Open Source & Outsourcing

Continuing on the open source theme, here is a question for you.

How does open source play out in the outsourcing world?

• I think outsourcing companies have been delivering somewhat of an open source code to their customers for years. The offshore outsourcing companies delivered custom software and products to clients with source code on a work for hire basis. Of course it is not same as free open source software developed by a community. And the software is not open to the public. Neverthless I think it is close to the commercial open source movement at present. And a lot of times the rationale given by outsourcing companies, particilarly the offshore ones, for build vs buy was that they gave source code ownership to companies and delivered customer software at the same or lower cost as licensing. And this is still the model to a large extent in outsourcing.
  
  
• At the same time, open source is disruptive to the whole software industry and therefore can immediatly affect outsourcing firms especially in the product engineering space.
  
  
• Outsourced vendors & SIs offering IT solutions implementation and support services are likely to see more opportunities with open source adoption in enterprises. A number of companies have already taken up open source implementation and support services as a key growth area.
  
  
• There is also open outsourcing that can be a threat to outsourcing companies. Open outsoucing can eliminate the need for outsourcing companies again in the product development space.
  
  
• I see commercial open source as an opportunity for outsourcing firms to enter product space rather than being stuck being pure service firms. It is also an opportunity for outsourcers to give back to the community by participating and developing truly open source software free for all while continuing to grow their outsourcing services. Infact being an active participant in the open source community can be a key competitive advantage in the not so distant future.
  
  
• Product engineering outsourcing firms have been using open source software to and building/integrating them in to products and applications. One of the key factors to be aware of is the licensing issues associated with integrating open source code into products you deliver to clients. Read the licensing agreement for any open source code you decide to use and make sure your client is ok with the licensing agreement.
  
  
• Companies that makes commercial open source software are very sensitive to the licensing and copyright surrounding open source code they make available and therefore reluctant to outsource.
  

What say?

Microsoft and Opensource

I was at the Microsoft Open Source ISV Forum held at SF today. Curious to see what Microsoft had to say to open source ISVs to say the least.

As a Microsoft NXT Delivery Partner and Microsoft Gold Certified Partner, we (my employer & I) have had an ongoing relationship with Microsoft. However, as an engineering services provider we were witness to a dramatic shift in platform choice from ISVs and SaaS providers to open source in last couple of years. So this event piqued my curiosity as to how Microsoft is dealing with the now prevalent open source community.

Interestingly, this event came on the heals of an article on Forbes about Microsoft's announcement of Linux patent violations which generated immediate flak in the open source community for their approach.

So when Sam Ramji, Microsoft's Director of Platform Technology Strategy, took the stage he had a lot of explaining to do. On one hand he was advocating OS ISVs to adopt Microsoft platform while on the other hand there were his bosses making patent violation threats to the OS community! I must say even though it was a rough session for Ramji he did manage to survive it without losing face.

The gist of his argument that I took away is as follows:

• Microsoft is not in favor of litigation - they have been at the receiving end of numerous patent law suits and paid billions, but they have only had two offensive cases where they initiated patent litigation.
• Platform is what is key for Microsoft. And they welcome open source ISVs and developers to adopt Microsoft platform so that Microsoft doesnt lose out as OS gains even more adoption. Towards this Microsoft is willing to invest in helping the OS ISVs develop on Microsoft platform.
• The benefit OS ISVs and developers gain by adopting Microsoft as a platform is the volume of users who want applications on Windows.

There were some interesting comments on how the OS ISV's reputation will be tarnished by partnering with Microsoft.

I found Redmonk Stephen O'Grady's presentation most impressive of the day's. His rationale for OS ISVs was that the choice of Microsoft as a platform is simple - as an OS ISV with thin margins volume is what is most crucial for your business. And at present and for the foreseeable future Microsoft platform is what gets you volume business.

John Roberts CEO of SugarCRM the superstar of commercial open source software presented his experience in partnering with Microsoft (interestingly SugarCRM site is down as I write this). So did Marc Lind from Aras an exclusively Microsoft based Open Source Enterprise PLM software vendor.

The commercial OS SugarCRM story is by now commonplace with many having adopted the same model. However, Aras's story was intersting how they went from a commercial Microsoft client server vendor to an open source enterprise PLM solution provider. My take is that the payoff for Aras is from the tremendous interest in the marketplace for opensource. And by going exclusive on Windows, they have gained a lot of PR from Microsoft.

As John Roberts put it, the key is not whether it is open source or commercial, it all comes down to the best product. And his assessment is that the opensource model has helped him create a superior product.