Gartner: The Good, Bad, and the Ugly of Open Source

In her blog today, Paula Rooney previewed an upcoming Gartner report on The State of Open Source 2008.

Among a multitude of predictions, I found the following the most interesting:

“By 2012, software-as-a-service (SaaS) will eclipse open source as the preferred IT cost-cutting method. To an enterprise, embracing SaaS amounts to embracing services in place of software. Both open source and SaaS are priced by subscription and operate on low profit margins. Both are an answer to reducing enterprise costs of IT, but the SaaS proposition additionally reduces the requirements for IT technical skills, while open source tends to increase this requirement.”

This prediction speaks to contradictions. While it’s accurate to say that open source increases the need for in-house technical expertise, the prediction overlooks one key point: SaaS solutions, particularly in the context of the enterprise, have faced scalability and integration issues from the gecko…issues that typically drive the cost of such implementations into the millions, and require many to turn to vendors and consultants alike for assistance.

And it’s been enterprises, probably more than SMBs, that have truly leveraged open source thanks largely to the in-house expertise their IT departments already have on hand.

Rather than replacing, I see open source and SaaS coming along hand-and-hand by 2013, which Gartner foresees as well:

“By 2011, open source will dominate software infrastructure for cloud-based providers. Only by radically reducing their infrastructure costs can cloud-based providers offer the pricing models necessary to disrupt the incumbent packaged software.”

Certainly open standards and open-based SaaS solutions will assist the later with the aforementioned integration and scalability issues, but only time will tell how the battle between SaaS and open source…if there even is one…will play out. That said, I often shun at such bold predictions such as the first one. If history is any indicator, neither open source or SaaS will be disappearing anytime soon.