Open Source Software Reaches the Tipping Point

From WSJ.com by Rachael King

Open source software is becoming more prevalent in business IT shops, not because of any sudden religious conversion, but for opportunistic reasons ranging from speedier time to market to ease of innovation. More than 50% of the software acquired in the next five years will be open source software, according to the sixth-annual Future of Open Source Survey published by North Bridge Venture Partners and Black Duck Software in May 2012. That survey said that open source is reaching a tipping point with broader adoption of open source in the enterprise, beyond tech savvy companies such as Facebook or Google that have deep expertise in its development.

Perhaps there’s no greater symbol of this shift than GE , an iconic American company if there ever was one. Open source software is a big part of its toolkit, not because of any philosophical stand as much as because it’s simply more pragmatic in certain instances. Bill Ruh, vice president of the company’s new global software center, tells CIO Journal, “Our goal is not to use open source. Our goal is to be able to develop applications in a three-to-five month time frame.”

Aside from GE, companies including Sears, Chevron , MasterCard , and the New York Stock Exchange are using open source software for a range of projects. Over the past several months, these companies have talked about using open source software for internal clouds, processing big data, mobile development and security, in interviews with CIO Journal. Their experiences matched those of survey respondents who said they saw open source software as enabling more innovative approaches to cloud, big data, mobile apps and enterprise mobility initiatives.

Michael Dell during a panel last week at VMworld said open source software has helped drive “a pretty dramatic shift in the last decade or so,” particularly where cloud computing is concerned, in response to a question about the prevalence of open source in business environments. “It takes time for [open source projects] to mature to where they are deployable in mass and in scale but it’s definitely an important part of the way that IT is advancing further and faster,” he said. In fact, Dell is “incubating an internal cloud based on OpenStack,” which is open source cloud computing software, Dell CIO Adriana Karaboutis told CIO Journal.

Companies have begun using open source software for a variety of projects including building private clouds, data analytics, mobile application development and network security.

When CTO Phil Shelley built a private cloud at Sears Holdings Corporation , he used open source software for cost and flexibility reasons. “The private cloud we built for Sears Holdings, and used by the subsidiary companies and brands, is built using open-source tools,” Shelley said in an e-mail message. “We use open-source Linux, XEN as a hypervisor and we created our own orchestration layer that includes pricing, templates, provisioning, billing and changes, again written in open source languages.” Shelley, who also serves as CEO of MetaScale, a new Sears Holdings company, is now taking that experience and using it to provide big data analytic services to other enterprises — another way open source is enabling Sears to generate new revenue.

Sears and Chevron are also using an open source database framework called Hadoop to analyze large amounts of data. To find oil in places like the Gulf of Mexico, Chevron sends out ships that survey areas suspected of containing oil or gas deposits. The ships generate sonic waves creating seismic data that is then converted into an image of the ocean floor that Chevron engineers can use to determine where oil is located. “Within three years, I think the energy industry is going to embrace open source,” Steve Walker, who works in data research, analytics and data warehousing at Chevron, said at a conference in June.

MasterCard makes use of open source software to create working prototypes of mobile apps it hopes will help it stave off competition in the global payments market from possible disruptors such as PayPal or Square. The company hosts events called Innovation Express, in which teams come together for 48 hours. The company describes these events as “speed-dating meets product development,” during which competing teams create working prototypes, video demos, sales decks and business cases for proposals they create in response to specific challenges. The teams use open source tools to build the working prototypes because open source software code can be reused and thus allows developers to create apps more quickly, MasterCard CIO Rob Reeg told CIO Journal. One new product that came out of these challenges is a smartphone app that allows customers to order and pay for their meals at a fast food chain and have the restaurant staff deliver their order to their table.

CIOs also say that open source is generally more secure than proprietary software because a wide community of developers is looking at the code. Bob Kerner, chief digital officer at NYSE Euronext , and the former chief architect at AOL , says he uses open source widely. “Hackers can also see the source code,” which means that security issues tend to surface immediately, he said. Kerner used open source Web development tool Drupal to roll out 40 Web sites over the past couple of years.

Of course, open source software isn’t a panacea, and there are a number of barriers to adoption, according to respondents of the open source survey. About 48% of respondents said that they weren’t familiar with open source solutions and 47% said they lack internal technical skills needed to use open source. About 35% said lack of formal vendor commercial support was an issue. GE, for example, said it needed to learn how to deal with that problem. “We had to get our heads around this,” said Ruh.

Not every type of application has an open source alternative, but CIOs will look increasingly to open source versions of applications, particularly where a given technology has reached a certain level of maturity, and where proprietary software vendors can only offer slight enhancements in functionality. Over time, CIOs, analysts, and even some vendors agree, the vendors themselves may decide to open-source some of their products and sell higher-margin support services, rather than continuing to compete with rivals in an increasingly commoditized niche.