By 2010, open-source alternatives for complex enterprise software are encroaching from all directions. Customer unhappiness, combined with the commodity threat of open source, will drive big vendors to completely revamp their sales, pricing and installation models. Some will make older versions of their software available for free and sell support to make money. New software will come with integration and upgrades included and be paid for on an as-needed basis. But some big software vendors won't be able to make the switch, and they will be swallowed up by services vendors that offer clients paid support for open source as well as proprietary software. CIOs will once again be running development shops, but this time the work will be open source as often as it is proprietary.

Under this scenario, CIOs will be architecture experts who take a hands-on role in creating cheap, standards-based infrastructure from which they will build highly customized IT-enabled business processes based on open-source standards.

"We'll see a model where you don't pay for the software but the services," says Nick Gall, senior vice president and principal analyst for Meta Group. "Open source and commoditization is a bottom-up process. It will move slowly up over the next 20 years to the top of the stack. It will be a slow, painful process for vendors."

There are patterns emerging today that could make this scenario possible. Like operating systems before them, complex enterprise software--core ERP functions and CRM--are sitting still like bunnies in an open field and make easy targets for open-source duplication. Already, small, very limited versions of open-source ERP and CRM exist. Some of the companies that have adopted them have invested in custom development projects to add functionality to the packages and have agreed to freely incorporate the new code into future releases.

A market will emerge to service these applications. Small developers will get paid by the line of code, but also for servicing and supporting the stuff they've written. If their client decides to make the code available for incorporation into the open-source package for redistribution, they will be able to sell services to other companies that adopt it. Open source will become a respectable route for startups and individual developers, and proprietary add-ons that need service will attract venture capital money to build real businesses.

Could it happen? Sure. "All you need is one good set of code out there" to act as a foundation for building the complex software systems, says Jeremy Allison, developer of Samba software. Open source avoids the biggest barrier to entering the software industry: marketing and sales. Open source needs no sales and marketing budget, only a good development leader, quality software and word of mouth for adoption. The open-source enterprise software is not free, but it is cheaper, and services vendors that install and run it for customers are happy to contribute paid developers to the cause. InnovationInnovation will flower because it will be much easier to get new projects going and to sell add-ons for existing open source. To separate the promising software from the bad, good CIOs will be more in demand--and more valued--than ever. Alles zu Innovation auf CIO.de