IDC: Open Source Rising, Set to Go On a Tear

by Sam Dean - Jul. 29, 2009Comments (1)

As has been true for quite some time now, economic malaise and the maturity of applications and platforms are continuing to boost the market for open source software. Those trends are also helping to build a healthy ecosystem for commercial open source companies, and enterprise adoption of open source. Today, market researchers at IDC are reporting on a new study that predicts that worldwide revenue from open source software will grow at a 22.4 percent compound annual growth rate to reach $8.1 billion by 2013. Here are some of the other key findings.

The new revenue growth prediction from IDC is higher than previous ones for several reasons, including tracking more projects in the forecast, and increased acceptance of open source software during gloomy economic times.

"The open source software market has seen a strong boost from the current economic crisis," said Michael Fauscette, group vice president, Software Business Solutions at IDC. "OSS is increasingly a part of the enterprise software strategy of leading businesses and is seeing mainstream adoption at a strong pace. As the overall software industry continues to consolidate, it will be key for OSS vendors to reach scale if they plan to continue as a standalone business."

That last point is a good one, and "scale" is also essential if commercial open source companies are to avoid being swallowed up, or in some cases possibly bought and shut down, by big proprietary software players. At the end of last year, I predicted that open source M&A would be on the rise this year, and we've already witnessed Oracle's intent to acquire Sun Microsystems and several other deals.

The IDC study also notes that "large software vendors like IBM, Sun, Dell, HP, and Oracle are making significant amounts of indirect revenue from their activities with and support of OSS." And IDC researchers point out that hybrid business models are on the rise: "It is likely that this will end up as the most prevalent business model, with on-premise vendors adding SaaS, SaaS vendors offering on premise, OSS vendors selling variants, and closed source vendors offering more OSS."

The ongoing strength of the commercial open source software market should silence many of the critics who characterize open source as "a race to zero," driving economic incentives out of the overall commercial software market. Open source is going increasingly coexist and work in tandem with proprietary software. Additionally, open source skills will increasingly be key differentiators and advantages for college graduates and other tech job seekers.
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