The foundation of today’s network economy
By Anil Valluri, SUN Microsystems
 The world’s population is estimated at over 6.76 billion, and approximately 1.5 billion people are connected to the Internet, with millions joining each week. Consequently, for many companies, the network is becoming a core resource for engaging customers and creating a competitive advantage. This adaptation of technology is also having a huge impact on the role of IT and the value that IT brings to running a business. With these changes, the leadership challenge for the next decade will be the evolution of the CEO, CIO, and CTO roles and the awareness of the dynamics between them.
History is full of examples in which open standards prevailed because they grew markets, while proprietary systems failed because they did not. With the growth of the Internet, openness has become obligatory and interconnectivity essential. Open source technology has become the foundation of today’s network economy, as organizations of every ilk use standards-based open technology to develop applications for everything from basic business databases to mission-critical transaction and support systems.
Choice And Flexibility
From the CXO’s perspective, open source offers three tremendous advantages:
- It gives businesses the greatest choice.
- It lowers barriers to entry to low cost or no cost.
- It provides the most flexible, cost-efficient exit strategy (i.e., a low barrier to exit).
With open source software and advancements in virtualized architectures, organizations gain the freedom to choose what applications and infrastructure software they want to evaluate (at no cost), which of these solutions they want to deploy, and how they want to pay—on-site licenses, hosted solutions, or software as a service (SaaS).
Open source software is innovative and comes without the risk of vendor lock-ins. Developers can try out several products before settling on the best-suited one, all without any front-end costs; and they can usually change products later on if they become dissatisfied. Even where commercial suppliers act as intermediaries, or other support options are available, the costs of a finished open source solution are typically lower than a proprietary one.
Other advantages of open source for enterprise IT groups stem from its development in a community effort that fosters interoperability, embraces the most innovative technology, and allows code to be modified at will, all at a lower cost than proprietary systems.
Adoption In India
India is growing as an economy and as an IT superpower. Enterprises in India are slowly but steadily adopting open source, and so is the government. Open source software has been deployed by both the national and state governments in India. State governments in Kerala, Tamil Nadu, Karnataka, Madhya Pradesh, West Bengal, Delhi and Maharashtra have taken the lead in this regard.
Open source in India offers a great solution to bridge the digital divide. With open source software adoption rising rapidly, particularly in China and India, Gartner believes that by 2010 it will account for 20 percent of the global software market, displacing over $100 billion in revenues from traditional software vendors.
If the global digital economy has one great strength, it is its capacity for continuously replacing old, outdated ideas and technologies with newer, more innovative ones. We've seen the power of openness and innovation in mobile technologies, which is improving the quality of life and economic status of millions in emerging markets. We are now at a similar crossroads when it comes to information technology and our future as an industry will be one defined by the fundamental power of openness, whether that's open source software or in IT systems built upon open standards.
Good Economic Sense
The shift to open source applications and commodity infrastructures is as inevitable as the rising of the tide. Why? It simply makes good economic sense. Never before have so many been able to access so much computing power as easily and as instantaneously. Research firm IDC predicts that worldwide revenue for open source software will touch $5.8 billion in 2011, growing three times faster than the total software market, though open source constitutes a mere one percent of worldwide software sales. The network has changed the way people develop software, how they acquire it, and what they do with it to create value. Open source is fueling a Participation Age that lets innovators, such as developers, stand on the shoulders of technology giants to fuel their own success.
The challenge for CXOs is to identify the opportunities, see them for what they are worth in the eyes of their customers and the market as a whole, and adapt their business models to those conditions.
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