Tightening purse strings will turn many businesses on to Open Source Software

The software bubble occurs when software suppliers that continually introduce new versions find customers choose not to upgrade. Most suppliers are in a similar situation. Microsoft has found that many Windows users are happy to stick with earlier versions of Windows such as XP instead of moving to Vista.

With money tight, I think we may see a major rethinking of how we buy software. The cost of buying and upgrading may well be seen as unnecessary. Today there are alternatives to buying software from major suppliers. Alternatives to print and publishing applications, such as Adobe Creative Suite and QuarkXPress, are available through Open Source Software (OSS). In the office area Open Office offers an alternative to Microsoft Office, with applications including writing and desktop publishing as well as presentations, graphics and spreadsheets. For publishers, in the page layout field, Xclamation, Passeportout and Scribus are alternatives to Adobe InDesign and QuarkXPress.

Stop updating
The question is, what will happen when budgets get cut and publishers think about making savings? The first thing they do is to stop updating their systems. For those of us who have been in computing since the days when IBM was the only solution and Bill Gates was still in infant school, the ethos was ‘if it ain’t broke, don’t fix it’. If your system works, why change to get new facilities you haven’t asked for?

Companies are pondering how to go about upgrading. If you are thinking of a new system should you pay for a software licence for a leading system supplier, or do you pay nothing and use OSS?

At this time, OSS lacks the Graphical User Interface (GUI) of the leading suppliers’ software, and it may be equivalent to the main suppliers’ earlier products. However, all such systems require integration and linking with other software. Additionally there are many suppliers that integrate products like Adobe Creative Suite or QuarkXPress into total systems. It will only be a short time before OSS receives the same treatment.

This would cause major problems for companies such as Adobe and Microsoft who rely much more on upgrade sales than the development of new systems.

So has the software bubble burst? Do you have a future if your software business is built around ongoing upgrading rather than the development of new business applications? Is OSS going to be a major area in future for organisations to develop new business operations around when the credit crunch starts to bite even harder? Today there is a wide availability of expert low-cost programmers who have skills to customise OSS and build it into an integrated network.

I am not saying OSS will replace major applications for enterprises such as SAP and Oracle. But when it comes to adding new word processing, spreadsheet, graphics or page layout applications the attraction of no-cost OSS is clear. How many users use more than 10% of the functionality of their software and would they find a no-cost or low-cost alternative satisfies their needs? 

Major organisations are looking at cost savings in the IT area. An early user of OSS was investment company E*Trade and by the end of 2002 they were saving $13m (£9.3m) a year through use of such software.

Of course I am not taking account of the likely future technology changes as we move more to an internet computing environment largely funded by advertising. Cloud computing will make use of much OSS, and the Google approach to computing will largely be funded by targeted advertising. The challenge to the major software companies is finding how their business will operate when major software users stop regular systems upgrades and look to alternative ways of doing business. Unless companies like Adobe and Microsoft start to bring totally new applications to market it is likely that the software bubble will burst.

Andrew Tribute is a journalist and consultant in digital and pre-media technology. Visit www.attributes.co.uk