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Open Source 2009: It’s the Economy, Stupid. Or is it?

"I had not yet finished my first cup of coffee and I was convinced that the world was ending, but for the saving grace of open source."

About a week before attending the Open Source Business Conference last month, I heard an interview on public radio with the founder of Good News Network, a web site dedicated to reporting nothing but — you guessed it — good news.

This intrigued me as I prepared to attend OSBC, the Open Source Business Conference, because I wondered what the tone of the conference would be like in the context of the global economic [insert your favorite term here: downturn, crisis, meltdown, recession…].

I was especially interested to hear some of the same people who spoke one year ago, just as it was starting to dawn on most of us that perhaps the economic party was over.

For those who want to skip to the end, here is a read on the situation:

Good news: Open source companies are alive and well.

Bad news: It may be that nobody cares (more on this later).

Good news: Nobody cares. Solve a problem, and you make the sale.

Really good news: Open source will lead us from the wilderness. (Or at least that’s the dogma du jour.)

Recession + Open Source = The Promised Land

Anyone who expected to attend OSBC and NOT hear about the recession was quickly disabused of that notion. Conference Chair Matt Asay opened by pointing to “the worst economy many of us have ever seen” with a video showing how the brutal economy means “it’s time” for open source.

Asay identified “new realties” regarding the business use of open source software, all of which made perfect sense:

  1. Not using open source is risky: open source represents a lower acquisition cost (free is good), but vendor lock-in and potential obsolescence associated with commercial software are effectively eliminated.
  2. We need to expand the open source development model to enterprise IT. That is, big companies have to contribute to the community in a much more meaningful way.
  3. (This is a big one): “We’re past the purity debate.” In other words, who cares what is open source and what is not. Companies just need their software to work.

So: the economy sucks and open source rocks. Bring on the first keynote.

Not to put too fine a point on it, but opening keynote speaker Novell CEO Ron Hovsepian made the case that a shrinking GDP, cautious CFOs and general uncertainty translates into IT spending cuts of up to 10 percent. He then declared that “open source will be the largest beneficiary of this economic downturn.”

I had not yet finished my first cup of coffee and I was convinced that the world was ending, but for the saving grace of open source.

RedHat CEO Jim Whitehurst continued the theme in his afternoon keynote. Whitehurst was a speaker last year, and in his 2008 speech he pointed out that ill economic breezes were kicking up. This year, in so many words, he said I told you so and by the way, “This is a fantastic time for open source.” He said that tough economic times cause people to re-think strategies and that RedHat came into its own after the dot.com bust. It should be noted that the next day, RedHat released its quarterly results, which basically hit the ball out of the park.

Next up, a group panel moderated by Jim Zemlin of the Linux Foundation featured Whitehurst and a group of open source end-users including K.S. Bhaskar of Fidelity Information Services, Timothy Golden of Bank of America and Vinod Kutty of the Chicago Mercantile Exchange.

What struck me about this panel was its utter banality. And I mean that in a good way. Here were a bunch of people whose success depends on the effective use of technology basically saying things like, “It just has to work, and open source does.” And again, the consensus was that the economy has caused businesses to give open source a second look and isn’t that wonderful.

I was sitting next to the CEO of an open source company who leaned over to me and said that this panel was boring and that we all seem to be in agreement here. I responded that I thought that was a good thing. It seemed the time really has arrived for open source.

“I Had Some Dreams They Were Clouds in My Coffee.”

Clouds.

Did I mention “clouds”? No. Well, consider them mentioned. Cloud computing was another major thrust of many presentations. Hovespian made sure to get it in there. Sun Microsystems CEO Jonathan Schwartz (who at the time was up to his ponytail in IBM acquisition talks) kicked off his keynote by dismissing open source right from the top. “It’s a given,” he said. “The more interesting thing is what happens after open source.”

That would be…clouds. He mentioned the announcement a week earlier of (wait for it)… the Sun Cloud in his keynote that opened the second day. The “arc” of open source includes adoption by end users, then companies that can deliver commercial support and products to those who need it and are willing to pay for it. This is the “users versus customers” distinction and, according to Schwartz (and many other CEOs of open source companies), this makes open source the ultimate lead-gen channel.

Even the entertaining Robert Youngjohns, President of Microsoft North America, concluded his remarks by emphasizing Microsoft’s strong support for clouds. (But not before taking a couple of shots at open source. To paraphrase: Free is not necessarily cheaper and Does everybody really want to be in the software business?

He pointed out that Microsoft customers are not either/or types of businesses and as such, Microsoft is partnering with Linux software companies. Microsoft is “…making sure we support open source code, where it’s appropriate and where it’s applicable.” According to who? Microsoft? I’m not sure the good folks at Microsoft should be the arbiters of what is and is not appropriate on behalf of their customers. Maybe the customers should decide and demand that Microsoft go along.

Next: Venture Funding Anyone?

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