In various markets, open source has relentlessly driven prices down while boosting performance and customer value, as detailed by The 451 Group. Even as traditional vendors have struggled with a tight economy, open-source vendors have thrived.
In the process, has open source conditioned customers to expect more for less? Perhaps as little as $0.00?
The Linux market offers some clues.
Red Hat continues to deliver exceptional quarterly earnings, and Novell's Linux business has also been growing strongly, suggesting "free" (as in freedom) doesn't necessarily mean "free" (as in bankruptcy).
And yet, an ever-greater share of the Linux market falls into the "nonpaid" category, growing by 1 percent each year, according to IDC.
While that may not seem like much, it (along with the ~50 percent nonpaid Linux data) suggests that enterprises are increasingly comfortable with Linux, and are willing to run it unsupported by any vendor.
While there's still plenty of room for Red Hat and other commercial Linux vendors to grow, especially as the overall Linux market's growth outpaces the 1 percent decline in paid adoption, this trend toward self-support (which trend is also evident in other mature open-source markets) could imply that charging for open-source bits (and packaging it as a subscription) may not be the ideal model in the long term.
The better the software, the less need for support. To get paid, vendors are going to highlight value well beyond software, and dressing up software as a subscription may not be enough.
So far, they've shown a clear propensity to pay for applications delivered as a service, like Salesforce, as well as management tools to make infrastructure (like Linux, MySQL, etc.) run more efficiently, as VMware and others provide.
But will they still pay for infrastructure? It's just not clear.
MySQL went through this before. The company eventually topped $100 million in revenue, but some of its key people are now calling its fundamental business model into question or, at least, its applicability to other open-source businesses.
Granted, the concerns aren't being raised by MySQL's business team, but it seems intuitive that it would be tough selling bits in a world that is rapidly moving to services, with Gartner speculating that "Everything that you have on data center now should be in the cloud in due time."
While we trend toward the cloud, expect open source to increasingly pressure all areas of software...including open-source businesses, particularly those trying to make a buck peddling infrastructure bits.
So, will open source drive prices to $0.00? Yes, for some workloads and in some scenarios, like infrastructure that will be expected to be free. But expect the smart open-source companies to make plenty of money in this service-enabled, cloud-hungry world.