Sixth Annual Future Of Open Source Survey Results Point to Era of “Open Innovation on Demand”

Open Source Fueling Innovation in Mobile and Cloud; Quality a Top Reason for Enterprise Adoption

Open Source Business Conference (OSBC), SAN FRANCISCO – May 21, 2012 North Bridge Venture Partners and Black Duck Software today announced the results of the sixth annual Future of Open Source Survey. Conducted in partnership with The 451 Group, the 2012 survey reveals that open source software (OSS) is leading innovation in major technology segments including mobile, cloud and big data, as well as creating innovative business models such as Open SaaS. The quality of open source, and the ability to continuously improve, is now one of the top reasons for its adoption.

"The 2012 Future of Open Source Survey reveals the OSS market is thriving. This year's results show an important shift in respondents' view of OSS, focusing less on cost and more on how OSS can innovate and help create industries. Taken together with applications like mobile and enabled by cloud, we are entering an exciting new era of 'Open Innovation on Demand,' where not only can OSS innovate faster, it can be deployed immediately and consumed as a service from the cloud," said Michael Skok, General Partner, North Bridge Venture Partners.

More than 700 respondents – the largest number in the survey's history – took part in the 2012 survey, including representatives from both vendor and non-vendor communities. The survey, supported by over 25 collaborators, polled industry influencers about open source trends, opportunities and expectations for 2012 and beyond. Respondents were asked about a wide range of issues affecting the OSS landscape, including areas of growth in OSS, key drivers of and barriers to OSS adoption, and suggestions for building and maintaining profitable OSS business models.

Key Findings:

  • Open source is leading, not following, in important areas including cloud, big data, mobile apps and enterprise mobility.
  • Quality of open source is one of the top three reasons that make it attractive for use.
  • More than 50 percent of software acquired in the next five years will be open source software.
  • Respondents predicted that the top two trends for open source by 2015 will be the adoption of OSS in non-technical segments (e.g., health care, automotive, government) followed by general enterprise adoption, reflecting maturation in the OSS segment.
  • Almost half (44 percent) of respondents identified data management as the segment most likely to be affected by OSS in 2012.
  • Nearly half (43 percent) of respondents named "project maturity" as the most important factor when choosing an open source project for integration into a product or service.
  • When asked about revenue generating strategies likely to create value for vendors, 52 percent of respondents said an annual, repeatable support and service agreement was the most likely value strategy.
  • Challenges remain – for example, top barriers to selecting OSS versus proprietary software are unfamiliarity with OSS solutions and lack of internal technical skills among developers.

"The Future of Open Source Survey results point to much stronger adoption in the enterprise, expanding well beyond industries with deep OSS expertise," said Tim Yeaton, President and CEO, Black Duck Software. "Automotive, mobile, financial services and IT services are rapidly adopting OSS, with nearly all incorporating cloud and mobile solutions. As we've come to expect, awareness of the competitive advantages enabled by open source technologies and methods is spreading rapidly."

This year's survey results point to three important conclusions:

  1. Open source is not just fueling innovation, but leading it. Important areas of innovation include big data, mobile apps and enterprise mobility, vertical-driven open source communities in industries including automotive, financial services, aerospace and others, and new business models like Open SaaS.
  2. Broad-Scale Enterprise Adoption. Results indicated that OSS use will be an even larger percentage of software acquisitions and purchases, that adoption by non-technical segments and broader adoption is gaining traction, particularly as OSS projects mature (the most popular factor in choosing specific open source projects), and that OSS quality, which was once used as an excuse for non-adoption, is now one of the top three reasons for adopting the code.
  3. Open Source Remains a Good Investment and Smart Business Tool. Data indicates that 2011 was a record year for OSS investment, which increased by 49 percent to $675M, and new software companies are increasingly based on OSS and adaptive business models.

The survey also points to challenges associated with OSS use, including finding personnel resources with the right knowledge and technical skills, and the complexity associated with OSS use – from choosing the right project from the over 600,000 available to managing the acquisition, integration, maintenance and support needs off OSS, along with learning to engage with the greater open source community and shifting both the style and culture of some development organizations.

The survey results were released today during the opening panel at Computerworld's OSBC conference. The panel featured open source industry leaders Tim Yeaton, President & CEO, Black Duck Software; Tom Erickson, CEO, Acquia; Ryan Garner, VP, Direct-to-Consumer Services, Warner Music Group; and Gil Yehuda, Director of Open Source and Open Standards, Yahoo! Inc. The panel was chaired by Michael Skok, General Partner, North Bridge Venture Partners.

"Our experiences with Open Saas, Software-as-a-Service solutions built using open source technologies, has been game changing for how we create and manage our artist web properties," said Ryan Garner, Vice President, Direct-to-Consumer Services, Warner Music Group. "As a company whose core competency is not engineering, we've often relied on proprietary SaaS products, but by introducing the power of open source into our SaaS relationships we have accelerated our ability to innovate, reduced costs and removed the risk of vendor lock-in. We believe we are helping to create a disruptive model that will be a no brainer for companies like ours."

About North Bridge Venture Partners
North Bridge Venture Partners is an active, bi-coastal, early-stage venture capital firm based in Boston, Massachusetts and San Mateo, California. Established in 1994, North Bridge provides seed-to-growth financing and company-building expertise. Together with North Bridge Growth Equity, our mid-market focused growth capital fund, North Bridge manages over $3 billion. For North Bridge Venture Partners, success is derived through a partnership with entrepreneurs that produce industry-leading companies in large emerging markets. Historically, the firm's partners have played a significant role in organizing, starting and building successful companies. Working in concert with entrepreneurs, North Bridge adds value by providing strategic guidance, sharing operating experience, industry specific knowledge, team-building skills and an in-depth understanding of both private and public financings. North Bridge's sector focus includes Software, Communications & Infrastructure, Healthcare Technology, Digital Media, and Materials. For more information about North Bridge, go to www.nbvp.com or @North_bridge.

About Black Duck Software
Black Duck Software is the leading provider of strategy, products and services for automating the management, governance and secure use of open source software, at enterprise scale, in a multi-source development process. Black Duck enables companies to shorten time-to-solution and reduce development costs while mitigating the management, compliance and security challenges associated with open source software. Black Duck Software powers Koders.com, the industry's leading code search engine for open source, and Ohloh.net, the largest free public directory of open source software and a vibrant web community of free and open source software developers and users. Black Duck is among the 500 largest software companies in the world, according to Softwaremag.com. For more information, visit @black_duck_sw.

2012 Future of Open Source Survey Collaborators:

- Acquia
- Akiban Technologies
- Automattic
- BitNami
- Black Duck Software
- Collabnet
- credativ
- Couchbase
- EnterpriseDB
- Eucalyptus
 
- Infobright
- Jaspersoft
- MassTLC
- Microsoft
- North Bridge Venture Partners
- Olliance Group, a Black Duck company
- OpenLogic
- Oracle
- Pentaho
- Red Hat
- Revolution Analytics
- rPath
- Sand Hill Group
- SugarCRM
- Suse
- The 451 Group

PR Contacts
North Bridge Venture Partners:

Lois Paul & Partners
Kristi Cabot
617-986-5700
NorthBridge@lpp.com

Black Duck Software:
Sarah Gerrol
781-891-5100
sgerrol@blackducksoftware.com

Emanate PR
Ann Dalrymple
781-404-2432
Ann.dalrymple@emanatepr.com

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