Build Vs. Buy Vs. 'Download'
Thanks to the recent financial crisis and associated downturn, many in the financial services are scratching their heads real hard to evaluate best strategies to navigate the rough weather and come up with cost cutting strategies. Evaluating Open source technologies is seeming to be not so bad an option anymore while wading through the downturn challenges.
Looks like Open source firms have been doing quite well in the recent quarters. Business review online confirms the details about the thinking quoting Open source platform and services firm OpenLogic ant their claims show that “OpenLogic has seen revenue from financial services sector in first half of 2008 almost triple the same period in 2007; companies proactively search for open source support – the company has seen inbound support leads go up by more than an order of magnitude in the past year; and in Q3, leads from financial services companies looking for help with open source have already tripled over the previous quarter.”
The Open Source Census, a global, collaborative project to collect and share quantitative data on the use of open source software in enterprise showcases interesting statistics in their report . Some of these details are summarized in the press release of Open Source which states that financial services show the highest use of open source per machine scanned with about financial services companies having about 117 different open source packages installed per machine.
While these data points are interesting to show companies are taking open source seriously, open source is still not being pursued as a key alternative in build vs. buy decisions for business critical applications. Many enterprises would be surprised at the breadth and depth of open source technologies that are now available, often considerably cheaper than commercial software. Today’s environment is forcing the organizations to look at ‘Download’ as third option for a build vs. buy decision.
More than the obvious reasons like financial reasons, it is a fact that the open source technologies have matured really well in various technologies from Application Development Tools, Data Integration and Data management to Hypervisors, content management, communication and collaboration to even domain specific technologies like Quickfix (Implementation of FIX), Quantlib (library for modeling, trading, and risk management ) and Marketcetera's open source Automated Trading Platform.
Gartner seems to agree with this point stating "Many open-source technologies are mature, stable and well supported," they noted in a list of their IT predictions. "They provide significant opportunities for vendors and users to lower their total cost of ownership and increase returns on investment. Ignoring this will put companies at a serious competitive disadvantage." Gartner felt that “By 2012, 80 per cent of all commercial software will include elements of open-source technology”.
"The Best things in life are Free" croons Sam cooke in his 1964 Album.
Free and Open Source is surely one of the better things we will need to refocus on...
Folks, While I am convinced that open source software have come a long way and need serious consideration, if not anything they provides us with the negotiating edge with our closed software vendors.
I would like share some more of my thoughts on this thread soon.. meanwhile..
Happy ‘Downloading’!!
Comments
1) We should “Buy” the business/domain based solutions that are changing continuously per government/industry regulations. Like an insurance package or back-office of banking solutions. The reasons for that are we can expect the stable vendor of the package to give releases as and when regulations change. While building from scratch is not advisable and open-source may not provide reliable business-triggered changes.
2) We should “Download” the technical tool set to integrate the business package we bought including reporting, content mgmt, archival, service bus and process modeling.
3) Finally we should “Build” the code to integrate “Downloaded” tools to “Bought” package.
An interesting option for us is to pre-build the 2) and 3) for every domain and have adapters ready for the package. It is based on the thought that at the end of the day, apart from the business process that a particular retail bank / industry vertical has all the components needed for that is 80-90% same.
Posted by: Jayakrishnan Ramdas | November 7, 2008 10:40 AM