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Mark Madsen

Open source is becoming a required option for consideration in many enterprise software evaluations, and business intelligence (BI) isn't exempt. This blog is the interactive part of my Open Source expert channel for the Business Intelligence Network where you can suggest and discuss news and events. The focus is on open source as it relates to analytics, business intelligence, data integration and data warehousing. If you would like to suggest an article or link, send an e-mail to me at open_source_links@ThirdNature.net.

About the author >

Mark, President of Third Nature, is a former CTO and CIO with experience working in both IT and vendors, including a stint at a company used as a Harvard Business School case study. Over the past decade, Mark has received awards for his work in data warehousing, business intelligence and data integration from the American Productivity & Quality Center, the Smithsonian Institute and TDWI. He is co-author of Clickstream Data Warehousing and lectures and writes about data integration, business intelligence and emerging technology.

 

November 2007 Archives

Downward price pressure from open source on the general software market hasn’t been as significant as expected. You don’t see Oracle dropping the price on their applications, or IBM lowering the price of DB2, due to open source. At least not yet. Outside of a few small areas, pricing in the commercial markets has been relatively stable.

One reason is that there is a lot more to many technologies than just the product alone. There’s a broader software ecosystem to be addressed. To have price pressure implies that you can exchange one product for another (relatively) easily. Until you have that, the impact is more likely to be limited to new development projects. An example of this is databases behind web sites.

You are far more likely to see open source databases in this area than in other areas of IT for several reasons. You have (typically) new projects starting from scratch where the alternative is an open source database or a hefty commercial license. While database vendors may lower their prices, there is little chance of dropping far enough to be significant, so you are unlikely to see a big drop in commercial database pricing. This may change over time as open source database technology improves, in much the same way that Linux has slowly replaced vendor Unix distributions. In the near term, price pressure on that market is not that big a factor.

The price factor with open source shows up where the software is more mature, typically in a market segment that is headed towards commoditization already. With maturity comes relatively stable software boundaries, and standardization at the boundaries. Standardization allows for easier switching of components, which invariably leads to substitutability and downward price pressure. Open source can accelerate this process, since open source projects usually work with open standards rather than proprietary standards.

Open source affects the commercial market n more subtle ways, for example by enabling more experimentation, something I’ll discuss in a later post.


Posted November 29, 2007 9:11 AM
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The real impact of open source is the chance for IT to try new technologies sooner and with less risk. With open source, a group can bring a technology in house, experiment with it, and then decide whether to engage a commercial vendor or continue with the open source software.

If you want to experiment with new technology in the commercial software world, you first have to talk with a vendor sales rep, After a long involved process, you’ll usually get some sort of trial license for a limited time that allows you to use their software.

These sorts of trials require management involvement and multiple levels of approval. Often the legal department is involved since there’s some sort of trial license agreement. The process is really not under your control, the schedule isn’t entirely yours and the process requires extra work.

Contrast this with open source, where a developer can download the software when they want, work with it when they have time, and without the same level of management review or oversight. It empowers developers and IT managers by freeing them to do things that otherwise would be too much trouble.

Even if you later buy a commercial product for deployment, open source allows you to try things out in a relatively safe way at the start. It also removes some of the deployment risks since you can deploy in production on a small scale. You can’t do that production deployment with a commercial product on a trial basis. At some point you have to pull the plug.

Being freed from some of these technology acquisition constraints means you can try new things and be more creative when coming up with solutions. In management terms, you can be more innovative, which is why IT management should be embracing open source.


Posted November 28, 2007 9:52 AM
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One of the questions that comes up often in IT is whether to build or buy software. It’s in generally in one of three contexts:

  • new technology where the products are expensive or incomplete, so it may be more cost effective to get what you want by building it in house
  • expensive technology where the products exceed IT budget constraints, often a consideration in small to mid-sized IT shops
  • applications with a high degree of integration, where the key to success is integrating the new software with the existing environment and applications and thus involves a lot of programming

Open source offers a third alternative to the traditional decision of buy versus build. When you find yourself in one of these situations, your first option should be to look for open source packages that might meet your needs.

There is a lot of innovative work happening in the application space, particularly related to web tooling and applications. You’ll find a lot happening here that you can use to build custom solutions faster than if you were to build from scratch, and you will still get exactly what you want.

Where the initial acquisition cost is a concern, open source brings an obvious advantage. The real question you need to answer in this situation is whether the cost of ongoing operations combined with the acquisition cost is significantly different than buying a package. Assuming there is an acceptable open source solution, it’s pretty clear that you will save time and money over building your own. If expensive mainstream IT software is out of reach, open source can save the day.

When software requires a lot of work to integrate into your environment, labor costs typically trump software costs. Open source alternatives may help here because open source is typically built with open standards in mind, meaning it’s (often) easier to integrate.

The other area affected by integration concerns is integration software itself. Even if you choose to buy a package with heavy integration requirements, you can use open source integration software to do the systems integration work and avoid hand-coding.

It’s worthwhile considering open source as the third alternative when you’re looking at a buy versus build decision.


Posted November 27, 2007 9:38 AM
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