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Study: Open-Source Making Significant Traction in the Enterprise

June 24th, 2010

Open-source software is at an inflection point in the enterprise. According to a survey by Accenture, more than two-thirds of organizations anticipate increasing their investment in it this year, and almost 40% said that they expect to migrate mission-critical software to open source within the next 12 months.

The survey reflects a pattern that's best illustrated by Red Hat's most recent financial results. In the past year, its revenues were up 20%. All parts of its business are showing growth, with particular strength in middleware. The company signed the largest deal in its history during the last quarter. According to Datamation, Red Hat renewed all of its top 25 deals during the quarter at over 120% of their original value.

Accenture surveyed 300 blue-chip organizations in both the public and private sector and found that half of the respondents are fully committed to open source. That validates Red Hat own findings that that 88% of all companies that use open source will increase their investments in 2010.

Some of the other findings in the survey:

  • In both the United States and the United Kingdom, respondents cited quality and improved reliability as the key benefits to open source programs. A total of 70% cited improved reliability, and 69% said they are finding better security and bug fixing.

  • Cost is a huge driver. Of the respondents, 71% said they believed they could save in software maintenance costs. They also cited savings in total cost of ownership and development costs.

  • Companies still don't want to share their own open source projects; less than a third say they do. This may be one of the biggest concerns if open source goes in-house and isn't shared with the community. It's this sharing that gives open source its strength.

  • The public sector is lagging in the adoption of open source.

  • Senior management, training and insufficient open-source alternatives hinder further adoption. The biggest challenge is training. Half of the respondents from the public sector said training is a hindrance, compared with only 22% in financial services. Further, lack of senior management support appears to be a key reason given for not using open-source software. Those yet to make the transition also cite insufficient open-source alternatives compared to proprietary software suites.

    • Open source is on a trajectory to become dominant over the next 10 years. That's great news for companies like Red Hat, which are already seeing the upside in revenues that comes with open-source adoption.

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