SAN FRANCISCO--A bad economy is good for open source, declared Red Hat CEO Jim Whitehurst in his keynote at Open Source Business Conference 2009, but open source's value proposition should play well in any economy.
At OSBC 2008, Whitehurst suggested that enterprise IT needs to join the open-source conversation, contributing code back to derive greater benefit than mere consumption of open source can offer.
This year, Whitehurst moved beyond this meme to focus on why enterprises should buy open source in the first place, never mind contribute open-source code.
Whitehurst pilloried the traditional proprietary sales model, a theme the Red Hat team has raised before, which basically forces customers to re-buy the same software over and over again through pricey maintenance contracts. Open-source models like Red Hat's differ in that they depend on continuous delivery of value to the customer: if the customer doesn't like what Red Hat provides through its subscription service, they cut the subscription.
For this reason, Whitehurst noted, "Red Hat's biggest competition is not Microsoft or Novell. Our biggest competition is customers not renewing and continuing to use our software without a subscription."
Bad economic times prod people to change. Fortunately for the open-source world, that change favors its adoption and proliferation as enterprise IT seeks to cut costs while ensuring superior performance and equivalent or better functionality. Red Hat, for its part, "is hearing from CIOs that before wouldn't return our calls, but now are asking 'to sit down and work something out with Red Hat'."
Open source, said Whitehurst, conditions customers to expect more for less, and disciplines vendors to deliver it. Open source does not provide an easy business model, but it does enable various business models that align customers' interests with vendors', which proves to be a winning combination in a recession.
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