As highlighted by a post from Matt Asay on a session at OSBC 2007 the most interesting developments to watch along the fast moving open source track, happens to be that of the intersection with the proprietary software world. This collision is set to result, not in the elimination of one of the two, but in a process of hybridization. The software industry's rapidly changing competitive landscape will require that open source and proprietary vendors adapt to the respective strengths and weaknesses of the other in order to survive. Consequently, the present chasm between the approaches on both sides of the equation will come to resemble more of a thin red line, characterized by the advent of more traditional methods on the open source end and more open-focused plays by proprietary camps.
Earlier this year, Gartner DataQuest reported that the compound annual growth rate (CAGR) of open source software (43%) between 2006 and 2011 will more than quintuple that of proprietary software (8%). The firm also projected open source software sales to reach $4.23 billion in 2007, and triple that figure by hitting $13.10 billion in 2010. One reality to keep in mind is that these numbers portray different phases of the growth curve for the open source and proprietary driven business models, so a divergence in CAGR should be expected. Yet, all assessment of the absolute validity of these projections aside, they do, in fact, point to the well-documented trend of substantial growth by open source companies. Since it isn't a question of whether open source is actually sustaining growth or not, it becomes one of how this growth is going to affect the business of software.
The continued maturation of open source as a bona-fide disruptive force will continue to draw its clash with proprietary software to closer and closer confines. One marked by increasing competition for the same accounts, customers and new business. Currently, open source is progressing towards that point by eating away at proprietary market share from the bottom-up. And as OSBC 2007 is demonstrating, open source is also applying pressure by becoming a player in decisions made at the C-level executive suite (top-down). However, there are still vast pockets of proprietary strongholds which have yet to experience the effects of open source disruption.
In order for this to occur open source will have continually incorporate features of the proprietary approach. What does that mean? It certainly doesn't imply an abandonment of the core principles of open source, rather a continued transformation into a viable option for customers who are remotely aware of the open source value proposition, at best. How this is to be accomplished is a separate topic in and of itself, but it suffices to say that it will be an extended effort and one which will take form according to situational differences. The point at which this process begins in earnest, will be concomitant with more proprietary vendors realizing that they won't can no longer maintain current margins, let alone grow, without duplicating some of the features the open source value proposition. At a macro level, this stage will be yet another in the full-fledged evolution that is shaping the 21st century IT industry as a whole.
Currently, both the open source and proprietary vendors who are actively responding to the competitive threat and opportunity presented by this collision can be categorized as frontrunners. In the absence of a large scale movement by the majority on either side, it will be some time before the aforementioned hybridization can overcome its formative inertia. Regardless, when activity commences in full, it has the potential to alter the complexion of the entire business of software.