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Banking On Open-Source ASPs
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March 19, 2001 (Computerworld) -- A year ago, Gerhard Pohl fretted a great deal about taking The World Bank Group to an open-source computing model. Back then, he spent a lot of time trying to convince his superiors that not only was open source the right choice, but that it would also make good business sense to use an application service provider (ASP) to manage and support these applications for the Washington-based organization.
"It was a very new idea then. It took a lot of talking," says Pohl, the World Bank's head of business development for the Development Gateway, an investment services resource portal for developing nations.
Like other organizations considering open-source technology, most of the World Bank's debate was based on the business benefits. Pohl and others say the bottom-line rationale for using open-source applications is compelling for almost every organization.
The true value, they say, isn't just in the dollar savings, which are real, but also in the resilience it gives to IT projects in an otherwise volatile software market, because users control the source code if a vendor goes out of business or changes product strategies.
The World Bank's software management strategy crystalized last year in favor of open-source provider ArsDigita Corp., a $26 million software house in Cambridge, Mass. The global lending organization had been burned recently when America Online Inc. in Dulles, Va., purchased one of the bank's Internet software suppliers and changed the direction of the product it had been using. That experience helped turn the debate in favor of open source.
"Small and large Web vendors are at high risk of going out of business or getting bought these days," Pohl says. "But if we own the code, it's less of a threat."
Strength in Numbers
Carl Howe, an analyst at Forrester Research Inc. in Cambridge, Mass., says that to protect themselves with proprietary software vendors, users often are forced to "go through a weird negotiation process to put software code in escrow just in case [the vendor] goes out of business."
But, Howe says, the top reason most companies adopt open source is that it speeds time to market. A popular open-source product can have hundreds, even thousands, of developers worldwide adding features from which a large swath of users can benefit.
For example, Santa Cruz, Calif.-based Lutris Technologies Inc.'s Web application server, Enhydra, is the first open-source product to crack Forrester's Top 10 list of business software for the Web. The company's community at www.enhydra.org has more than 3,000 members.
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