FOSS, COSS and HOSS v. The Enterprise Software Model
Before you write me off as just another Open-Source Zealot, hear me out. 2009 will be recognized as the year when Open-Source Software (OSS), and Cloud Computing (CC) for that matter, became mainstream concepts. Within 5 years both will also be the mainstream deployment models for Enterprise Software. Enterprise software includes: both row and columnar databases, Enterprise Resource Planning (ERP) systems, Data Quality (DQ)/Extraction, Transformation, Load (ETL)/Master Data Mangement (MDM) software, Business Intelligence and Reporting (BI/R) solutions, Portal, Collaboration and Social Networking platforms, Customer Relationship Management (CRM) and Campaign Management applications as well as any other number of operational and infrastructural applications.
I can make this prediction with certainty thanks to the paradigm-shifting work of Clayton Christensen and his model of disruptive innovation. In a nutshell, disruptive innovation occurs when disruptive technology (generally cheaper and easier to use solutions to existing consumer needs) is coupled with business model innovation (usually in the form of new value networks) to provide products which are simpler and more affordable than their more functional and more complicated competition. The net effect is to open up whole new markets where economies of scale compensate for reduced profit margins. One of Clayton Christensen’s canonical examples of disruptive innovation is the PC’s disruption of the minicomputer (for all the details, pick up a copy of “The Innovator’s Dilemma”). Suffice to say, OSS sits in the same relation to the Enterprise Software Model as PCs did to minicomputers. I’ll happily take up the debate in the comments section with those who disagree, the rest of you will have to take me at my word.
Before I go further, let me give some quick definitions. When I say the Enterprise Software Model (ESM), I am referring to the proprietary, license- and/or subscription-based models by which software has been sold for the last 40 or so years. In this model a software company develops, patents and copyrights code that is further legally protected from reverse engineering by stern prohibitions in the clickwrap and software end-user license agreements (EULA). The software company then sends salespeople out into the marketplace, supported by a barrage of marketing materials to convince prospective clients to buy said software at exorbitant margins (anywhere from 30-95%, with most around 80%) on the basis of assertions, flimsy comparative assessments (also known as Proof-of-Concepts) and almost always quite a bit of FUD. Such sales are fundamentally based on expectations – expectations of performance, functionality, stability, scalability, extensibility, and so on. When said software is implemented at the client site and one or more features fail to meet expectations, the door to litigation is opened. For this reason most of the language in a EULA revolves around issues of indemnification and the responsibilities of the EULA signatories.
In COSS some form of EULA is wrapped around portions of the software and/or support, development, or maintenance services associated with the software. The COSS model also often provides some level of indemnification, that is a single, legal “throat-to-choke” should something go awry at any point after the EULA is executed. Key to the COSS model is that invariably some portion of the software is still proprietary.
In HOSS, the best of FOSS and COSS are brought together. The entire code base and development community remains free and open while service level agreements (SLA) are wrapped solely around services such as support, implementation, training and/or development. The SLA will often address indemnification, but only in the context of the services provided as the code base itself is transparent and free.