Playing to Win in the New Software Market

That's the title of an important report just issued that “represents advice tendered to the European Commission by external experts”. It's not official EU policy, then, but it represents input into the process of framing it, and it's well worth reading.

One striking – and heart-warming – feature is how significantly open source features throughout. Or, more accurately, how it is now simply taken for granted as a major part of the software market:

Models are converging as companies become increasingly active outside of their traditional parameters. So-called ‘commercial’ software providers are developing and offering open source programs and components, while companies typically considered open source are offering commercial software for sale. Further, the two are actively working together to produce software. For example, Red Hat, the best-known open source producer also ships some commercial software products that run on top of its open source platform. IBM offers integrated open source and commercial solutions and even Microsoft, typically viewed as the archetypal commercial software vendor, actually produces products along a spectrum of software models.

Some change regarding the direction of software model choices can be observed. Many companies have tended towards OSS, in particular mixed model companies moving to a fully OSS software model to leverage the full benefits of the model for their strategic growth. Established large companies tend to use OSS components for diversification and to reduce cost in areas which do not determine the differentiator for their business model. For new market entrants the choice of software model is between proprietary, mixed, or fully OSS, a decision intertwined with considerations of development and business model requirements.

The competition between software models has generally led to more choice for the users and has impacted on the way in which the proprietary model is being applied. An example is the practice by some vendors to offer customers the full source code of a solution upon discontinuation of support for a particular software product. This seeks to emulate some of the advantages of OSS for customers of companies using the proprietary model, and while the effectiveness of this particular offer depends upon the particular terms, the example demonstrates the positive impact that software model competition can provide.

Alongside the summary document [.pdf], there is also one from a working group looking specifically at open source [.pdf].

Just over six months ago, I analysed a leaked early version of this, which was fascinating for the insight it gave into the manoeuvring going on by the different factions within that group. For alongside obvious supporters of free software, like the FSFE, there was also that well-known friend of Microsoft, the Association for Competitive Technology, and one of the biggest chums of software patents in Europe, SAP.

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