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The use of open source environments for enterprise software projects is growing at an unprecedented rate, with notable peaks of interest among financial services and public sector organizations. Indeed, the adoption of open source software is growing at a great clip, with worldwide revenue from standalone open source software having reached $1.8 billion in 2006, according to recent calculations from IDC. That figure is expected to reach $5.8 billion by 2011, representing a compound annual growth rate of 26 percent. As a result, IDC is calling open source “the most significant, all-encompassing, and long-term trend that the software industry has seen since the early 1980s.”

In the past, open source projects were largely focused on horizontal software platforms within an organization’s infrastructure stack. Such projects have been so successful that open source is now being extended up the technology stack and into mainstream adoption to encompass business applications, leveraging the open source LAMP (Linux, Apache, MySQL, Python/PHP/Perl) stack. Today, there are open source projects underway for just about every major infrastructure software technology imaginable, from content management systems to defining a Business Process Execution Language (BPEL).

Synonymous with these trends, the Business Intelligence (BI) software market has seen the launch of several new open source projects related to reporting and data warehousing.

In May 2007, Actuate commissioned a survey of 602 senior personnel from financial services, telecommunications, and public sector organizations across North America, the United Kingdom, and Germany to explore attitudes about open source—particularly in the area of business intelligence. The study shows open source is fast becoming the preferred technology for information applications and business intelligence. In fact, one third of companies surveyed are already using open source software. A further six percent are currently in the process of adopting it, with an additional five percent having plans to adopt. Finally, one in 10 companies is currently evaluating the technology, but has not yet decided whether to adopt. The majority of organizations surveyed cite open source software as either the preferred option or an option that is explicitly considered in the software procurement process. This is a huge shift from just a few years ago.

Figure 1: Usage of open source software

As open source continues to pass enterprise acceptance milestones, organizations in increasing numbers of industries are beginning to leverage its flexibility and value to augment—and in some cases replace—existing commercial systems. The ubiquity of the Internet and the high profile of key open source projects have done wonders to expand its scope. The main areas for which open source software is being used by these organizations are the development of several operating systems, databases, middleware, enterprise applications, personal productivity applications, and business intelligence and reporting tools. In fact, open source as a driver for lowering the cost of expensive business intelligence implementations is starting to catch on. By far, the main perceived benefit of open source software is that there are no license costs. Companies are now asking how they can get bigger deployments at the lowest cost of ownership in a relatively risk free way.

Open source provides an alternative to traditional reporting in both smaller scale business intelligence applications as well as larger, enterprise-wide deployments. A study conducted by Fraunhofer Institute for Industrial Engineering on behalf of Novell and IBM expects cost savings due to the use of open source to be higher than 50 percent. The report, “Structural Change or a Flash in the Pan,” predicts a further rise in open source software use to be led by the cash-strapped public sector, which today is adopting open source at a rapid rate.

Other advantages of open source include flexibility, not being locked into Microsoft platforms, and access to source code, as well as applications being built on open platforms, the use of standards based technology, and scalability. Along these lines, the support from the application development community is overwhelming; open source gives application developers the opportunity to quickly play with a greater breadth of options, which injects more innovation into the process.

In addition to the benefits mentioned above, the recent consolidation in the business intelligence market has fuelled concerns for customers about their business intelligence and reporting application roadmap; this leads them to seek a platform-independent future. Open source business intelligence offers a suitable information application alternative, which is vendor, platform, and ERP system independent.

Once selected, open source technologies tend to become the preferred option for new projects. Almost half of the survey’s respondents say that open source software is either the preferred option for software projects now, or that it is explicitly considered as an option when procuring software. Among those considering open source, approximately half employ it about equally for both new applications and to replace existing systems/infrastructure.

The survey results reveal the use of open source technology for enterprise software projects is becoming firmly established in North America, and growing fast in the United Kingdom and Germany. To view the complete survey results, visit

About the Author

Nobby Akiha brings over 25 years of experience in high technology and consumer packaged goods marketing to Actuate Corporation. Prior to joining Actuate, he was Vice President, Marketing and Business Development at Inference Corporation. Mr. Akiha also served as Senior Consultant at Regis McKenna, Inc., Director of Marketing Communications for CASE vendor Interactive Development Environments (IDE), and Group Product Manager at Oracle Corporation. He holds a Bachelor of Science in Commerce from the University of British Columbia and an M. Science in Management from the Sloan School of Management at M.I.T.

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