Report: Subscriptions to surge for open-source licensing

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Mar. 28, 2008

Open source has it all over traditional software when it comes to cost, flexibility and freedom from vendor lock-in. According to a new study from North Bridge Venture Partners on the future of open source, released on March 25 in conjunction with the Open Source Business Conference, those were the top three factors that make open source attractive.

The annual survey--which included input from OSBC attendees and customers from Ingres, Sun Microsystems, SugarCRM, Ubuntu and Acquia--aims to examine the future direction and current position of open source in the marketplace.

According to the survey, a little over half of respondents--51 percent--consider open source not only a viable business model, but a development model and a marketing model. What's more, the survey showed that within five years, about half of the companies would be buying 50 percent or more of their software in open-source configurations.

The subscription model also will overtake the perpetual licensing model, according to 72 percent of respondents. Subscription licensing has actually leapt in popularity year over year. In the 2007 survey, a 40 percent majority of respondents said that within five years, the ratio of open-source subscription licenses to perpetual licenses was on track to be 66:33. This year, the majority of respondents said that subscription licensing is going to overshadow perpetual licenses on an order of 80:20 in the coming five years.

Jeff Whatcott, vice president of marketing at Acquia, said that the data points to a shift in where customers think they can get value out of open-source software. "The subscription element includes things that open-source companies can charge for that are beyond the bits that are installed on customer machines," he said.

To continue reading this article by Karen D. Schwartz at eWEEK Midmarket, go here.

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