By the standard of commercial software vendors, the Open Source software market remains small. An IDC study is forecasting that the standalone open source software (OSS) is poised to grow from $1.8 billion in 2006 to $5.8 billion in 2011, a compound growth rate of 26% per year.
“The market is still quite immature, especially now that we see active open source projects in all layers of the software stack. Although we see healthy growth in revenue from standalone open source software, we must keep in mind that revenue will substantially lag behind distribution of open source software. Many distributions of standalone open source software are free, while paid distributions typically are based on pay-as-you-go subscriptions rather than pay-up-front license fees”, said Matt Lawson, program director of IDC’s Open Source Software Business Models research program.
Customers have become more educated about Open Source and there is ever growing interest. Often times customers will find that OSS offers more flexibility and choice over what is available commercially. The increased interest in and acceptance of OSS is being fueled by venture capital flowing into companies with an Open Source component of their model. Adding to the interest are companies becoming more comfortable with the subscription support model often used by Open Source vendors like RedHat.
The IDC report also has advice for Open Source vendors.
- Careful selection and design of the business model is key.
- Creating partnerships and alliances can help grow the recognition and usage of the brand.
- Building an active community around the product is good PR and often provides great contributions and feedback for setting product direction.
