Monday, January 07, 2008

Open Source Marching up the Vertical Stack

Open Source is on the march up the stack - first operating systems, then integration software, and most recently commercial open source packages (CRM, ERP, BI, Content Management, etc.). Now applications? - where will it stop!?

My focus in working for the Collaborative Software Initiative (CSI) is on building commercial open source applications for industry verticals and government. I build on the shoulders of giants: Linux, Postgres, Java, Ruby, JRuby, and commercial open source packages.

At the application level, where is open source today and where is it going in industry verticals (government will be a different post as it is totally different)?

I see three categories *today*, but I bet over the next year I will see many more.

Regulated Software Today, there is a lot of desire to collaborate on systems that are mandated by the government. There are plenty of these in every industry. Pragmatic companies realize that there is absolutely no business value in differentiating here. It makes business sense to collaborate with their competitors to come up with an open, well-supported, cost effective solution to meet the regulation.

Industry Vertical Utility Applications Every industry has at least one industry standards body. These organizations do some great stuff. They also already have legal mechanisms in place to comply with anti-trust constraints. One common activity in industry standards bodies is putting together XML schema standards. My question for years has been: XML is nice and all, but how about we just sling some code, open source it, find somebody to support it, and solve the problem once and for all? I think we will see a lot of open source in this area in the coming years. XML is needed, but is just data exchange and only gets you so far. There is a common utility class of application that will be written in support of industries. I see this occurring more and more as there are success stories with the low hanging fruit in regulated software.

Industry Boat Lifters There are fundamental technical problems in many vertical industries. The cause can be many things from aging platforms to out of date industry networks to predatory vendors that create terrible industry inefficiencies due in part to the proprietary nature of their solutions. I see companies in vertical industries banding together to gently remove these types of inefficiencies. In some cases, their existence will depend on it. In others, the classic A rising tide lifts all boats argument will apply. Well placed open source industry vertical code could change the rules of the game in some industries.

Open source is just getting started in the vertical application space. We'll all see some very interesting things happen over the next few years. I think that what I described below is only the beginning.

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