aIracAveness
• Visibility in the
community

18. Open Source as a Brand
• “Open Source” brand is on par with established brands
(IBM, Oracle)
• Introduces a wave of disrupAon for innovaAve vendors
• Brand strength reflected by a preference for OSS in many
kinds of organizaAons (private, governmental, non-profit)

19. Open Source is becoming “the default”
Future of Open Source Survey 2015:
• 78% of respondents said their companies run part or all of its
operaAons on OSS
• 66% said they take an open source-first approach to soJware
• 64% of companies currently parAcipate in open source projects
• 55% believe open source delivers superior security compared to
proprietary soluAons
hIps://www.blackducksoJware.com/resources/webinar/2015-future-open-source-
survey-results

20. What are customers doing?
• Developing OSS Policies
– Don’t preclude OSS – it may be the best or only soluAon
– Include OSS in evaluaAon matrix
– Establish a preference for OS
– Mandate OSS
– Contribute to OSS
• Develop a transiAon strategy
– All new projects on OSS
• Work with vendors in a collaboraAve way throughout a project
– architecture, development, deployment

21. Conclusion
• Control over cost
• Overall project success
• Efficiency
• Quality
• Influence

22. Thank You!
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