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Friday, January 19, 2007

Open Source investment takes off

For any who doubt the rise and acceptance of Open Source, take a look at ComputerWire’s report on how much venture capital is being invested in this space. Not only did those investments more than double from last year, not only is it nearing a total of $1 billion invested since 2000, but this growth is “vastly outpacing” investments in the rest of the IT market. The market demand for open source solutions is driving proliferation of new products and the financial backing for those companies focused on developing them and bringing them to market. And, most of the VCs I know want to see a 10x return on their investment over 5 years, making the 2011 valuation look pretty sizable. The article is a highly worthwhile read.

Sunday, January 14, 2007

The SI’s role in Open Source

System Integrators (SI)’s, by definition, must be “Jacks of all trades,” and preferably master of some (though oftentimes better than master of one). But, the biggest challenge in today’s service economy is how best to bridge the gap between business and technology. Within an Open Source environment, the gap is the empty space between the business vision & strategy and the technology required to realize that strategy on an ongoing basis.

In recent discussions I’ve had with the CIO of a very large Wall Street brokerage house, their challenge is all the legacy systems and multiple databases, each serving different types of investment accounts with little to no automated data sharing. How does a major business process like “Open Account” map through all the hardware and software elements of the datacenter? How does it all tie together, and how easy is it to make a change, or even understand the implications of a potential change? These are major hindrances toward a more seamless, flexible environment in which the vision, strategy, and technology are all coordinated.

In order for an SI to move beyond being one person or company that integrates disparate systems into a datacenter environment, they need to be able to bridge the connections between the systems and business. And the only way to successfully do this is to understand the business. Good SI’s hold the advantage in this approach as they understand business top to bottom, comprising skills of part business executive, part industry consultant, part technologist, and part innovator.

Here are a few more FAQ’s as to an SI’s role in Open Source

Why are SIs in great demand?
Because companies want to focus on their core attributes … what they do best … the true differentiating value they have to offer. That means that for the rest of the stuff, they want someone else to worry about that.

But the SIs also have the role of driving the best technologies into business. Why?
Many of the best technologies are built from startups, particularly in the open source space. And these startups, with their great technological innovations, don’t have an easy entrĂ©e into the mass corporations. The SIs have this penetration capability with their skills, proven solutions, and their relationships.

Do SI’s need to remain unbiased?
They sure do. It is not good if an SI is also a maker and seller of these technologies. If an SI has a vested interest in pushing their own technologies, a company may not have the opportunity to explore more effective components (cheaper, better fit, etc.) from the “outside”.

This is an approach we take at Unisys, and believe in. The priority, of course, is to ensure our customers have the best offerings for their mission critical open source environments. As an SI with no vested interest in the solutions our customers are using, we simply will not succeed unless they do. Hence a strategic partnership is formed.

Lastly, regarding an SI’s role in Open Source, if you haven’t already seen it, Matt Asay recently published Open Sources Reflections on 2006, which you may find of interest. In his post, Matt recognized Unisys as “the biggest services gun” around open source, a bestowal for which I am most proud.